A case of confluence

Driven by a mission to reduce maternal mortality and boost female healthcare in the Philippines, a highly specialized biopharmaceutical company fast-tracks its growth and expansion plans in a country where generic medicines reign supreme

After 25 years spent building a name for herself in the country’s highly competitive pharmaceutical industry, Jane Villablanca was well on her way to retirement.

Having held various sales, marketing and key management positions in companies like Johnson & Johnson, Schering Plough, Cathay Drug, and Merck Sharp & Dohme, Villablanca had already made her rounds in the industry. By 2012, she decided it was high time she took on the more active role of doting mom to her two young daughters. “Working for the pharmaceutical industry is so fast-paced that before you know it, you’ll wake up and realize you’ve been working for so long without pause. I waited so long to have kids, and yet I didn’t get to spend enough time with them,” she shares.

In the pharmaceuticals biz where it’s quite commonplace to get pirated by other companies, it isn’t exactly surprising that the moment Villablanca handed in her resignation, the job offers came. This was because “a lot of companies from India, Pakistan, Korea, China were keen on establishing offices in the Philippines because the market had opened up,” she says.

A COMPANY AFTER HER OWN HEART

It was Switzerland-based Ferring Pharmaceuticals that finally coaxed Villablanca out of “retirement” and made her its general manager. A research-driven specialty biopharmaceutical company with market presence in 60 countries worldwide, Ferring Pharmaceuticals develops innovative products in the areas of reproductive health, urology, gastroenterology and endocrinology. It has the world’s largest portfolio of peptide-based medicine and excels in recombinant protein and biological therapeutics.

“During this time, generics medicine had risen in popularity and it was very rare to establish companies offering premium products,” Villablanca shares. But even with market conditions being as they were, she avers the company could not have expanded into the Philippines at a better time.

More than the growth potential in the Philippines being the second fastest growing economy in Asia, it’s the government’s current focus on universal healthcare that makes gives Ferring Pharmaceuticals a vital reason to strengthen its presence in the market.

It used to be that healthcare was at the bottom of the government’s agenda, Villablanca says, but “it’s now a key priority. For one, 85 percent of the proceeds of the Sin Tax Law will go to healthcare, which is very good. PhilHealth is expanding its coverage, and then there’s the enactment of the Reproductive Health Law. The Philippines is a growth market, and Ferring wants to be present here.”

The controversial RH Law also has a component that hits close to home. “When people talk about the RH Law, the contraception part is always the one that’s hyped up,” Villablanca says. “But the other side to it—the pro-conception or pro-creation part—is just as important as it includes the treatment, management and prevention of infertility,” she asserts.

Ferring currently offers a full line of products useful in every stage of IVF or In Vitro Fertilization. Based on controlled clinical trials, its product, Menopur, resulted in 13 percent more live births compared to other agents. “This is something quite close to my heart as I myself have undergone four IVFs. That time, IVF success rates were not as good, but now that the Philippines is actually more advanced in terms of fertility treatment, I thought that by helping a company like Ferring enter the Philippine market, I would be able to make a difference by giving infertile couples a better chance of starting a family,” she says, citing that in the Philippines, it is estimated that around nine percent of Filipino couples have infertility problems.

MAKING SPECIALIZED HEALTHCARE ACCESSIBLE

Only less than a year old in the Philippines, Villablanca shares that Ferring Pharmaceuticals is quite keen on collaborating with the government and the medical community in bringing value-added innovative products that will provide life-changing impacts in the areas of reproductive health.

Having headed CSR projects for her previous company, Johnson & Johnson, CSR is clearly in Villablanca’s blood. “There are really a lot of areas where we can partner with the government,” she says. Reducing maternal mortality, in particular, is something Villablanca is looking to get the company involved in.

In the Philippines, about 211 mothers die for every 100,000 childbirths. This rate is very high compared to the goal of the Department of Health, which is to bring the number down to the Millennium Development Goal of less than 50 deaths for every 100,000 births. “We have products that will help save the lives of mothers during childbirth by preventing post-partum hemorrhage and delay imminent pre-term birth,” shares Villablanca, adding that they have also partnered with MSD and the World Health Organization in this regard.

“You’d be surprised that even big hospitals like Makati Medical Center would have mothers dying from childbirth,” Villablanca shares. “It doesn’t just happen in rural areas, in lying-in hospitals—and it’s not just the mothers’ lives at stake here. The kids, ulila na sa nanay. So imagine the difference Ferring’s products can make,” she says.

