Mouthing digitalization

Published December 9, 2022, 12:05 AM

by Bernie Cahiles-Magkilat


Bernie Cahiles-Magkilat

Even before the pandemic, the term digitalization was already floating out there. But when the pandemic broke out, the term became a household name. The exigency of the times has forced the government and the private sector to run to technology for comfort.

Everybody’s mouthing digitalization, like it was the best weapon to come out after the pandemic failed in its darn best to erase civilization. But what is digitalization, really? How is it differentiated from digitization? I myself got confused.

Based on my readings, digitization is conversion of the analog or physical data into computer friendly data. When we scan a photo or a document, we are in effect digitizing that object without altering what is written in the document. That’s the time when computerization started.

But digitalization is way beyond computerization and digitization. It is a transformation journey.

Digitalization is embracing and making use of digital technology to collect data, establish trends, and make better business decisions. Simply put, we can digitize a document, but you can digitalize a factory or a bureaucracy. It is making use of digital technology to achieve the desired goals.

With digitalization in place, organizations and businesses can begin to create new value chains and experiences that are collaborative, interactive, sustainable, and profitable.

A digitalized bureaucracy eases and makes processes done quickly. It eliminates red tape, plugs inefficiencies, and drives good governance, resulting in better public service and higher satisfaction of the governed.

Anti Red Tape Authority (ARTA) Director General Ernesto V. Perez said that while we do not have any measure that shall determine what agencies have achieved big advancements in digitalization, ARTA has been working closely with key government agencies to facilitate ease of doing business in the country.

According to the 2020 UN E-Government Development Index, an index that assesses the development and adoption of e-government in all member states of the United Nations, the Philippines ranked 77th. Regionally, the Philippines is ranked fifth. Nonetheless, there is room for improvement in the adoption of e-government platforms in the country.

In the private sector, I can say the Aboitiz Group is one that has really put digitalization at its core.

Sabin Aboitiz, president and CEO of the old legacy business empire with Cebuano roots, does not mince words as he spearheads the company’s pivot to become the country’s first “techglomerate.”

This Philippine conglomerate that started a small hemp trading company in Leyte recently celebrated 100 years. The company has expanded over the years into a major player in power, banking, financial services, infrastructure, food, land, construction, shipbuilding and now data science and artificial intelligence.

According to Sabin, the Aboitiz Group’s idea of digital transformation started seven or eight years ago, but failed to do what they wanted because everything was a no. So, they waited until the mind was receptive to technology changes.

I remember several years ago before the pandemic when a group of researchers, perhaps commissioned by the bank, was trying to feel the consumers’ pulse about digital banking. The survey led to Unionbank. I told the surveyor that Unionbank was so much ahead of its time. But the pandemic came, and there, Unionbank was ahead of everyone else, with security features that made its transactions safe and secure while others succumbed to cyberattacks, phishing, smishing and whatever forms of scams.

“Thank God the pandemic happened that really opened the mind and so the timing was right,” Sabin said in jest.

What do you do with your data? Monetize it! “Data is the new oil,” said Sabin.

And so, the company took the plunge a year and a half ago at the height of the pandemic to become the Philippines first “techglomerate.”

Last October in Singapore, the Aboitiz Group formally launched its data science and artificial intelligence (DSAI) arm — Aboitiz Data Innovation (ADI). ADI was intentionally based in Singapore because the city-state provides access to funding and human resources. Singapore is home to tech innovators and is now the world’s financial hub overtaking Hong Kong.

“If we don’t do this, we will fall farther and farther behind,” Sabin said adding that through digital transformation the Philippines can leap frog from behind.

Already, ADI consolidates the DSAI operating model across the Group and promotes a data-driven culture across the organization. Its chief responsibility is to transform data into business outcomes, exploit information to make better decisions, reinvent business models, and develop high-value solutions to create new processes, products, services, and on to better margins.

The Aboitiz Group has also forged partnerships overseas to widen its reach to offer services to companies around the world as technology enabler. ADI is looking at partnerships with government agencies and local firms.

Sabin said there are two reasons for the creation of ADI. First, there is no choice. “We’ve been looking for what to do, how to help the country, as far as data is concerned. Our goal is to be the data backbone of the country,” he said.

Second, he said, the Marcos administration is also very, very, very focused on digitalization.

And Sabin made it clear, “ADI is profit. Non-profit is not good because you have no incentive.” If it does not earn money, the venture is likely unsustainable in the long run. I cannot agree more.