Why African businesses need to care about data

Are you making the most out of the data you collect? Data is a goldmine for businesses, and using it to your advantage can give you a competitive edge. Africa’s 1.2 billion-person market is poised for transformative growth and data analysis is the catalyst for this. In a survey conducted by McKinsey & Company, 80% of African companies said that they use data and analytics to support their business decisions.

This blog post will discuss:

1. Data Analytics for Business Intelligence
2. Predictive Modelling and Market Research
3. The need for Data-Driven Decision Making
4. The role of Data Management and Governance
5. Machine Learning, AI and Digital Transformation
6. The need for a Data-Driven Culture and Data Utilization
7. Ways to Improve Data Maturity and Innovation in African Businesses

1. Data Analytics for Business Intelligence ⭐

Data analytics is not just a buzzword but is essential in helping businesses gain valuable insights. Africa is a hotbed of entrepreneurial energy and businesses here can make informed decisions using data analytics. The benefits of data analytics include:

• Improved decision-making: By using data analytics, African businesses can make better, more informed decisions based on data-driven insights, rather than relying on gut feelings or intuition.
• Increased efficiency: Data analytics can help African businesses identify inefficiencies in their operations and streamline processes, leading to improved productivity and cost savings.
• Competitive advantage: By leveraging data analytics, African businesses can gain a competitive edge over their competitors by identifying market trends and opportunities, and responding to customer needs more quickly and effectively.
• Better customer understanding: Data analytics can help African businesses gain a deeper understanding of their customers, including their preferences, behaviours, and needs. This can lead to improved customer engagement and loyalty.
• Risk management: Data analytics can help African businesses identify and mitigate risks, such as fraud, supply chain disruptions, and cybersecurity threats.
• Improved marketing: By using data analytics, African businesses can more effectively target their marketing efforts, identifying the most effective channels and messaging to reach their target audience.
• Innovation: Data analytics can enable African businesses to innovate by identifying new market opportunities, developing new products or services, and improving existing offerings based on customer feedback and insights.

According to a report by IDC, the big data and analytics market in Africa is expected to reach $1.5 billion by 2022, with a compound annual growth rate of 14.4%. Tools like Excel, Tableau, QlikView, and Power BI can help with data analytics. Visualizing data is also crucial for better decision-making.

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2. Predictive Modelling and Market Research ⭐

Data is an incredible tool for predictive analysis and market research. Predictive modelling is the process of using data to make predictions based on past data trends. It helps businesses plan their next move by analyzing data and forecasting potential future outcomes.

Market research, on the other hand, is used to understand customer demands, preferences, and habits. It helps businesses tailor their products and services to meet customer needs better. Tools like IBM Watson Analytics, RapidMiner, and Alteryx will come in handy for predictive modelling and market research.

Essentially, predictive modelling and market research can bring several advantages to African businesses, including:

• Better decision-making: Predictive modelling can help African businesses make more informed decisions by providing insights into future trends, identifying potential risks and opportunities, and recommending the best course of action.
• Improved marketing: Market research can help African businesses better understand their customers’ needs, preferences, and behaviour. This can lead to more effective marketing strategies and better customer engagement.
• Increased sales: By understanding their customers’ needs and preferences, African businesses can develop products and services that better meet those needs, which can increase sales and revenue.
• Cost savings: Predictive modelling can help African businesses identify inefficiencies and areas for cost savings, leading to more efficient operations and improved profitability.
• Competitive advantage: By leveraging predictive modelling and market research, African businesses can gain a competitive edge over their competitors by identifying market trends and responding to customer needs more quickly and effectively.
• Better risk management: Predictive modelling can help African businesses identify and mitigate risks, such as supply chain disruptions, financial risks, and cybersecurity threats.
• Innovation: Predictive modelling can enable African businesses to innovate by identifying new market opportunities, developing new products or services, and improving existing offerings based on customer feedback and insights.

Overall, predictive modelling and market research can help African businesses become more agile, customer-focused, and profitable, enabling them to compete more effectively in the global marketplace.

3. The Need for Data-Driven Decision-Making ⭐

A survey conducted by PwC found that 64% of African businesses consider data analytics to be “very important” or “extremely important” to their business operations. Data-driven decision-making is the way to go if you want to make informed decisions.

Data-driven decision-making is the process of making decisions based on data and not assumptions or guesswork. It involves using a systematic data-driven approach to identify trends, patterns, and possible future outcomes.

It helps businesses achieve their goals faster, with fewer mistakes, and at a lower cost. Using tools such as CRM systems, supply chain optimization software, and business intelligence tools can help facilitate data-driven decision-making

One example of a Nigerian company that deployed data-driven decision-making to improve its bottom line is Konga, an e-commerce company that operates in Nigeria.