In a very fertile market like the Philippines where there are two million births every year, there is indeed a lot of potential for a company like Ferring to further elevate the level of healthcare available in the country. It helps, perhaps, that the DOH is of the same mindset. “When we inaugurated the company a few months back, our president from Switzerland came here and met with Usec. Teodoro Herbosa. He explained to us what happened in PH—how healthcare has improved and how we have funding now. My boss was really pleased with what they saw and decided to immediately accelerate their investments here,” reports Villablanca.

While this spells more work for the new general manager—“The plan was to grow gradually, but now they told me to accelerate everything by two years,” Villablanca shares, laughing—it is definitely a good problem to have.
Published July 6, 2014 in the Business Agenda section of the Manila Bulletin

A matter of differentiation

How can smaller firms slug it out with giants? WilkonStruct’s got the answer

Here’s a question often pondered by entrepreneurs, business leaders and innovators alike: Is it better to be a big fish in a small pond, or a small fish in a big pond?

Without doubt, playing in one or both arenas has its own set of opportunities and challenges. For entrepreneurs looking to start a business, swimming in a big pond like the country’s currently booming property sector, for example, entails an almost-manic,conscious effort to not get left behind. With giants like Ayala Land, Inc., SMDC and Robinsons Land Corporation ensuring high entry barriers, how then would “younger”, smaller companies remain competitive—and, more importantly, actually succeed?

The key to slugging it out with the big guys, it would seem, is differentiation. In the case of WilkonStruct Development Corporation (WilkonStruct), a firm offering construction services, interior fit-outs and supplies, it means targeting a certain niche in the industry, leveraging on the company’s strengths, and, once they’ve established an excellent track record, making itself the Big Fish in its segmented little pond.

“Their (the big developers’) market is different from ours. They have the bigger projects, but we look for clients with faster turnover—mostly those starting their businesses,” shares Bryant Cuison, EVP of Operations for WilkonStruct. A current client of theirs, he shares, is a company who recently brought in a Korean café franchise to the country. Now on their fifth branch, the company commissioned Cuison’s company to do the cafés’ interior fit-outs.

“We target a market that doesn’t know a lot about construction yet, so they tend to [favor] companies like ours because we’re more hands-on. We work with start-ups a lot—our strength is in construction and interior fit-outs, so we work on restaurants, retail outlets—and when they grow and expand their business, we end up growing with them as well,” he says.

It’s a strategy that’s clearly worked out well for the company. “We have a basket of clients already. We may not be as big as other contractors, but we compete in the best way we know how. We’re not the cheapest—sometimes we’re the most expensive or we fall somewhere in the middle—but what we make sure is that we always stand by our word. When we promise to deliver in 30 or 40 days, we work really hard to hit that target,” Cuison assures.

TURNING TRAGEDY TO OPPORTUNITY

For a company that started as far back as the 1990s, WilkonStruct isn’t exactly a young player in the property sector. “We’ve been in the business for over 10 years,” Cuison informs, adding that the company got its big break when his dad, William, saw the opportunity to enter the construction market after the 1990 earthquake struck Northern Luzon.

“My dad was abroad the time of the earthquake. When he came back, he saw it as an opportunity to get into construction because of his architecture background. Before he would only do small projects, but because a lot of construction had to be done in Dagupan [and other parts of] Pangasinan, that enabled the business to grow,” shares the second-generation Cuison, who, together with his younger brother Patrick, now works full-time for the family biz.

“Our dad’s still very active in the company, but he’s leaving other things like operations, finance and marketing to both of us,” Cuison says. Both Management graduates, the brothers’ involvement in the company could not come at a better time.

Having worked in the corporate setting for over 10 years, Cuison says of the changes they’ve implemented since joining the company: “Before we came in, it was run like a mom-and-pop, but now it’s more organized, more professional. I’ve been in the corporate setting for a long time—I worked for both SM and Ayala—and I’ve seen how their systems work, how they grew…these things we apply now in the company. My brother’s in charge of finance and we’ve been stricter in terms of finances, how we manage our cashflow, project development…things like that.”

BUBBLE TROUBLE?

With the country’s property sector growing at an unprecedented pace in the last few years, it isn’t surprising that the risk of a real estate bubble has been on investors’ minds. But Cuison is confident that, bubble or no, WilkonStruct will still power through.

“Whether we have a healthy economy or not, we’d still have business coming in. Meron pa ring [there would still be] projects,” he says, adding that “as entrepreneurs, it’s all about survival. You can’t stop what you are doing just because people are saying there’s [bound to be] a bubble. Either you look for another market that needs your service or you reinvent your company. We’re not afraid…we’ve gone through a lot in this industry, and we’re still here.”

