08.03.2022

What’s Brewing On The Aboitiz Innovation Front?

In 2021, the Aboitiz Innovation Working Group (IWG) was formed as part of the Aboitiz Group’s focus on improving innovation maturity across its businesses. The team immediately went to work on developing the Innovation Maturity Framework to assess, analyze, and recommend areas of improvement to advance the innovation agenda. Along with this came a series of innovation milestones delivered by Aboitiz business units throughout the year. Here is a rundown of the major highlights and a sneak peek at what’s over the horizon in 2022.

AEV

In the effort to improve AEV’s service delivery to its stakeholders, most of the CSUs aligned their initiatives with the Remix program which aims to improve the employee experience by equipping and enabling them with the right mindset and tools. Here are some innovation initiatives of AEV in 2021.

In support of the Remix and Reverse Mentoring programs in 2021, AEV worked to promote and maximize the use of  already existing tools while improving productivity through the automation of processes like reports generation and converting them into data visualization formats or dashboards. The dashboards were mostly created as hands-on projects of the mentee participants from the various CSUs and BUs.

Automation was a big component for Innovation too in 2021. After investing a number of learning sessions back in 2020, AEV saw different CSUs championing and using robotic process automation (RPA) on their own business processes come 2021.

Meanwhile, the Aboitiz Enterprise Architecture (EA) Program culminated its 3-phase approach with the kick off of the EA Governance Project in October 2021. In hindsight, the EA Program, through guidance and direction coming from the Aboitiz IT Committee, started in October 2020 with AEV and AboitizPower undergoing Phase 1. This phase identified the “what” or the desired business outcomes which we now represent as the Business Capability Model (BCM) . Shortly thereafter, Phase 2 kicked in to develop the “how”, resulting in the creation of the Technology Roadmap in support of the Digital Strategy of the enterprise.

With Phase 3, AEV is developing the needed governance to ensure that, through the EA practice, what the business wants to achieve is also what drives the development, acquisition, and implementation of solutions.

The Security Operations team, in coordination with AEV-IT, approached automation as a big component for Innovation, particularly through learning sessions they delivered back in 2020. With different CSUs championing and using RPA on their own business processes in 2021, IT Security created a one-stop informative dashboard for all date related to IT Security Operations Center (SOC) for the publication of the Executive and Management Reports on External Threats and SOC Reports with the ability to drill down SOC reports to the BU level.

For AEV’s Cyber and Information Security (CISO) team, a key deliverable is issuing relevant and timely external security alerts and advisories. It’s a process that, primarily, requires several manhours—4 hours per day at the minimum—to manually scan and review various online sources.One of the IT Security team’s key REMIX initiatives was a bot that responds to and refers inquiries to the relevant documents to support the information awareness campaigns and accessibility to related materials.

Lastly, there is also the SecSee Badge that recognizes team member efforts to increase awareness of and improve on the organization’s cyber and information security practices.

As part of the effort to improve the innovation maturity of AEV, Innovation Program is set to launch in order to enable our team members instill the innovation mindset by giving them the opportunities to be creative and thereby uncover innovation opportunities within their teams.

AboitizPower

Innovation took center stage in AboitizPower’s strategic agenda as evidenced by its efforts to increase value creation through Open Innovation and Digital Transformation.

DigitaLeap is a flagship program that presents a holistic view of the goal of future-proofing operations, enabling people with the digital dexterity and culture, and providing customers with a unique experience and value-added offerings in this digital day and age. AboitizPower aims to be the Philippines’ industry leader in defining and implementing the digital power plant of the future, the new digital workplace, and digitally empowered customers.

Digitization of assets, the heart of its operations, is the core agenda. Being the largest generation company, AboitizPower seeks to ensure that all facilities adopt the latest technologies to deliver maximum value in terms of plant availability and operating efficiency — regardless of size, capacity, age and location. This combines with enablement and upskilling plans for team members and various programs that promote digital culture or creating an environment that encourages ownership and acceptance of the digital processes.

On the Open Innovation front, AboitizPower has established ties with key partners to create a global innovation ecosystem that allowed extended education, innovation culture building, and greater access to experimentation. This helps to sustain efforts to break ground in developing technologies and adjacencies within the very challenging energy transition landscape. Open Innovation is also a gateway to working with digital and energy startups, partnering with AboitizPower’s important stakeholders, and efficiently moving into the future.