Konga used data analytics to identify the most popular products and categories among its customers, which helped the company to better target its marketing efforts and optimize its product offerings. By leveraging data analytics, Konga was also able to optimize its supply chain and logistics operations, leading to improved efficiency and cost savings.

In addition, Konga used data analytics to identify fraudulent transactions and improve its risk management processes, leading to a reduction in losses due to fraud.

Overall, Konga’s use of data-driven decision-making helped the company to improve its bottom line and gain a competitive edge in the Nigerian e-commerce market.

Excel Master offers FREE Consultations that give you Business Intelligence and Financial Health scores. To have this session, please book your consultation here. We’ve helped multiple companies draft out a data strategy to solve internal and external problems.

4. The Role of Data Management and Governance ⭐

Data management and governance ensure that businesses can improve data quality so that the right data is used for better decisions. The data should be accurate, complete, consistent, and relevant. Data governance ensures that data is utilized ethically while ensuring privacy and protection from cyberattacks. Tools like Microsoft SQL Server, SAP HANA, and Cloudera will help with data management and governance.

There are several benefits of having data management and governance practices for African businesses, including:

• Improved data quality: By implementing data management and governance practices, African businesses can ensure that their data is accurate, complete, and consistent, which can improve decision-making and reduce the risk of errors.
• Increased efficiency: Data management and governance practices can help African businesses streamline their data management processes, reducing the time and resources required to collect, store, and analyze data.
• Better compliance: With data management and governance practices in place, African businesses can ensure that they are complying with local and international regulations governing data privacy, security, and accessibility.
• Increased collaboration: Data management and governance practices can help African businesses promote data sharing and collaboration across different departments and stakeholders, enabling better coordination and decision-making.
• Reduced risk: Effective data management and governance practices can help African businesses identify and mitigate risks associated with data breaches, cyber-attacks, and other security threats.
• Improved customer satisfaction: By ensuring that their data management and governance practices are effective, African businesses can provide better customer service, personalized experiences, and targeted marketing.

Overall, implementing data management and governance practices can help African businesses optimize their data assets, reduce risk, and gain a competitive edge in the global marketplace.

5. Machine Learning, AI and Digital Transformation ⭐

Machine learning, AI, and digital transformation can help businesses focus on innovation and automation. They’ll come in handy when solving complex problems, and enhancing customer experiences, and decision-making processes. It helps businesses to understand customer needs better and streamline internal processes. Tools like Google Cloud AI, TensorFlow, and H2O.ai will help businesses adopt machine learning, AI, and digital transformation.

An example of a Nigerian company that has used machine learning and AI to improve its bottom line is Flutterwave, a fintech company that provides payment solutions to businesses and individuals in Africa.

Flutterwave used machine learning and AI to develop a fraud detection and prevention system that analyzes transaction data in real-time to detect and prevent fraudulent activities. The system uses machine learning algorithms to detect patterns and anomalies in transaction data, enabling Flutterwave to identify potential fraudsters and block fraudulent transactions before they are processed.

In addition, Flutterwave used machine learning to develop a credit scoring model that analyzes data such as transaction history, credit history, and financial statements to assess the creditworthiness of individual and business borrowers. By leveraging machine learning and AI, Flutterwave was able to reduce its risk exposure and expand its lending services to a broader range of customers, including small and medium-sized enterprises.

Overall, Flutterwave’s use of machine learning and AI helped the company to improve its risk management, increase its lending services, and improve its bottom line, while also providing its customers with a more secure and efficient payment platform.

6. The Need for Data-Driven Culture and Data Utilization

Businesses should adopt a data-driven culture and better data utilization. A data-driven culture is a practice of using data to make decisions in business. It involves ensuring everyone from top management to employees values and leverages data-driven decision-making processes. A survey conducted by KPMG found that 76% of African companies believe that data and analytics will be critical to their success over the next three years. Tools like Salesforce, TIBCO Spotfire, and SAS Visual Analytics can help businesses promote a data-driven culture while leveraging data utilization.

