Digital Transformation Plays Major Role in Boosting the Philippine Economy


Industries all over the world are embracing new technologies. Either you go digital or you become obsolete. Digital transformation is creating an impact on how businesses are performing. In a recent study conducted by Microsoft in partnership with IDC Asia Pacific, it is impressive to note that an estimated US$8 billion will add to the Philippines' gross domestic product (GDP) by 2021. The research, "Unlocking the Economic Impact of DIgital Transformation in Asia Pacific", further revealed the increase of 0.4% annual growth rate.

How is an organization digitally transformed?

"Every company is a software company. You have to start thinking and operating
like a digital company. It's no longer just about procuring one solution and deploying one.
It's not about one simple software solution. It's really you yourself thinking of your
own future as a digital company." - Satya Nadella, CEO Microsoft

  • BUILD the intelligent cloud platform
  • CREATE more personal computing
  • REINVENT productivity and business processes
Andrea Della Mattea, President - Microsoft Asia Pacific

Top 5 Benefits Obtained by Organizations Undergoing Digital Transformation in the Philippines

  • higher profit margin (2x increase)
  • greater productivity (2x increase)
  • increased revenue from new products and services (1.5x increase)
  • improved customer advocacy (1.8x increase)
  • more cost reduction (1.9x decrease)

Digital Leaders in Asia Pacific To Gain Lion's Share of Economic Opportunities

The study indicates that while 93% of organizations in the Philippines are in the midst of their digital transformation journey, only 7% in the entire region can be classified as Leaders. These are organizations that have full or progressing digital transformation strategies, with at least a third of their revenue derived from digital products and services. In addition, these companies are seeing between 20-30% improvements in benefits across various business areas from their initiatives.

Hans Voltaire Bayaborda, Managing Director - Microsoft Philippines
What sets Leaders apart from others are their ability to ride on the digital transformation wave from an organizational culture perspective.

Key Differences between Leaders and Followers in Asia Pacific

  • Leaders are more concerned about competitors and emergence of disruptive technologies. The digital economy has also given rise to new types of competitors, as well as emerging technologies such as AI that have contributed to the disruption of business models.
  • Business agility and culture of innovation are key goals. When addressing business concerns, Leaders are focused on creating a culture of agility and innovation to counter competition. Followers, on the other hand, are more focused on improving employee productivity and profitability.
  • Measuring digital transformation successes. Organizations across Asia Pacific are starting to adopt new key performance indicators (KPI) to better measure their digital transformation initiatives, such as effectiveness of processes, data as capital, and customer advocacy in the form of Net Promoter Score (NPS). As organizations realize the protential of data as the new oil for the digital economy, Leaders are much more focused on leveraging data to grow revenue and productivity, and to transform business models.
  • Leaders are more aware of challenges in their digital transformation journeys. In addition to skills and cyber security threats as key challenges, Leaders have also identified the need to bolster their data capabilities through the use of advanced analytics to develop actionable insights in fast-moving markets.
  • Leaders are looking to invest in AI and Internet of Things. Emerging technologies such as AI (including cognitive services and robotics) and IoT are areas where Leaders are investing in for 2018. Besides these emerging technologies, Leaders are more interested in investing in big data analytics to mine data for actionable insights than others.
Arvie de Vera, Head of Fintech Group - UnionBank
In the Philippines, Microsoft recently partnered with UnionBank to support its digital journey with blockchain technology on Azure, one of the first Southeast Asian banks to conduct such trials. Microsoft's technology allows the bank to have a wider coverage at a lower cost, lower risk, and greater efficiency. This will allow the bank to reach a bigger under-served market in rural areas of the Philippines. This blockchain technology will enable UnionBank to offer a more open and transparent system, which will help promote greater financial inclusion in the Philippines.

Top 3 Benefits to the Society of Digital Transformation

  1. Potential increment to personal income through freelance and digital work
  2. Creation of more higher value jobs
  3. Increased educational and training opportunities
"The rise of digital transformation in Asia Pacific economies will affect the labor market where many types of jobs will evolve and change. What is encouraging is that 84% of respondents are confident that their employees already have future ready skills that will help them to transition to new roles," said Bayaborda.

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