Here are some more of the AboitizPower’s innovation highlights for 2021:

  • Innovation DNA. Launched during 1AP’s Innovation Summit, it is a unique fundamental set of characteristics the company seeks to collectively develop within each team member while also being the corporate DNA that symbolizes the organzation’s unique personality characterized nu innovation values, ethics, behaviors, and beliefs.
  • Open Innovation. Embarked on Open Innovation through partnerships to inject external innovation insights and practices into the AboitizPower ecosystem.
  • Common Innovation Platform (S.P.A.R.K.). Supporting continuous improvement in the open innovation process, SPARK’s pilot roll out within the Oil BU and AboitizPower Corporate creates a more effective way of capturing ideas and measuring their transformation into actual projects while breaking innovation silos among BUs and encouraging free collaboration between departments.
  • DigitaLeap Citizen. RPA Bootcamp is the pilot program to democratize digital capabilities within non-IT team members, paving the way for the establishment of 1AP’s first Community of Practice (CoP) starting off with RPA. To date, there are 25 participants in the boot camp with an estimate of at least 25 RPA use cases that will be deployed in June 2022.
  • Data and AI. Established Data Science and AI cookbook containing use cases to contextualize the potential value areas for AI in AboitizPower. In total, 52 use cases across the company and supporting functions viewed as potential value areas where artificial intelligence can have an impact in the business.
  • Disruption. Critical topics related to the global energy transition became regular workstreams of team members with the objective of doing innovation research, business modeling, experimenting to bridge technologies and continuously challenging the status quo. Some of these key topics are hydrogen as power, disruptive energy storage, decentralized energy systems, and EV/EV infrastructure.

UnionBank

With its continued launch of innovative products and solutions in 2021, the Bank’s digital transformation strategy pulls out all stops to deliver superior banking experiences to customers and these are some examples:

  • Continuous enhancement of digital channels with new features such as Insurance Marketplace, InstaPay 2.0 that allows fund transfers via mobile number and email, and cash-in via Western Union outlets
  • MSME Business Banking App for MSME’s digital banking needs; feature launched UPay that lets MSMEs collect payments through various channels such as bank transfers via InstaPay, GrabPay, GCash, and over-the-counter payouts (Bayad Center, Cebuana Lhuillier, ECPay partner outlets, and Palawan Express)
  • Over 100 branches redesigned into Arks, equipped with digital transaction portals and self-service machines for straight-through and paperless transactions; this brings the total Arks to 150 out of the current 198 branches`
  • Tailor-fitting digital solutions for clients and their own communities further pushed Tech Up Pilipinas aspirations to new heights: Partnership with Supreme Court of the Philippines for the Judiciary ePayment Solution, giving courts the option to receive fees and payments digitally anytime and anywhere; enabling LGUs of Valenzuela City and Navotas City with capabilities allowing for digital collection of taxes and business fees; providing EON digital wallets and a multipurpose card for cash assistance disbursement for the people of Narvacan, Ilocos Sur, Parañaque, and Imus City
  • Kicking off Cloud Migration in a bid to be the first major Philippine bank to be fully cloud-hosted that further modernizes the Bank’s IT infrastructure, which can reduce capital expenditures, drive operational efficiencies, and facilitate faster innovation of services; to-date, the Bank has over 100 solutions delivery workloads now running on the cloud
  • Innovations in sustainable financing via its first social bond in partnership with the International Finance Corporation and aims to finance loans to micro-, small, and medium-sized enterprises (MSMEs) and support their recovery from COVID-19; also noted as only the second social bond of its kind in the Philippines
  • Following Typhoon Odette, as most banks were down, UnionBank came up with innovative ways to continue servicing affected customers, i.e. powering our ATMs using wireless internet connection and dispatching Branch-on-Wheels to Cebu to support the large transaction needs of affected customers
  • CitySavings innovates to improve banking experience for its mass market customers with the pilot launch of the reloan functionality in its Loan Ranger Mobile app, enabling teacher borrowers to quickly and conveniently apply for a reloan without going to the branch
  • UBX remained at the forefront of emerging technologies such as blockchain and cryptocurrencies in 2021, partnering with Cardano to launch their own stake pool that allows holders to delegate their stakes in Cardano’s cryptocurrency, ADA, and earn rewards for securing the Cardano blockchain — an important milestone in the Bank’s continuous drive to increase awareness on the relevance and benefits of blockchain
  • Utilized data modeling and natural language processing for consumer banking, operational efficiency, and risk management, which has increased bancassurance bookings and credit card sales conversion rates, decreased collection efforts and operational costs, and higher fraud detection rates
  • Enhanced, AI-powered alternative credit scoring and risk models to increase financial inclusion and improve risk management by making it possible to offer loans and credit to a broader range of individuals and small businesses who may have not qualified under traditional scoring methods, an initiative that effectively doubled the Bank’s loan approval rate
  • Collaborations with the academe to reduce discrimination and strengthen financial inclusion with AI resulted in a peer-reviewed publication accepted for a scientific journal

