Companies face budget, regulation issues in digital transformation
BUDGET, regulations, cybersecurity, and inability to appreciate the benefits of technologies remain the top constraints that keep some companies from going digital, business leaders said.
Budget is a major constraint “because digital transformation is not cheap,” said David L. Almirol, Jr., chief executive officer and founder of software development and IT solutions provider Multisys Technologies Corp., at the BusinessWorld Insights online forum on Wednesday.
“It’s not cheap to build your own platform. It’s not cheap to do integration. It’s not also cheap to reconstruct your whole platform because you have to adopt the ‘new normal’ processes,” he added.
He noted there are ways to address this constraint. “For example, Multisys has programs where our customers don’t have to pay us. We do some kind of revenue-sharing with them. In fact, we have like 85 companies that we are supporting now.”
Gwendolyn de Lara-Kelley, first vice-president, chief technology officer, and head of information technology division of Insular Life Assurance Co., Ltd., said: “Top of mind would be regulations and cybersecurity.”
Putting in place a secured platform that is open to the public costs a lot, she noted. The insurance industry also has to deal with regulatory issues.
“For the insurance industry, regulation would be a constraint because it’s a highly regulated industry. There are strict policies with regard to e-commerce, data privacy, and capitalization requirements, which could in a way constrain the product development process or affect how we design the customer experience, or how quickly we want to adopt new technologies,” Ms. Kelley explained.
The buying public is also one of the major factors when going digital, because an innovation cannot be successful if people will not use it, she noted. “Hence, the readiness to adjust to the new technology that you are offering is also one of the constraints.”
Ma. Victoria “Marivic” C. Españo, chairperson and chief executive officer of P&A Grant Thornton, said: “Based on observation, the biggest challenge for companies is probably the inability to appreciate how technologies can help them achieve their business goals and execute their strategies.”
“For some companies, technology is nice to have and it seems to be the goal by itself. I believe that technology is not a goal. It is a tool, a means to achieve the strategic goals of the business. It is an enabler,” she added.
She stressed that companies should first define their strategies and the technology they need for the execution.
“If there is an alignment, then they will have a burning issue to execute their digital transformation plans,” she said. “Digitalization establishes the why. Why are we going digital? Because you need it to execute your strategies.”
Mr. Almirol pointed out that the focus of companies nowadays should be on “using something effective and readily available.”
“It’s no longer about building something… People cannot wait. Companies cannot wait, or else they will be left behind,” he said.
Ms. Kelley said life insurance companies have started seeing the current situation as an opportunity to partner with regulators and accredited industry associations to raise awareness, especially about the regulatory constraints they face amid their digital transformation journey.