July 31, 2026 l BusinessWorld
There is a familiar pattern in business. Each generation assumes that the way companies do business today will be the norm for years to come. Then a new wave of technology comes along, customer behavior changes, and suddenly businesses that seemed invulnerable can’t keep pace. We have seen this occur again and again in the past few decades. Companies have moved from the age of brick-and-mortar stores to the internet, then to the cloud, and now into the age of artificial intelligence (AI). Each stage has demanded a different way of thinking, not just a new set of tools.
The brick-and-mortar era was about physical presence. Success was in opening more branches, in positioning them at the right locations, and in spending money on buildings, warehouses, and salesmen. Retailers wanted to be on every street corner. Banks measured their reach by how many branches they maintained. Restaurants grew by adding more places to dine. The bigger the physical footprint, the stronger the competitive position.
That was how many Philippine companies grew. Department stores, supermarkets, banks and fast-food chains proliferated across cities and provinces because that was the best way to reach customers. Being a company with no physical presence was often seen as too small or unreliable. Customers expected to visit an office, sign paper documents, and talk to someone face to face.
Then the internet changed the rules.
Companies did not have to be tied to physical locations to get to customers. A small business could sell its products nationwide using a website. Marketing went digital. Customer service moved to e-mail and online chat. Information that once took days to obtain became available within seconds.
Some companies saw the opportunity early. Amazon began as an internet bookshop and ended up as one of the biggest retailers in the world. Netflix changed from mailing DVDs to streaming movies over the internet. Companies which welcomed the internet discovered new markets and lower operating costs. Others waited too long. By the time they realized their customers had changed their habits, faster competitors had already taken their audience.
In the Philippines, the same transformation took place but at a different rate. Businesses started to build websites, online shops and market products through social media. Internet banking was led by banks. Airlines urged passengers to book their flights online. Government agencies gradually digitized selected services. Small entrepreneurs suddenly had access to customers far beyond their local communities.
The next transition was less visible but even more important. The cloud changed how business worked in the back end.
Companies used to spend millions on building private data centers and keeping expensive servers. Each system upgrade brought new hardware and lengthy installation projects. But that model has changed with cloud computing. So now businesses could rent the computing power, storage and software they needed rather than own it all.
The transition led to lower costs, more agility and accelerated innovation for organizations. Now a startup can provide services that only big corporations could have invested in before. Existing companies can grow without continually investing in more infrastructure.
The Philippines also joined this movement. Banks overhauled their core systems. Retailers added online and brick and mortar. It connected plants across multiple sites for manufacturers. Government agencies began moving workloads to cloud platforms. Even schools and universities relied on cloud-based learning systems during the pandemic. Cloud technology quietly became part of everyday life, even if many users never realized it.
Today another transformation is taking place. Artificial intelligence is becoming the next operating model for business.
Unlike previous waves, AI is not simply another technology layer. It changes the way products and services are designed, made and experienced by customers. There is so much more that AI can do than simply automate repetitive tasks. It can analyze data, generate content, predict outcomes, answer questions and even help experts make complicated decisions.
Businesses are starting to rethink whole business processes in light of AI. Microsoft has also incorporated AI assistants into its software products. Adobe enables creatives to generate images and edit content with AI. Salesforce is deploying AI agents to assist sales and customer support teams. These companies are no longer selling software alone. They are selling intelligent capabilities.
Today, Philippine companies are at that stage. Banks deploy AI to fight fraud but also to improve customer service and offer customized financial products. Retailers study people’s buying habits to better suggest what to buy. Hospitals are trying out AI-powered diagnostics and automating administrative roles. The contact center industry is one of the strongest industries in the country. The industry is moving away from traditional voice support to AI-powered customer engagement. AI can do the mundane requests and human agents can do the high value interactions.
The problem is that many organizations are still treating AI the same way they treated earlier technologies. They see it as a software purchase, like any other, not a business transformation. AI tools without process reengineering is like buying new equipment and leaving the same old floor plan. The tech may be new, but the results are still limited.
That’s why leadership is more important than technology. Every major business shift has rewarded companies willing to rethink their business model instead of simply upgrading their equipment. The winners during the internet era were not those with the largest websites. They were those that reimagined how customers bought products. The winners during the cloud era were not those with the biggest data centers. They were those that redesigned operations around speed and flexibility.
The AI era demands the same mindset. Leaders need to ask different questions. Which decisions should AI support? Which customer experiences can become more personal? Which routine work should disappear altogether? Which new products become possible because intelligence is now embedded in every process?
The encouraging news is that Philippine companies do not need to invent the next breakthrough technology to compete globally. What they need is the willingness to evolve faster than before. Large organizations have resources. Smaller companies have agility. Both have opportunities if they move decisively.
Business history tells us that technology never waits for those who prefer certainty. Every era creates new winners and leaves others behind. The companies that survive are rarely the biggest or the oldest. More often, they are the ones that understand that every new era is not merely about adopting better technology. It is about becoming a different kind of company before customers demand it.
***The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX. For comments, email rey.lugtu@hungryworkhorse.com. Photo is from Pinterest.