One strategy the brothers have implemented to sustain the business is leveraging on digital technology and social media. “It’s a good way to increase our prospect base because it’s very targeted. We started doing this just a few months ago—the first week we set up our Facebook page, we got six inquiries and we closed a deal. That’s not bad, considering we only spent R5,000 to set up the account and we got a good contract out of it,” he shares.

To further strengthen the company, a strategic partnership with Australian design and engineering firm Bryant Concepts is also in the works. “This is in anticipation of the coming ASEAN integration in 2015,” Cuison shares, adding, “We’re looking at different areas in the ASEAN region to expand our business. Indonesia in particular doesn’t have a lot of good construction systems, so we’re looking into that market as we’re strong in fit-outs.”

The grand plan, Cuison reveals, is to really get into property development. “Our vision has always been to be at par with the best in the industry. We already have a parcel of land in Antipolo that we’d like to start developing,” he says. “This year, our focus is really to stabilize the operations of the company. We’re getting there—we’re young and we have a lot of time to develop the organization. Hopefully, this year everything will be planned out, and then we grow full blast,” he ends.

Published June 22, 2014 at the Manila Bulletin. 

The big deal about Big Data

EMC Global Services’ Bill Schmarzo on Big Data and its ability to ‘metamorphosize’ businesses in the digital age

Clearly, in this day and age of social media and analytics, technologies surrounding Big Data have become quite the hot commodity—not exactly surprising, especially with the deluge of data the world has been consuming and dishing out in recent years.

“The digital universe,” states an IDC report commissioned by technology giant EMC, “is growing 40 percent a year into the next decade,” and this is expanding to include not only the increasing number of people and businesses doing everything online, but also in terms of smart devices connected to the Internet. “It is doubling in size every two years, and by 2020 the digital universe—the data we create and copy annually—will reach 44 zettabytes, or 44 trillion gigabytes,” the report furthers.

Such phenomenon will bring with it opportunities for businesses around the world—but only those who know exactly what to do with such vast amount of information would be able to leverage on the trend.

The first step, asserts Bill Schmarzo, is to forget about creating a Big Data strategy for your business. The chief technology officer of EMC Global Services’ enterprise information management and analytics service line, Schmarzo insists that organizations do not need a big data strategy. Instead, he says, “you need a business strategy that incorporates big data. When you flip that bit, it changes your perspective entirely on how you approach big data. It takes this unbounded technology debate and boils it down to the one thing that matters: how will this make [the organization] more money?”

IT ALL BOILS DOWN TO ECONOMICS

In his book “Big Data: Understanding how data powers big businesses,” Schmarzo presents EMC’s Big Data Model Maturity Index, which enables customers to understand where they are with respect to integrating data and analytics into their business operations, and gives them a roadmap for where they could be when they’ve successfully optimized and monetized the big data they have access to.

According to Schmarzo, the index comprises five phases, the first of which is the monitoring phase, where “99.5 percent of the companies I talk to—if not higher—are still in. They’re looking at data from a monitoring perspective, which is a great starting point because organizations are able to identify their key business processes, the things they do that provide differentiation.”

More than anything else, Schmarzo says that big data “is all about the economics. What that means is that the cost to manage, store and analyze data is now 20 to 50 times cheaper than it was a couple years ago. When you deal with that kind of change, it forces you to think differently about how you approach your key business processes.”

DATA WILL NOT REPLACE THINKING

When it comes to leveraging on big data, businesses would do well to remember that it isn’t exactly the amount of data that drives success. It’s the insights one teases out of this information that will lend value to an organization.

“Leverage on predictive analytics and machine learning to mine this source of data, to find things that are unusual,” advises Schmarzo.Once one is in the area of unusualness, “apply human sense to identify the things that are repeatable. Are there repeatable things going on? Because if there are, then you can find insights that will help you around improving your key business processes. You can then transition from ‘why something happened’ to ‘what should I do to take advantage of it?’”

Insights gleaned from big data help companies deliver more actionable, more relevant user experiences for customers. “You don’t monetize data—you monetize insights,” asserts Schmarzo. And it doesn’t end with the customer either. “How will you [use these insights to] empower your frontline employees to actually be more effective?”

In the end, the remarkable thing about big data is its ability to “metamorphosize” an organization. “One of the challenges of building business models is how do you ensure, drive and test it in serendipity. Models get stale if you don’t constantly tweak them. You can’t build a business model and just be done with it. Big data,” Schamrzo ends, “has the opportunity to change the metrics with which you measure success. In the end, it is more about business transformation than it is about technology.”