Here are some steps to ensuring a data-driven culture in your organization:

1. Set a clear vision: Establish a clear vision for a data-driven culture and communicate it effectively to all stakeholders in the organization. This includes outlining the benefits of data-driven decision-making and how it aligns with the organization’s goals and objectives.
2. Identify data champions: Identify and empower data champions within the organization who can lead by example, evangelize the use of data, and advocate for the adoption of data-driven practices across different departments and teams.
3. Invest in infrastructure and tools: Ensure that the organization has the necessary infrastructure and tools to collect, store, and analyze data effectively. This includes investing in data management systems, analytics software, and other technologies that can support data-driven decision-making.
4. Provide training and support: Provide training and support to employees to help them develop the skills and knowledge needed to work with data effectively. This can include training in data analysis, data visualization, and data interpretation.
5. Foster collaboration and communication: Encourage collaboration and communication among different departments and teams within the organization to promote data sharing and cross-functional analysis. This can help break down silos and ensure that insights from data are being leveraged across the organization.
6. Monitor and measure progress: Establish key performance indicators (KPIs) to monitor and measure the organization’s progress towards a data-driven culture. This can include metrics such as the percentage of decisions based on data, the number of employees trained in data analysis, and the number of data-driven initiatives launched.
7. Continuously iterate and improve: Continuously iterate and improve the organization’s data-driven practices based on feedback and data insights. This can help ensure that the organization remains agile and responsive to changing market conditions and customer needs.

By following these steps, organizations can build a strong data-driven culture to help them make better decisions, improve performance, and gain a competitive advantage. To find out more, book a session with us today.

7. Ways to Improve Data Maturity and Innovation in African Businesses

In a survey conducted by Forbes Insights, 75% of African executives said that they use data and analytics to drive business decisions, and 79% said that they plan to increase their investment in data and analytics in the next two years. Businesses should strive to increase their data maturity while embracing data innovation. Improving data maturity involves ensuring the right tools, practices, or frameworks to facilitate data function. It’s imperative in driving better organizational performance, productivity, and efficiency.

Data innovation is about creating new ways to use data, providing new insights, and adding new value to current or potential customers by developing innovative products or services. By implementing data-driven strategies and continually improving and innovating, businesses can enhance their performance, competitiveness, and success. You can kickstart this process with us today.

Here are some strategies to ensure data maturity and innovation in an organization:

1. Develop a data strategy: Developing a clear data strategy is critical to building a mature and innovative data culture. This involves setting clear goals and objectives for data usage, identifying key metrics to measure progress, and outlining the key initiatives and projects needed to achieve these goals.
2. Invest in technology and infrastructure: Organizations need to invest in technology and infrastructure that supports data management and analytics. This includes data warehousing, data processing tools, data visualization software, and other analytics platforms.
3. Build a team of data professionals: A team of data professionals is crucial for ensuring data maturity and innovation. This includes data scientists, data analysts, data engineers, and data governance specialists, who can work together to manage, analyze, and interpret data effectively.
4. Emphasize data literacy and training: Data literacy is essential for building a data-driven culture. Organizations need to provide regular training and resources to help employees develop data literacy skills, including data analysis, data interpretation, and data visualization.
5. Foster collaboration and knowledge-sharing: Encourage collaboration and knowledge-sharing across different departments and teams to promote data sharing and cross-functional analysis. This can help break down silos and ensure that insights from data are being leveraged across the organization.
6. Continuously evaluate and improve data quality: Continuous evaluation and improvement of data quality is essential for maintaining a mature and innovative data culture. This involves establishing data governance policies, ensuring data accuracy, and regularly monitoring data quality.
7. Encourage experimentation and innovation: Encouraging experimentation and innovation is crucial for building a culture of data-driven innovation. This involves creating a safe and supportive environment where employees feel comfortable taking risks, experimenting with new ideas, and learning from failure.

By following these strategies, organizations can build a mature and innovative data culture to help them make better decisions, improve performance, and stay competitive in today’s data-driven business environment.

10 Key Takeaways ⭐

1. Data analytics, predictive modelling, and data-driven decision-making are crucial for African businesses.
2. Tools such as machine learning, AI, and digital transformation can create value for businesses.
3. Data management and governance are fundamental in ensuring data quality, security, and privacy.
4. A data-driven culture and better data utilization can facilitate better decision-making in business.
5. Ensuring data maturity and innovation can help businesses achieve better organizational performance.
6. Using tools like data visualization can help interpret data better.
7. Predictive modelling can forecast potential outcomes.
8. Market research can help understand customer needs.
9. Data privacy and security can be ensured through data management and governance.
10. Businesses must continually innovate and update their data-driven strategies.

Call to Action ⭐

Businesses in Africa must adopt data-driven processes, and to that end, they should invest more in data management tools, data visualization tools, predictive modelling tools, market research tools, and business intelligence tools, among others. African businesses must realize that the key to success in today’s age lies in the effective utilization of data.

To kickstart or optimise your data strategy, please book your consultation here. We’ve helped multiple companies draft out a data strategy to solve internal and external problems.