Data & analytics is still not a priority for most businesses in Nigeria

KPMG has analysed the usage of data & analytics in Nigeria’s business environment, revealing that businesses are yet to grasp the true potential that data can bring to decision-making. More than half of the businesses in the country prefer to base their decisions off intuition.

The Big Four accounting and advisory firm’s report is based on a survey with more than 100 businesses in Nigeria, spanning the public and private sectors. More specifically, businesses surveyed hail from financial services, consumer markets, energy and natural resources, all of which occupy central positions in the Nigerian economy.

The business environment in the is gearing up for growth while riding the wave of digitalisation, looking to stay atop the economic environment of West Africa and Africa as a whole. According to KPMG, maturity in the data analytics department is crucial for business development in the near future.

In its report, the firm highlights four use cases of data analytics, which could have a significant impact in various departments. The first use case is Fraud Analytics, which entails the use of data to prevent and detect fraudulent activity. This use case requires an advanced level of analytical capabilities, given the accuracy required. 

The second use case is that of human resources (HR) in the ‘Analytics Age.’ According to KPMG, applied analytics can determine the link between specific HR policy and overall business performance, allowing business leaders to better align their strategies with HR programmes.

KPMG’s third uses case is the application of artificial intelligence to simplify and improve finance functions across organisations, providing room to scale back on wasteful expenditure. The firm places the burden of implementing this change on the Chief Financial Officer (CFO).

Lastly, KPMG posits that analytics are crucial to build trust amongst customers, given that they enable reliability of operations. Analytics also create the possibility of predicting consumer expectations, and generate customised service models that match the needs of individual customers.

However, businesses in Nigeria appear to be lagging behind when it comes to adopting analytics. The firm reports that 56% of the businesses surveyed prefer to base their decisions on intuition rather than analytics, while only 40% of organisations are likely to invest in artificial intelligence for enhanced operations.

KPMG also found that very few firms in Nigeria have a dedicated Chief Data Officer, with most firms delegating their data responsibilities to the CFO. Of those who do have a Chief Data Officer, a dismal 16% have a clearly defined portfolio of responsibilities associated with the role.

It is not surprising, therefore, that investment in developing data & analytics capabilities is likely to average at less than N50 million annually. On the other hand, there are a number of organisations within Nigeria that are looking to become internationally competitive, and are investing heavily in digital capabilities. 

Most of those investing over the next year and a half are likely to use data & analytics to improve their sales, while others will use it to optimise their product development and to generate targeted marketing campaigns. Other popular usage includes managing business risks through analytics, and getting an overview of social media sentiment.