Hot SourceJOSHUA OSAH argues that small and medium sized enterprises need the right intelligence to manage their finances judiciously
For any business that strives to be successful and sustainable, there should be unequivocal consensus by its stakeholders that their decision making must be contingent on intelligence that is extracted from reliable data. This line of thinking is conscientiously crafted to get the attention of small and medium enterprises (SME’s) that are domiciled in Nigeria, noting the dismal statistics that depict the high failure rates of such businesses in the region. The inextricable link between business intelligence (BI) and business decision-making cannot be overemphasized. Metaphorically, making decisions for a business without B.I is commensurate to driving blindfolded. Obviously, we can all predict that there will be catastrophic ramifications for such an action.
Central to the concept of B.I is the quality level of data that comprises intelligence. Data quality embodies a comprehensive expression that considers the accuracy, completeness, timeliness, ease of accessibility, security, degree of understandability and relevance of accumulated data from which intelligence emerges. Getting data to this state necessitates a conscious, deliberate and painstakingly meticulous process that may expectedly intimidate business owners. This in turn may breed reluctance to actions aimed at validating the quality of data that businesses use to form their intelligence. Business owners who entertain such reluctance should however be cognizant of the idiom garbage in garbage out (GIGO).
Simply put, low quality data will produce low quality intelligence. Given the above synopsis, it is disheartening to note that many SMEs in Nigeria, do not treat data quality concerns with the required urgency. Relatedly, many firms in this context make unintelligent decisions. We have all heard the anecdotes of mindless financial planning, random product launches, atrocious hiring decisions and lack of attention to customer concerns. Obviously, failing to collect data across these focal areas will result in poor decision making in related areas. Using any web indexing tool, a quick search about SME failure rates in Nigeria will produce a substantial number of online articles, implicitly suggesting that it is indeed an area of concern.
Furthermore, a good number of these articles and written pieces point to poor decision making as a key factor that contributes to the eventual failure of these businesses. Granted, there is overwhelming perception by majority of the Nigerian populace that the harsh economic environment is responsible for the high failure rates that SME’s experience. Whereas there is truth to the thinking that Nigerian domiciled SMEs operate in a highly precarious macro-economic environment, it is also true that the only way to navigate such a context is by consistently making the right decisions (which can only be achieved where there is access to quality intelligence). For instance, an SME needs the right intelligence to manage its finances judiciously, and in a similar manner they need the right intelligence to access external funding.
Besides, it makes logical sense for SMEs in the Nigerian context to focus on the actions that they can control rather than constantly worrying about uncontrollable dynamics at the macrolevel. To achieve acceptable data quality standards that the paragraphs above have been attempting to argue for, Nigerian domiciled SMEs must begin to habitually undertake certain actions that will overtime enhance the quality of data required to support their decision making. Firstly, it is believed that a good proportion of the SMEs that operate in Nigeria do not routinely capture operational data. An example that is the lack of proper accounting record keeping that is commonly observed amongst businesses in the informal sector.
Clearly, if there are no records kept about financial undertakings and actions, how can such businesses judge the soundness of their financial decisions over time. Moreover, if no records are captured data quality cannot be ascertained. Therefore, a first point of call for Nigerian domiciled SMEs is to ensure consistent data capture. Osah (2024), points out some useful tips that can aid such data capture. I will take it a notch higher by nudging SMEs to adopt digital tools to support the capture of their operational data. As recently as 2025, I have witnessed firsthand where SME owners/representatives still make use of pens and notebooks to facilitate recording of their operational activities. The irony of this observation is that on these notices a good number of these representatives had smartphones with them. It is widely acknowledged that android and IOS enabled smartphones can support spreadsheet applications which are very powerful tools for organization and record keeping.
Moreso these spreadsheet applications can be downloaded for free. Given these points of note, I often wonder why a person who owns a smartphone (which is essentially a pocket computer), continues to do their operational recordings in physical notebooks. As such, whenever I come across any such instances, I would often ask the storekeeper if he/she had any knowledge of spreadsheets, explain the concept of spreadsheets to those that were not aware and also inform them that they could download and use spreadsheets on their smartphones free of charge. Note, my prompting of Nigerian domiciled SMEs to adopt digital tools for their record keeping is not one to help them demonstrate how much they can keep up with the Jones.
Rather it is being done because digital recording, especially with appropriate software like spreadsheets, presents certain benefits that can overtime support the exponential improvement of the data quality of these businesses. For the sake of brevity that this piece demands I will not extensively elaborate on these benefits. Instead, I will briefly make mention of them and direct readers to the article on data quality by Osah Umeoniso Joshua, which elaborately discusses these benefits of digital data capture. The related benefits are as follows: Existing mechanisms for data validation, that can help in reducing data entry errors. Such validation restrictions cannot be achieved using manual data entry methos (e.g pen and notebooks). Availability of automated tools like formulas to support calculations e.g. total sales or total expenditure on inventory.
This will limit the type of errors that are typically inherent in manual calculation processes that cannot be circumvented when using pen and notebooks. Format consistency settings to ensure record entry uniformity that enhances search and sorting functions. It will certainly be impossible to adhere to a consistent format judiciously over a long period of time when entering records with manual tools. Ease of sharing – especially where multiple employees need access to the same data.
Essentially, digital data can easily be shared once the device that it is created on is connected to a network. In contrast, with manual recordings, the artifact holding recorded information (e.g. the notebook) must be physically transported, or the party requiring access has to come to where the said artifact is located. Digitally captured data can be used with a wide range of software applications, each presenting different analysis value propositions. E.g. the same data can be used with accounting software, relational databases, enterprise resource planning systems and content management systems amongst others. Such varied use cannot be achieved with manually recorded data. Whereas adopting these practices may not initially be performed consistently, with the right resolve, determination and commitment to them SMEs will gradually notice a marked improvement in the quality of data that informs their business intelligence.
Dr Osah is a senior lecturer at the School of Media and Communication of the PanAtlantic University, Lagos
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