Published June 8, 2014 at the Manila Bulletin’s Business Agenda section.

Taking the Philippines to the 21st century

In the recent Asia CEO Forum, Architect Felino Palafox, Jr. asserts that long-term planning in infrastructure and urban renewal will ensure that the country’s economic growth remains unimpeded

A healthy, robust economy seems to be the new normal for the Philippines, which recently received its third investment grade credit rating from the Japan Credit Rating Agency Ltd. (JCRA), following the first two dished out by Fitch Ratings and Standard & Poor. With glowing statements like “Asia’s rising star” and “one of the world’s fastest growing economies” now being associated with the country, an atmosphere of positivity and optimism pervades both the public and private sector.

In his presentation at the latest Asia CEO Forum, however, Architect Felino “Jun” Palafox, Jr. cautions the crowd of local and foreign businessmen in attendance to “still be vigilant.”

“We were like this in 1976 and 1996,” relates the founder and managing partner of Palafox Associates, ranked among the world’s Top 100 Architectural Firms by “World Architecture Magazine”. “There was great optimism and we had many investors—but the euphoria of the EDSA revolution in 1986 eventually faded and we’ve had coup d’état attempts in 1999. So let’s still be vigilant,” he says.

According to Palafox, the country’s existing and planned infrastructure will simply not support the current rates of growth in population and the economy. Cities play a crucial role in national development, and piecemeal “solutions” proposed by both public and private sector groups will only serve to further fragment the city and obstruct movement.

“In the Makati central business district (CBD), the daytime population is 11 times the night time population, so you have that problem of bringing in that amount of people in the morning and bringing them out at night. It’s the reason why we have a worsening traffic and pollution situation,” he points out, adding that without immediate and long-term planning in infrastructure and urban renewal, the country’s capital, key to the nation’s economic health, would be mired in congestion in a matter of time.

Shiela Lobien, director of global real estate consultant Jones Lang LaSalle (JLL), underscores the need for heightened strategic planning, especially with the growth of residential, office and commercial property, as well as rising industries like logistics and manufacturing. “Almost all BPOs and call centers are planning to expand. In 2012, office takeup in Metro Manila was at a record-breaking 480,000 square meters, and that number is likely to increase in 2013,” Lobien shares.

Taking PH To The 21st Century

Population distribution, not population growth, is really the country’s biggest challenge. The development of strong urban growth centers outside of Metro Manila is one strategy to decongest the capital city and spread out economic opportunities throughout the country.

In his presentation at the forum titled “Philippines 2021: Philippines at 500,” Palafox presents his vision for the country’s urban development. He highlights the advantages of having high-rise, vertical developments versus the Los Angeles-inspired urban sprawl model Manila follows today. “Urban sprawl isn’t sustainable anymore,” he says, pointing out that the environmental disasters the country has faced in the last couple of years could’ve been minimized if we hadn’t “practically covered our cities with buildings and roads and infrastructure. We hardly have any open spaces. We really have to change our paradigm and go vertical,” he advises.

He also emphasizes the need to put in place road, rail, air and sea infrastructure if we want the country’s growth unimpeded. In  more progressive cities of the world, people only spend about 30 to 45 minutes in traffic. “Cities should not be designed for automobiles—they should be designed for the human being. Livable, walkable, with wide open spaces,” he states. He cites his masterplan for the city of San Juan, where he proposed to the local government to apply the best urban design and planning practices in the world. Geographically the strategic center of Metro Manila, the 594-hectare San Juan will have three main levels: “Street level, second level interconnected walkways, and third level elevated monorail. We’re proposing San Juan be a vertical city—no more building height restrictions provided you pay P2,000 per square meter as a development charge/impact fee,” he says.

Palafox also showed a series of architectural renderings—“Postcards from the future,” he calls them—of the urban renewal of the communities along the Pasig River and other esteros in Metro Manila.

Institutional Memory

As grand as Palafox’s visions may be for the Philippines of the future, expatriate businessman John Underwood is quick to ask: “Who is listening? If you were to pick three people who are influential to the country—so we don’t all leave here as cynics, feeling that was a good presentation but [asking ourselves] what does it really mean? Name three top individuals who could make a difference to this country.”

Palafox cites Tourism Secretary Mon Jimenez and Public Works Secretary Rogelio Singson as among the individuals he feels would listen. “Another thing missing in our country,” he adds, “is the presence of city architects and city planners per city. We don’t have that. So the ones deciding are politicians, contractors and engineers.”

Meralco executive Mon Segismundo also points out the issue of continuity: “How can we implement and execute a 10-year, 20-year development plan when the Presidential term is just six years, and the mayors have three years?” This, Palafox was spared from answering, as political economist Dr. Bernie Villegas voiced his opinion.

