Cy­ber­se­cu­rity in the age of dig­i­tal trans­for­ma­tion

Manila Bulletin - - Front Page - 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 per­cent of growth in IT will ac­tu­ally come from the third plat­form tech­nolo­gies and, more in­ter­est­ingly, 15 per­cent 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 per­cent 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 114 bil­lion in to­tal and by 2020, it is ex­pected to reach 116-bil­lion ICT econ­omy, at par with our neigh­bor­ing coun­tries in the ASEAN re­gion.

Largely, the Philip­pines is still a hard­ware-cen­tric mar­ket, when de­vices make up the bulk of ICT spend­ing. How­ever, this year, IDC fore­sees 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 where dig­i­tal trans­for­ma­tion has grown 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 per­cent 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 per­cent 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 where pri­vate, con­fi­den­tial in­for­ma­tion of vot­ers was leaked out to the pub­lic.

There was also the 2016 Bangladesh bank heist where about US$ 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 the pri­vate sec­tor 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, 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 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 per­cent of CIOs be­lieve that DX will help them im­prove their com­pet­i­tive­ness, whereas 32 per­cent 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 per­cent 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 train­ing their ex­ec­u­tives to be tech savvy enough to adopt newer tech­nolo­gies in or­der to move from legacy sys­tems to newer forms of tech­nol­ogy and re­spond to po­ten­tial cy­ber­se­cu­rity threats proac­tively.

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