PHILIPPINE BUSINESSES should optimize their existing investments for efficiency and determine if they need to tap emerging technologies like artificial intelligence (AI) to boost their operations, a US-based software company said.
“Don’t always go looking for the shiny new toy. You have to work with the huge investments that you have. You can streamline them. You can make them more efficient,” Seth Ravin, chief executive officer (CEO) of Rimini Street, told BusinessWorld in a video interview on Oct. 4.
Rimini Street began operating in the Philippines in 2020. It offers third-party enterprise software support services to help companies reduce costs and improve the performance of their existing systems.
Mr. Ravin said most companies need to focus on existing system optimization to boost their operations rather than simply adopting the latest technologies.
“If I would say, 60 to 70% on existing structures and optimization and about 30% on new technology and innovation,” he said. “Sometimes, they’ve got a solution looking for a problem instead of a problem looking for a solution. The IT (information technology) department gets scared. They don’t want to tell the board they’re wrong.”
He noted how some boards in recent years wanted their firms to be cloud-first companies without knowing what it entailed, resulting in losses.
“Now, companies have so much cloud storage and so many different cloud providers and it’s costing them a fortune. They’re losing money. [Some companies] are now into cloud rationalization or even repatriation coming back from the cloud because [they] went too far,” Mr. Ravin said.
Similarly, firms are now overexcited about AI as the new toy, “but then when you look at it, you find out it’s very weak,” he said. “It’s not enterprise AI.”
“The reality is, to implement this new technology, whether it’s AI, big data, analytics, or even productivity and automation — which are great at reducing labor costs — the problem is everyone is trying to make investments from their daily operating budget as the board of directors does not generally approve additional money for the transformation costs,” Mr. Ravin said.
This leads to the companies being stuck as they have to pay their ongoing bills while having to fund their tech transformation, he said.
“We get to come in and find ways to find within their existing budgets. If we can reduce certain items, we can free up that capital to fund these other projects,” he said.
Philippine firms have tighter budgets than those in other countries, but this does not necessarily mean they need to scrimp on innovation, Mr. Ravin said.
He noted how one of Rimini’s local clients, Philippine Airlines, was able to maximize its investments as over 50% of its savings on annual maintenance costs were reinvested in expanded support, IT modernization, and business intelligence initiatives. — Aubrey Rose A. Inosante