“The problem of changes of government every three years [requires that] at least three associations have the ‘institutional memory’ our politicians do not have,” Villegas says, citing three associations in particular: “First, the seven foreign chambers of commerce, who came out with Arangkada. They have the visual memory and can put in a lot of pressure in our leadership. Next is the Makati Business Club, who is constantly talking about public issues; and then there’s MAP (Management Association of the Philippines).”

Villegas then proposes quite the “provocative” suggestion to further address this particular issue. “Jun and I agreed to give a briefing to Mayor Erap Estrada of Manila. We will give him all these specific information [Jun has presented] and we will convince him to be there for the next nine years. He can be re-elected twice. It’s also very providential that he’s in the same party as the Vice President, who, with greatest probability may be the next President. Again, this is very provocative. And so we have, at least, certain possibilities that the ideas of Jun Palafox can be implemented,” he boldly says.

With the apparent approval of the crowd gathered in the forum—comprising mostly high-level executives from the local and expatriate business community—Palafox’s grand vision for the Philippines in 2021 may just be realized yet. “If we revisit the location of the Philippines to the rest of the world, we’re actually in the strategic center. Many centuries ago, the center of trade and commerce was the Mediterranean; [in] the past century, it was the Atlantic; now it’s Asia Pacific, and we’re right in the center. But we’re still using obsolete ideas, laws, codes and so on. Let’s not get stuck with 20th century solutions and bring the Philippines to the 21st century,” he says.

 

What’s next for MEXX

A European fashion brand’s reentry into the Philippine fashion market is elevating the way retail is being done in the Philippines

A line in the Pet Shop Boys’ classic track “Opportunities (Let’s make lots of money)” aptly sums up what’s behind European fashion label MEXX’s successful comeback in the European market in the last few years: “I’ve got the brains and you’ve got the looks.”
In MEXX’s case, it’s a confluence of both: a smarter management team and an attractive product—a combination that’s literally making the “boutique-orientated” label lots of money, as evidenced by its almost overnight jump in 2009 from being a 1,800-euro per square meter business and into a 4,000-euro per square meter business.

In a recent press briefing, MEXX Asia Pacific Senior Vice President Peter Hammond shares that this is quite the feat as the fashion brand had gone the route of Apple before it rehired founder Steve Jobs in 1997. “It just lost its way,” says Hammond. The Amsterdam-based fashion label founded by fashion designer Rattan Chadha in 1986 became a 1.45 billion-euro business back in the early 2000s, making it one of the biggest fashion brands in Europe. “It started attracting a lot of suitors,” he shares, adding that the Liz Claiborne Group eventually bought it for $264 million in 2001.

“It was,” Hammond puts it bluntly, “a recipe for disaster. Fashion brands are about character and charisma, and a lot of people get mixed up when the company gets big. They think it’s only about the numbers and volume, and if you go too far that way, you tend to lose your way a little bit.”

In 2011, as part of restructuring, the Liz Claiborne Group eventually sold MEXX to top private equity firm The Gores Group for $80 million, with the former retaining a 20 percent minority stake in the company.

Staging A Comeback
When the Claiborne group restructured Mexx back in 2009, new management came in to revamp the company. “The first thing they did was to go off to New York City to think about what to do to bring the brand back to what it was before,” Hammond shares, pertaining to what had made MEXX so popular in the 1990s: “MEXX is a European brand with a twist because the founders are actually Indian immigrants to Amsterdam. When Rattan Chadha and his brother launched MEXX they were very influenced by what their mom and sister wore, which was very contemporary Indian clothing/saris.”

What the Chadha brothers had done was take Indian fashion and build it into a European product. It’s what made MEXX among the strongest fashion labels in Europe—the exotic prints and details, the borders, the hardware used, and mostly because everything was “sexy, silk/chiffon, and flowing. These were the three big things that made it so popular,” Hammond says.

Revamping—not reinventing—the brand was really the key. “It’s not even about the designs—it’s about going back to the heart of the brand, which was Rattan bringing exotic prints and silks and chiffons, and then applying the seasonal fashion and colors to that base,” Hammond says.

Indeed, it was a move toward the right direction as MEXX has “come back to life in a big way in Europe.” In the last three years, Hammond reports that the value of the company has grown four times and is now back to being a profitable company and a relevant business. This year alone, MEXX will open 180 points of sale and are targeting 365 more stores in 2014—all this growth, amid the current European crisis.