The trait and value of innovation is ingrained in UnionBank’s DNA. For 2022 in particular, some of the Bank’s key focus areas are:

  • Continuous enhancement of digital channels namely UnionBank Online App for retail, The Portal platform for corporates, and MSME Business Banking App for MSMEs; more features shall be launched including hyper-personalized offers in our UnionBank Online App, enabled by data science and AI
  • Ramp up deployment of data science and AI solutions across all products and services to increase customer engagement and improve customer lifetime value
  • 100% migration of our mission-applications to the cloud for the Bank to immediately reap the benefits from this cloud transformation
  • Implementation of DevSecOps on key projects of the Bank, which aims to accelerate/automate the development, testing, and deployment process of new launches/releases on our various digital channels
  • Partnering with international universities for R&D, innovation, and capacity building on various DSAI focus areas
  • Tap cross-industry opportunities across Aboitiz Group

PERA HUB

In 2021, PERA HUB, the retail brand of PETNET, launched the digital remittance partnership with UnionBank and Western Union (WU) to give UnionBank customers the option to receive WU money transfers through the UnionBank Online app, with UnionBank becoming the first universal bank in the Philippines to offer inbound money service in this platform.

With further digital expansion in mind, the company launched the PERA HUB Digital Remittance Platform in partnership with Brankas, a leading technology provider, to grow the number of digital agents servicing their respective communities. As Southeast Asia’s fist API developer digital remittance platform, it also paves the way for the next generation of fintech solutions.

PERA HUB also set out to improve processes with the Salesforce service cloud for its Customer Service and IT Helpdesk, which enables teams to efficiently track service tickets, assess SLA success, and discover ways to further improve. Additionally, customers now have additional options to receive assistance through the new PIA Chatbot and PERA HUB website.

Continued digitization efforts across PERA HUB’s overall processes, products, and services in 2022 will coincide with broad offerings in the remittance space and onboarding more remittance partners and payment merchants.

PETNET will focus on three pillars to support its IT strategies in the next five years: 1. building digital platform and channels; 2. optimizing backroom processes; and 3. developing customer centricity in all its products and services. These pillars will be reinforced by a sound information and cybersecurity strategy, anchored on risk management. Supporting these pillars is also its strategy on organizational development wherein people enablement, career advancement, and succession planning will be the main focus.

One of the big projects for 2022 is the development and implementation of the group’s data lake in collaboration with Aboitiz Data Innovation. This will be the cornerstone of PETNET’s Customer Engagement Program that aims to drive customer acquisition and retention.

In the backroom, the company intends to explore the use of RPA as a means to speed up the automation of key processes. Likewise, plans are laid out to simplify transaction processing in its branches and sub-agent locations by introducing a “stage and go” process using its mobile app or a tablet.

Pilmico

The past few years at Food Group Philippines have been marked with a very active Innovation Program. In 2021, the company expanded this across One Food Group (1FG) countries (China, Malaysia/Brunei, Indonesia, Sri Lanka, Thailand, and Vietnam) and introduced five (5) Innovation Channels, namely: Process, Product, Digital & AI, Disruptive, and Open Innovation. Moreover, several innovation projects were shared with 1FG through idea sharing during its AHAgile Pitch Con Sessions. Here are some key milestones:

  • Initiated 1,162 innovation ideas across 1FG, 633 of which are already implemented while the rest are to be implemented from 2022 onwards. A big chunk of the innovation ideas come from Process Innovation driving small incremental and big improvements and impact to business.
  • Several Product Innovation ideas include FG PH’s development and launch of complete line of rabbit feed to support efficient rabbit meat production, which is gaining significant following among rabbit farmers. FG China pioneered a new pigeon feed to cater to the need of pigeon farmers resulting in the increase of volume and sales. This also led other companies to follow through with more product innovation.
  • Sharing nutrition expertise within 1FG led to the use of alternative raw materials, which helped manage cost and maintain excellent production performance and quality of products. An example is FG PH using barley as alternative raw material and FG Indonesia using locally sourced by-products as an alternative energy source, two Product Innovation initiatives that generated significant savings impact.
  • FG PH Flour group refined plans and strategies to pursue opportunities in its identified growth areas, defined its vision to be “a driver for growth through Innovative Products” with a mission to “develop and launch a variety of new products and packaging formats that fulfill current and new customers’ needs guided by customer insights and research”, and jump started its flour development process; Product Innovation for Meats mainly focused on developing new product offerings to be sold via eCommerce
  • Digital & AI Innovation improved the company’s business processes with the use of data science and analytics, along with several automations and digitization of processes
  • Kickstarted Disruptive Innovation as 1FG embraced the disruptive mindset to spot areas of disruption in the food industry; identified focus topics for unlocking synergies with existing businesses and creating new growth opportunities

