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Despite ongoing Covid-19 concerns, the technology market in the Philippines is forecasting continued growth during 2020, driven by wider digital transformation initiatives adopted at local enterprise levels.
According to GlobalData findings - Enterprise ICT Investment Trends 2020 Philippines - 84 per cent of Filipino enterprises have increased technology budget spend this year, compared to only 66 per cent in 2019. This is despite new business challenges such as declining sales and retrenchment due to the pandemic.
Operational efficiency and customer satisfaction top two drivers
As the role of IT moves from operational support to business enabler, technology purchasing today is significantly influenced by outcome-based objectives. Philippine enterprises have identified improving operational efficiency and increasing customer satisfaction as the top two drivers specific to technology investment in 2020.
More businesses are considering investments in technologies such as cloud, the Internet of Things (IoT) and unified communication and collaboration (UC&C), alongside artificial intelligence and machine learning to increase operational efficiency and enhance customer experience.
According to the report, 84 per cent and 74 per cent of enterprises are considering investing in managed cloud services and cloud management platform, respectively, within the next two years.
This enables businesses to orchestrate workloads across different platforms to drive operational efficiency. Local enterprises are also looking to increase investment in IoT and analytics to gain a wider view of operational data to improve business processes (predictive maintenance) as well as to enhance customer experience (real-time asset tracking for logistics company).
Key investment areas
UC&C and contact centre tools represent the other key investment areas in the Philippines, with 80 per cent of the local enterprises planning to implement cloud-based UC within the next 24 months.
Meanwhile, 88 per cent of customers plan to invest in team collaboration applications while 78 per cent will deploy IP contact centre solutions during the same period.
Cloud-based UC&C enables businesses to address the increasing needs for remote working due to Covid-19 while contact centre solutions provides the flexibility and scalability needed to meet the changing customers’ expectations (remote agent, physical store to e-commerce). This is also in-line with the top technology investment drivers: to improve operational efficiency and increase customer satisfaction.
Spending remains unchanged
Despite the significant business impact of Covid-19 such as declining sales, retrenchment and longer operational support, the overall ICT spending in the Philippines remained unchanged.
The majority of enterprises indicated the same budget across different technology areas pre and post pandemic crisis. For example, in managed services, 68 per cent claimed to have the same budget, 18 per cent increased and 14 per cent decreased.
Further, Philippine enterprises have increased their budget for digital transformation initiatives from 44 per cent to 50 per cent, out of the total technology spending in 2020.
The increase in digital transformation will drive outcome-based solutions and managed services demands in the country. However, there are several key areas providers need to focus on to fill the gap, such as professional services to address business challenges in the post-Covid-19 era, as well as cloud and network infrastructure.
Alfie Amir is principal analyst at GlobalData