“A crisis in Europe simply means that your demand goes from a hundred percent to 98 percent. It’s really a market share game there,” Hammond says. “If you’ve got one percent of market share, it’s very easy to steal another one percent off somebody else. In the last four months, everybody’s sales have been down 20 to 25 percent because stores are already selling summer pieces and winter refuses to finish. But MEXX has somehow maintained its demand while nobody’s growing at the moment. It’s the market share game and we still manage to pull up,” he relates.

MEXX In Manila
MEXX is actually no stranger to Philippine shores. The Rustans group had opened a store here in 2008, but as MEXX was then in a very difficult situation, supply became so big a concern that they had to close it down.

Now, MEXX is exclusively distributed by the Cinderella Marketing Corporation and has been quite aggressive when it comes to increasing the brand’s presence in the Philippines. “We just want more and more people to know that we’re here—we’re opening four stores in five months, and maybe a couple more in 2013 depending on the location and the availability,” Hammond reveals. He lauds their local partner’s commitment “for going all out. They don’t just say, let’s open one store and see how it goes. When they commit to a brand, they really commit to it. That’s really important because if you don’t believe in the brand wholeheartedly, and put it on the ground aggressively, it’s not going to get known to quickly.”

With the current glut of “big box”, mid-market high-street brands like Zara, Uniqlo and Topshop also expanding their presence in the Philippine market, MEXX is positioned “to not really compete with anybody,” Hammond points out. “First of all, we’ve got this exotic bend that other brands don’t have. We’re very blouse-, pants- and light knitwear-orientated where they tend to be very jeans-, T-shirts- and basics-orientated. We don’t want to exist in big boxes. We want to do lovely little boutiques, but have many of them in good locations, offer very personal service with a very high quality product at a very reasonable price. Our core price point in the Philippines is P2,700 to P3,000 but what you get for your money—especially if you turn the product inside-out and look at the lining, the details and everything—is really good,” he says.

According to Hammond, whose extensive experience in the retail development industry in the Asia Pacific spans 25 years, the Philippines is quite the relevant market for MEXX. Compared to other countries in the region, he says that the Philippine market is quite similar to Hong Kong in that “they really embrace European fashion and get it. It’s quite similar to Singapore because there’s a lot of middle-market brands there, but Singaporeans are still not sure about what real fashion is. Here, everyone’s fashion sense is really strong. I think that’s the big difference with the Philippines compared to most markets—the Filipino certainly knows who he/she is.”

With the amount of development happening in Manila and all over the country, Hammond says that the Philippines has finally reached its tipping point. “Now’s a good time to be back because what’s been happening here is incredible. What’s happening in Bonifacio now, Rockwell taking off in the last 10 years and becoming like a second city to Makati…I think the Philippines has reached that point where it’s now going to just take off and become a really seriously considered economy in Asia,” he ends.

IBM cites edge in analyzing data explosion in global market

The world of “big data” is on fire.

According to innovation leader IBM, 90 percent of the data in the world today has been created in the last two years alone. Every day, 2.5 quintillion bytes worth of data is produced, driven by the increasing volume of information captured by today’s enterprises, the rise of multimedia, social media and the Internet of Things.

With the explosion of this so-called big data in our midst, the ability to analyze these large data sets will become a key basis for competition among enterprises. This phenomenon, says IBM Philippines President and Country General Mariels Almeda Winhoffer, is also paving the way towards the “third wave” of computing.

“What’s happening in the marketplace today is that we are shifting toward cognitive computing. First, it was all about tabulation—very simplistic. You input too many numbers, calculate, tabulate, and you get an answer. Then the next generation was all around ‘programmable’—the ERPs of the world, supply chain optimization systems, etc. And now we’re shifting into this new world of cognitive computing, which basically means being able to predict different possibilities,” she explains, adding that it’s a direction not only IT companies like IBM are heading into, but “it’s the kind of transformation that every enterprise will have to go through in order to remain ‘essential’,” she adds.

A Whole New World Of Analytics
The shift into cognitive computing, says Winhoffer, has the power to really revolutionize not only the processes of enterprises, but transform entire industries as well. “Telcos, for example, will no longer look like telcos—they can be something else; they might be a bank. The use of data and analytics will make these things happen,” she shares.

With all the technologies it has developed in its 101 years of existence, Winhoffer shares that IBM’s purpose has always been in a very different dimension—to enhance the lives of people and the work that they do each day. “One of the very distinct developments that took us years to do is this whole new world of analytics. The evolution of this product—particularly this ‘human computer’ called Watson; it’s becoming commercialized now in a way that it’s being applied to a very distinct set of problems,” she shares.