For 2022 and beyond, 1FG envisions a significantly stronger innovation culture and mindset to achieve pervasive innovation maturity. It will continuously initiate innovation ideas, push for higher implementation rate, and 1FG-wide replication of applicable projects. Likewise, its efforts seek to increase innovation ideas initiated in other channels, looking forward to the following:

  • For Product Innovation in Feeds: forming the Research and Technology Department within 1FG to establish the 1FG nutrition system to optimize value of available feed raw materials across the Food Group; strengthen Research and Development footprint from 2022 onwards
  • For Flour Product Innovation: 2022 will be a year to fast track what has been started in 2021, guided by the NPDI (New Product Development and Introduction) principles with the aim to build and maintain a balanced pipeline of new ideas to ensure continuous growth
  • For Disruptive Innovation: continue developing identified focus areas and moving forward with pilot and trials towards commercial execution; share the discipline of disruptive thinking and implement a process to capture more disruptive ideas, involving the entire 1FG organization
  • Capitalize more on Open Innovation, partnering with external entities to help with resources and skills in implementing strategic innovation that will sustain the business for the long term

Aboitiz InfraCap

Aboitiz InfraCapital (AIC) completed the design of its digital roadmap as part of its digital transformation journey covering the next few years and supports its long-term strategy. AIC also rolled out InnoBox, a platform that empowers team members to send suggestions and ideas on improvements to company practices and project ideas, as well as participate in their implementation. Through InnoBox it was able to launch InfraHub, a one-stop-shop team member microsite, and Project Ayuda, which gives team members clear guidelines on their benefits and availment process. In addition, the HR and Admin Team introduced 360 Degree Feedback via the MyTX platform to foster holistic performance appraisals, as well as the Amber chatbot to monitor engagement. HRAD also significantly improved our benefits and compensation services with the launch of FlexBen and the new payroll and timekeeping systems.

LIMA Water Corporation, a subsidiary of AIC, completed its pilot automation program resulting in savings in repair and maintenance expenses of 30%, reduced fuel consumption by 20%, and maintain a high average facility uptime of 99.6%, laying the foundation for a Smart Water Network. (READ MORE ON THIS)

AIC will continue its digital transformation journey through the implementation of the components of its digital roadmap in 2022 and beyond. In 2022, LWC will implement the next phase of its automation project, integrating the system with the rest of LWC’s water facilities including enhanced capabilities. AIC will also continue with its InnoBox program to help launch more team member-led solutions. The Economic Estates will likewise complete its smart transformation roadmap, and implement the first few initiatives this 2022.

Republic Cement

At the end of 2020, Republic Cement completed laying out its first 3-year Digital Transformation Roadmap aptly called BeNXT, with the dream of being the next digitally transformed company. Through this project, teams aligned on how to position Republic Cement into a customer-centric, digitally transformed organization; thus coming up with the vision of “Propelling Republic Cement for the Digital World by being the best managed company with optimized data and processes, delivering value to our stakeholders sustainably”. In 2021, Republic Cement realized the first leg of its Digital Transformation Roadmap through the completion of Customer Experience and Data Science pilot projects.

Republic 360, our Customer Portal and Truck Mgt System, provides a simple and accessible solution to customers enabling self-service functions including online enrollment, ordering, delivery tracking, billing, invoicing and payment. With 360, there is timely action and available information shared to the entire Order to Cash chain, therefore allowing customers to be served faster.

Predictive cement strength powered by artificial intelligence optimizes raw material concentration resulting in better resource management and increased operational efficiency. [READ MORE ON THIS]

Also, the company has set up the foundation for seamless inventory integration through master data governance, more sensor equipment and process automation.

For 2022, Republic Cement sees better integration between IT and OT in moving forward with its a roadmap for implementing Industry 4.0 concepts. Enterprise Architecture will be key to ensuring that systems are fit to deliver the company’s transformation plans and serve as a compass for investment prioritization. It will mine the top innovation ideas and bring these to life, focusing on process efficiency and data-driven decision making.

AboitizLand

With its success in pioneering contactless homebuying service, AboitizLand leverages technology to provide vecinos an enjoyable homebuying experience—from property search, to virtual site visits, online reservation and payments, digitized customer services, and all the way to virtual turnovers.

