Playing catchup

A new report from KPMG highlights how Nigerian businesses have a long way to go in learning how to extract meaningful insights from data, says Oluyomi Akinyemi FCCA

Oluyomi Akinyemi FCCA is an associate director focused on data and analytics at KPMG Nigeria.

The widespread availability of data, alongside increasing sophistication of tools, algorithms and other enablers, has helped to position data and analytics (D&A) capability as a critical resource for enabling decisions in businesses and non-profit enterprises around the world. Yet recent research suggests that in Africa such capability, if it exists at all, is minimal; for example, a recent cross-sector survey by KPMG in Nigeria found that 41% of financial services organisations surveyed plan to invest less than N50m (US$138,000) over the next three years.

Today, the issue is no longer about owning the most data; rather, it is about how to gain the most insight from it

Assessing the Maturity of Data & Analytics Capabilities in Nigeria looked at how Nigerian organisations use data and explored the challenges in building analytics capability. The research revealed that a lack of understanding of the real benefits and opportunities of D&A mitigated against individual businesses and industry groups in building capability (see figures below). This was also validated through engagement with industry leaders and discussions with individuals with responsibility for embedding analytics in their organisations.

More than 160 senior executives rated their organisations’ competitive ability in D&A and identified factors hindering adoption of D&A capabilities in the business ecosystem. While 28% said they were leading in D&A, 63% said they were developing capability, while 9% considered their organisations to be lagging behind within their sector.

The respondents did, however, accept D&A as a new source of competitive advantage, and believed that organisations not yet leveraging the capability will likely be left behind in the fast-changing economy. Perhaps predictably, the financial services sector emerged as one of the fastest adopters, while the telecoms industry is the most advanced in leveraging capabilities.

Intuition or data?

The research revealed that in many organisations critical decisions are still driven by C-level executives who trust their business understanding and years of experience more than insights from data; 56% of organisations claim they come to decisions this way. This suggests that there are still significant opportunities to augment decisions with deeper and more accurate insights.

The survey also explored the organisational structure of analytics practices in organisations, revealing that 37% had no formal structure for their D&A unit. The respondents saw this as an obstacle to leveraging the scarce data science skills available locally. Other structures observed include centralised (27%), enterprise-wide (20%) and embedded within departments (16%).

When the structure of a D&A team is centralised, the organisation’s resources and capabilities are concentrated to support the business units in making decisions, and the decision-making process becomes faster and more efficient. It is also a good option for organisations that are starting small; however, employees from other departments are unable to contribute significantly to the D&A capabilities, which is the primary advantage of a structure embedded in individual departments.

A total of 46% of the organisations reported that they do not have adequately skilled data science professionals. This further underscores the inadequacy of the skills required to drive many organisations to derive more value from their data assets and analytics pursuits. The scarcity of other skills required for D&A pursuits (29% were missing visualisation experts, 27% software engineers, 24% data engineers and 11% business analysts) were less pronounced.

D&A capability offers organisations the opportunity to remain relevant in the competitive landscape. Today, the issue is no longer about owning the most data; rather, it is about how to gain the most insight from it. It is about turning data into insights, and insights into real business advantage. Enterprises that understand and leverage this understanding will lead in the business landscape of tomorrow.