Watson, named after IBM founder Thomas J. Watson, is a computing system that rivals a man’s ability to answer questions posed in natural language with speed, accuracy and confidence. “What’s unique about Watson is that it doesn’t give you the answer—it gives you probabilities of what it may become,” Winhoffer explains. She adds that recently, through IBM’s partnership with WellPoint, Inc., Watson is being applied in the area of healthcare, particularly as an “interactive care insight for oncology.”

How Watson is applied in this particular field is that it stands as an “adviser” to doctors. “It doesn’t give you the answer; instead, it gives you the opportunity to make better decisions. If you think about a treatment today where you have all these tests, what Watson does is it captures all the data that’s inherent about a potential ailment, and then it provides you with probabilities. What it essentially does in the cause of healthcare is to provide doctors with the ability to diagnose the right disease, such that cure of the patient is magnified,” shares Winhoffer.

A second application, she adds, is administrative. “Before Watson was applied, WellPoint had to go through 37,000 sections to help diagnose a disease, but this application allows them to simplify the process and give them the right treatment. It becomes an interactive care guide, as well as interactive care reviewer. It acts like an adviser to provide doctors additional help and support. It will not replace the doctor, but will sort of be like a second opinion,” she says.

A Smarter Philippines
In a media roundtable discussion held last February 14, Winhoffer reveals that 2013 will be all about “operationalizing” IBM’s Smarter Planet campaign in the country. Launched in 2008, Smarter Planet is a corporate initiative that seeks to highlight how forward-thinking leaders in business, government and civil society are capturing the potential of smarter systems to achieve economic growth, efficiency, sustainable development and societal progress.

“Smarter Planet is currently being embraced by industries, cities and countries around the world because it makes good sense not only for business, but in order to transform lives and processes. It’s at the foundation of what we’re going to continue doing in this country,” she says, adding that IBM’s initiative is actually aligned with the country’s national economic growth agenda. “We’re really delighted that we have a very innovative President and administration, and that they’re embracing what the Smarter Planet agenda can do for the country, thus the launch of Smarter Philippines.”

With the huge role the business process outsourcing (BPO) sector plays in the Philippines’ current economic renaissance, and IBM being a very big player in said sector, Winhoffer asserts that positioning the Philippines as a global center for smarter analytics will further drive economic growth. “Going back to this whole world of being essential, and the fact that our operations here is extremely essential to our global customers, we cannot just sustain that by being in the world of BPO. We do handle supply chain, HR, finance and accounting, even core processes—but what’s next? We really believe that it’s in analytics,” she shares.

Given all the important information IBM gleans from its global-brand clients, “the power of analytics comes in because, with it, we’ll be able to offer higher value services that are more insightful for key industries,” Winhoffer shares. In the area of Customer Relations Management, for example, “through analytics, we’ll be able to provide better service. Before customers even call about a problem, the agents already know who the customer is and what problem they’re faced with. Analytics is very powerful and we believe that the Philippines is very well positioned to take the leadership role in this space. It’s a very big market—it’s predicted to be a $160 billion market by 2015,” she adds.

In order for the Philippines to capture this share of the market, however, there is a need to create a very different set of skills. As part of its strategy to make the Philippines the global center for analytics, IBM is in talks with the Commission on Higher Education (CHED) to develop a specialization track for Business Analytics. “This will open the way for higher educational institutions to offer Analytics elective courses,” shares Jay Sabido, R&D executive, IBM Philippines. According to Sabido, there’s a whole slew of different skills needed when talking about analytics. “It covers data management, data warehousing—because in the world of big data, there’s this whole wealth of information that you can mine from. Organizing and structuring this data is a lot of work. There’s also a need for data scientists…how to find connections with all these data. And then even higher-level skills—developing the algorithms to put the intelligence in the platform so it’s a whole wealth of skills. Our effort with CHED on the specialization track is just the beginning—there are definitely still a lot of htings we can leverage on as we expand this,” he ends.

 

Published March 13, 2013 in the Business section of the Manila Bulletin

Haute Couture Comes To The Tea Cup

With its collection of over 1,000 different single estate harvests and exclusive tea blends from every tea producing country in the world, gourmet tea brand 1837 TWG Tea is taking the country by storm—one luxurious cuppa at a time

 

For the longest time, tea has lost out to coffee as the Philippines’ beverage of choice, confined to barely noticeable spaces on supermarket shelves or to inconspicuous containers in health stores. Even when diehard coffee drinkers turn to tea to treat ailing throats, they generally return to coffee the moment the soreness is gone.