The company strengthened its position as an innovation-forward property developer by investing in a proprietary mobile application called AboitizLand Vecino app, the backbone of its digital homebuying service that is more efficient and more convenient. Vecinos are now able to track monthly payments and download statement of accounts (SOAs) and receipts in a more timely manner, monthly payments may be settled using credit or debit cards, housing loan applications can be made through the app, scheduling of acceptance and turnovers, as well as reaching out to the Customer Service Team.

AboitizLand has also invested in innovating its design and construction management systems:

  • 3D modelling helps in better decision-making, upfronting costs, producing better designs and better quality houses, optimizing overall costs, change management, and improving work productivity
  • With a new system called Project NOAH, AboitizLand taps into digital solutions for procurement, inventory management, and construction; it is also designed to directly address all  operational constraints that plague construction management and causing delays in construction

AboitizLand ventured into strategic alliances with innovative companies to streamline back-end operations and provide clients with more flexible options.

  • Nook, the Philippines’ first mortgage broker, offers a fully digital platform, which helps aspiring homebuyers get matched with the right home loan programs in minutes, at no extra cost
  • Partnering with Connovate for the supply of renowned Danish precast technology that uses high-strength concrete for sandwich panels that are more durable, slim, and compact, and has premium thermal insulation that makes the panels fire and earthquake-resistant.

Accelerated improvements in 2021, as they gain traction through 2022, will position AboitizLand for exponential transformation in 2023 and beyond. The company will continue to harvest the results of its digitization strategy and leverage the Aboitiz Group’s expertise in data science and artificial intelligence. Parallel to the development of existing innovation programs will be efforts in innovation culture building that involves team members at the grassroots under the Remix Innovation program. To ensure greater chances of success, Remix and innovation goals have been integrated into the performance management system and a council was established to lead its execution within the organization as well as its rewards and recognition program that will encourage enthusiastic participation across the company.

Aboitiz Construction

Aboitiz Construction started to implement its Big Shift Strategy, which targets the improvement for financial performance, process enhancement and people development. In line with this, its Big Shift Innovation Portal was launched to serve as a depository site that captures team members’ innovation ideas both implemented or still to be implemented. The Big Shift Strategy gained success in its first year following multiple improvements that were initiated by management as well as a steady stream of process innovation and system improvements from team members. Trained as Idea Engineers, these team members lead or participate in ‘Just do It’, Improvement or Breakthrough projects.

For 2022, ACI looks into drawing up more improvements from our existing processes and more automations. This includes introducing simple digitization to project sites like taking advantage of the functions that are available in the current digital apps that we have. And looking forward to more collaborations with Aboitiz Data Innovation as this will surely bring us a lot of knowledge on how to implement our projects more efficiently.

Aboitiz Data Innovation

The Aboitiz Group launched Aboitiz Data Innovation (ADI), its data science and artificial intelligence (DSAI) arm in April 2021. ADI consolidates DSAI efforts across the Group. By working with the different business units by operationalizing DSAI to tackle real-world challenges, it has made the Group see the value in having this disruptive technology as part of its arsenal. ADI has been able to facilitate greater collaboration across the Group in new ways. Several new models across the Group were implemented which advanced a number of the Group’s business, sustainability, and ESG goals:

Power

  • Machine learning model

Banking and Financial Services

  • Bancassurance cross-sell model
  • Credit card propensity model
  • Next best offer models
  • Mortgage collection model
  • Alternative credit scoring model

Infrastructure

  • 28-day predictive strength model

Land

  • Predictive model – construction delays
  • Improved customer profiling system

For 2022 and beyond, ADI’s focus will be to enable and accelerate the Group’s transformation by operationalizing DSAI to continue enhancing its abilities to be data-driven, agile, and operationally efficient. By creating opportunities through its data and AI projects, ADI is creating a sense of possibility for talent-curious to enter the world of DSAI while building future-ready skills within its internal teams and promoting a data-driven and innovative mindset within the organization. While last year was about breaking ground to demonstrate what is possible and show what can be done when DSAI is operationalized across the business, this year ADI’s focus will be on amplifying its efforts through upskilling of more team members, wider cascade of projects to more BUs, exploration of more models for hyper-personalization across industries and greater collaboration through the upcoming launch of our data exchange platform.

Innovation is rooted in imagination—the ability to see beyond what is, or not, right in front of us. Having an innovative mindset is crucial in creating new opportunities and exploring game-changing solutions to advance businesses and communities.

David Hardoon, Managing Director, ADI

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