Philippine businesses eager to adopt artificial intelligence should first focus on digitizing their operations and integrating their business systems, according to global software firm Zoho, warning that AI is only as effective as the quality of data behind it.

Speaking during a media briefing in Manila, Gibu Mathew, managing director of Zoho Asia-Pacific, said many small and medium-sized enterprises (SMEs) risk investing in AI without first building the digital infrastructure needed to support it.

"The first thing you will need as a small business is more levels of digitization," Mathew said. "Choose the right tools that integrate well and help you integrate across functions within your organization."

Mathew said businesses should prioritize software that connects departments such as sales, marketing, finance and customer support before introducing AI into workflows.

His remarks come as the Philippine government accelerates its digital transformation agenda, with the Department of Information and Communications Technology targeting a digital economy equivalent to 12 percent of gross domestic product while promoting AI adoption among micro, small and medium enterprises.

According to Zoho, fragmented technology remains one of the biggest barriers to meaningful AI deployment.

According to the company's State of Workforce Password Security 2026 report, 64 percent of Asia-Pacific organizations operate more than 15 business applications, yet 73 percent lack complete visibility over workforce identity and access, creating operational inefficiencies and cybersecurity risks.

He said those fragmented systems also limit AI's effectiveness.

"AI is only as good as the quality of information," Mathew said. "Garbage in, garbage out."

Rather than treating AI as a standalone product, Zoho has integrated artificial intelligence directly into its suite of more than 60 business applications, allowing users to generate content, summarize documents, automate customer support and perform other tasks without leaving the software they already use.

"The hardest part is that businesses may find the budget to buy the tools, but then employees don't use the tools," Mathew said.

To address that challenge, Zoho embeds AI features within existing workflows instead of requiring employees to learn separate applications.

For example, users creating social media content through Zoho's marketing platform can generate images and rewrite text inside the application, while expense management software automatically categorizes receipts and flags policy violations using AI running in the background.

"We don't even call it AI," Mathew said. "We bring that intelligence contextually inside our products."

Zoho also unveiled new agentic AI capabilities through Zia Agents, autonomous digital assistants designed to perform specialized business tasks such as customer support, sales coaching, IT help desk operations and human resources functions.

Businesses can deploy pre-built agents or create their own using Zia Agent Studio, a low-code platform that enables organizations to develop AI agents without extensive programming knowledge.

The company said the platform supports third-party large language models such as ChatGPT, Claude and Gemini while also offering its own proprietary Zia LLM, allowing customers to choose models based on complexity, performance and cost.

Mathew said selecting the appropriate AI model for each task helps businesses avoid unnecessary expenses.

"You don't need the best model for all your work," he said. "If you use the latest and greatest models for simple tasks like spellcheck, you're wasting those credits."

Zoho reported that its Philippine revenue grew 21 percent in 2025, making the country one of its top three markets in the Asia-Pacific region. The company now serves more than 150 million users globally and has surpassed one million paying business customers worldwide. It also confirmed that it is preparing to establish a Philippine office, although Mathew declined to provide a timeline.

Founded in 1996, Zoho remains privately held and says it does not monetize customer data through advertising. The company said customer information is not used to train generic AI models, with its proprietary AI hosted within Zoho-operated data centers.