Recent times, however, have seen tea gain back that bit of “sparkle”. With more places now offering high tea sets and buffets, and this on top of the growing milk tea craze, it’s safe to say that tea is finally shrugging off its second-class status and is developing a growing number of followers.

Blending Luxury With Tea
With Europe and the U.S. slowly treading the path toward recovery from the global economic crisis, more and more luxury brands are taking their business to Asia. “Big brands like fashion houses Chanel and Louis Vuitton are expanding into Asia because this side of the world is where the market for luxury is right now,” shares Louise Benzrihem, senior PR manager for luxury tea brand 1837 TWG Tea.

Benzrihem adds that the same scenario applies to the gourmet tea market. Today’s tea lovers are no longer content with indifferent mass-market products packed in skimpy tea bags and have graduated to higher-quality tea bags, choice loose tea, and even costly, carefully plucked leaves from single estates. Tea companies like TWG Tea are responding to the demand by offering different tea varieties, single estate harvests and exclusive tea blends.

“It’s actually a unique concept to bring luxury gourmet tea to Asia, which is where the bulk of tea-producing countries are located,” shares TWG Founding Partner Maranda Barnes, “because selling tea to the Chinese, for example, is like selling water. It’s a challenge to say, ‘listen, come and sit down and experience gourmet tea.’”

But making tea a luxury when it has become commonplace was exactly what the Singapore-based brand set out to do. With names like Silver Moon, Emerald River, Japanese Green Tea Samurai and Ethnic Jewel, the teas reflect a wide range of exotic flavors, attracting an almost religious following among tea lovers. “We wanted to bring a product that was very democratic to a luxury positioning, elevating it to that level. It’s why we had to be big, why we had to go strongly into the market, and it’s also why we’re opening solidly in the Philippines,” Barnes says.

Last January, the company launched its second and largest TWG Tea Salon and Boutique in the Philippines at the Newport Mall in Resorts world Manila. “Today, it’s actually the biggest TWG store in Asia and the world,” informs Barnes, adding that when they opened their first store in Greenbelt last year, the Philippine market took them by surprise. “We were absolutely blown away by the interest, the excitement and the curiosity of the customers,” she shares.

Not The Starbucks Of Tea
While the intention is to solidly grow four to six stores in 2013, Barnes clarifies that they are not becoming “a very mass, find-us-on-every-corner type of shop,” as the quality of the tea the company offers, like its limited edition White Tea collection, is not always available in bulk.

“They’re not the types of tea you can source tons in a year. That’s not possible because of the quality. So we do cherry pick our locations, and we have different quantities of tea available for each different store. We do have limited harvest products, and there might be a time when there’s just two or three kilos of a certain tea that comes in for the spring or fall,” Barnes says.

Even when these limited edition teas tend to be exorbitantly priced, TWG Tea has proven that they have successfully carved a niche in the market. “We had a special Japanese green tea launched in the U.K. last year that sold at 9,000 pounds for 50 grams. That type of tea has never left Japan ever in history, and we were able to bring one kilo of that tea out of Japan. In three months, it was all gone. There’s an interest for it, because there’s a market of people who want to try the most expensive, most exotic limited edition products,” shares Barnes.

It isn’t TWG Tea’s intention, however, to market itself as an exclusive brand that’s accessible only to an elite group of connoisseurs. “We want to be the very opposite of snobby, but at the same time we want every visit to our store to be a unique experience. Maybe that’s why we’re in the luxury malls—we want it to be a place, a destination that you come to because it’s an experience you want to remember,” Barnes shares.

At the end of the day, Barnes says that TWG is an “accessible luxury.” It’s not just for one particular market, because there is something for everyone. “What we really want to do is to also help people understand the depth of the brand, the product we are serving,” she says. “In the wine industry, there’s a very big conglomerate that comes together to educate people about wine. In the tea industry, however, it’s still a very closed market.”

According to Barnes, one needs a key to unlock the door to tea plantations, as they only work with a few people and companies in the world. “They don’t market themselves, they just do what they do, and they work very well with people. Our president, Taha Bouqdib, knows them all personally, and he tells them what type of tea he wants, what harvest, what quality and quantity…and that’s exactly what we want to initiate our market to about tea,” Barnes says, adding that this is also why, apart from its over 800 varieties of exotic tea blends, TWG Tea also features a wide range of tea-related products in its stores.

“We have different types of products in different types of packaging, different types of service, we’ve introduce tea into gastronomy…we want people to appreciate the depth and the feel of what tea can do as a beverage and as a luxury product…that there’s this great tradition around it,” she says.

Published February 25, 2011 in the Business Agenda section of Manila Bulletin