Cybersecurity in the age of digital transformation

By Lionell Go Macahilig

Over the past two to three years, the ICT landscape has witnessed the rise of third platform technologies which primarily consisted of core technologies such as cloud computing, data analytics, mobility, and the mashups of these led to the development of innovation accelerators. Along with the allied technologies of mobile devices and mobile apps, all of these brought about 20 to 25 year technological shift that affected the way we do things, from the personal level and to our work as well.

By 2020, renowned market research and consulting firm International Data Corporation (IDC) is anticipating that 90% of growth in IT will actually come from the third platform technologies and, more interestingly, 15% of it will actually come from the emerging markets such as the Philippines. During the same period, the Philippines will definitely live in the new app economy as there will be 20x increase in the number of apps that we are going to use.

The Philippine GDP growth from 2010 to 2020 shows a healthy ICT spending in the country. In spite of the GDP drop in 2011, which also caused a 4.2% drop in ICT spending in that year, GDP from 2012 to 2014 grew again and it was observed that SMEs and enterprises were contributing a lot to ICT spending. Last year, IDC saw that the total ICT spending in the Philippines reached about PhP 14-billion in total and by 2020, it is expected to become a PhP 16-billion ICT economy, at par with our neighboring countries in the ASEAN region.

Largely, the Philippines is still a hardware-centric market, in which devices make up the bulk of ICT spending. However, this year, IDC is seeing that there will be a significant growth in IT services. It is a good sign, maturing enough particularly in the SME and enterprise sectors. By 2020, there will be a huge chunk of IT services in the country, leading to what IDC believes as Philippines 4.0 or the dawn of the DX economy.

DX economy and cybersecurity attacks

What does DX economy mean? It is an economy wherein digital transformation grew to macroeconomic scale and it impacts the core of what industry leaders do and how they operate as a business. IDC said that the Philippines saw a DX economy for the first time in 2017. By 2020, 25% of the top 1,000 companies in the country will be assessed depending on their ability to come up with digitally enhanced services, products, and experiences.

In the Philippines, many local organizations have also shared their digital transformation journey, but mainly on the level of initiatives. By the year 2020, IDC is seeing more Filipino companies level up their DX journey as they recognize their ability to create digitally enhanced products and services and experiences will be very important in their success in the market. Any organization can be perceived as an emerging tech company and the Philippine economy will be reshaped in the process.

Coinciding with the ongoing digital transformation journey among the companies in the Philippines, there have been a number of cybersecurity issues both in the private and public sectors. IDC is seeing that this 2018, cybersecurity will be one of the top level business priorities in organizations, exceeding the capital spending for about 30% in top 1,000 Filipino companies. Threats can be internal or external and employees may not be aware that they are letting external threats enter the networks of their companies. Of course, there will always be external threats coming from hackers or third party organizations. Today, companies are recognizing that having a limited IT staff or letting their traditional IT department handle all cybersecurity threats will not be sufficient in the long run, taking into account the increasing complexity of the cybersecurity threats that are happening recently. CIOs are aware of these threats, however, current measures to combat them many not be that solid. Therefore, CIOs will need to enable adaptive responses to security compliance and organizations will need to engage employees across the enterprise to make security everyone’s concern.

Successful attacks have significantly raised interest in and awareness of the modernized security infrastructure in the Philippines. In 2016, the list of cybersecurity attacks in the country actually included Comelec wherein private, confidential information of voters was leaked out to the public. There’s also the 2016 Bangladesh bank heist wherein about USD 100-million was transferred from a Bangladesh bank by the hackers. There were also instances of hacking activities related to the West Philippine territorial issues were reported. A security firm also noticed a malware that attempted to spy our government and even some of our private sectors and this was traced back to China.

How Philippine companies should respond

In response to the building of the Philippine DX economy and addressing cybersecurity concerns surrounding it, organizations will continue to recognize in favor of policies for digital innovation and will not allow themselves to lag behind their peers, especially today in this competitive market. More and more management level officials will verse with the potentials of the DX and will recognize that having a dedicated DX team will become more efficient for them to handle their DX initiatives and face potential cyberattacks. Companies will begin to transition from having only temporary or ad hoc groups into creating a specialized team composed of officers who are more knowledgeable or well-trained in the field of DX.

The structure of DX teams in the Philippines will be headed by a tech-savvy CEO who will be greatly involved in mapping or implementing the DX initiatives. He or she will be supported by a chief data officer who will serve as the agent of change for this DX team. There will be a strategically minded chief intelligence officer, chief information officer, or chief technology officer who will be in charge of creating digitally enhanced portfolio. Digital bootcamps will be used to enhance the tech-savviness of other officers or employees. More top level executives and enterprises needing to put DX at the core of their business strategies.

IDC is seeing that 46% of CIOs believe that DX will help them improve their competitiveness, whereas 32% will believe that DX will help them retain their edge and relevance in the market. Twenty-two percent will be noting that DX will help them gain market share, while 57% of CIOs will have already funds allocated for DX initiatives. In order for these DX teams to become successful, companies will need to invest more on making their executives tech savvy enough in adopting newer technologies in order to move from legacy systems to newer forms of technology and respond to potential cybersecurity threats proactively.