Six-step AI roadmap emerges for Nigerian SMEs

Nigerian Small and Medium-sized Enterprises (SMEs) can adopt Artificial Intelligence without the huge budgets or specialised data science teams often associated with the technology, according to a new study.

The study, published in the International Journal of Comparative Studies in International Relations and Development, outlines a six-step approach for SMEs seeking to use AI to improve productivity, reduce operating costs and strengthen their competitiveness.

The research comes as advances in cloud computing, affordable digital platforms and application programming interfaces have made AI tools more accessible to smaller businesses.

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Understand AI

Ayodeji Idowu, the author of the study, recommends that SMEs begin by understanding where AI can create value in their businesses rather than attempting to deploy the technology across every operation at once.

Start small

The second step is to start with affordable, off-the-shelf AI tools before moving to more complex systems. Businesses should then identify high-impact functions where automation can deliver practical benefits.

Target impact

The study specifically points to customer service, marketing, finance, inventory management and logistics as areas where AI can support business operations.

For logistics companies, for example, AI can be used to optimise delivery routes, potentially helping businesses reduce fuel costs and improve operational efficiency. AI-powered accounting systems can also reduce manual errors, while predictive marketing tools can support business decision-making.

Automate tasks

The fourth step in the roadmap is automating repetitive administrative tasks. The researcher argues that SMEs can use AI to reduce the amount of time employees spend on routine work, allowing businesses to improve efficiency.

Build skills

The fifth step is investing in employees’ digital literacy. This is particularly important because about 65 percent of SMEs identified limited technical expertise as their biggest obstacle to adopting digital technologies, according to the study.

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Go custom

The final step is a gradual move towards customised AI solutions as a company’s digital capabilities improve.

The study also highlights the challenges that could slow adoption in Nigeria, including misconceptions about implementation costs, inadequate digital skills, poor electricity supply, unreliable internet connectivity and resistance to replacing traditional manual processes.

Global examples cited in the research illustrate the potential gains. German family-owned manufacturer TKG, for instance, reduced order-processing time by more than 50 percent after integrating AI and recovered its investment in less than three years. The study also cited retailers using AI-powered predictive analytics that recorded sales increases of about 25 percent within a single quarter.

Beyond individual businesses, Idowu called for greater cooperation between government, technology companies, educational institutions and SME owners.

He recommended grants, tax incentives and low-interest technology loans to help businesses overcome the financial barriers to adoption.

The researcher also urged SMEs to begin building quality digital records, which could provide the data needed for more advanced AI applications as their businesses mature.

The study’s central argument is that AI adoption among Nigerian SMEs does not have to begin with expensive or complex technology. A gradual approach, starting with affordable tools and practical business problems, could allow smaller companies to build the skills and digital capacity needed for more advanced applications.