Data Literacy: Why it should matter to business leaders

According to MIT, data literacy is the ability to read, work with, analyse and argue with data.

It is the ability of individuals to effectively consume data.

It's a skill which empowers all levels of workers to ask the right questions of data and machines, build knowledge, make data-informed decisions and communicate that meaning with others.

In today's fourth industrial revolution, where data and automation have become more pervasive, businesses are concerned with taking advantage of the innovation and growth afforded by new technology and from data.

Faced with the challenge of planning for a future where machines will augment work and transform job roles, business leaders are having to consider what skills will be required by their workforce in the coming years.

Inevitably, data literacy is emerging as one of these skills.

What are the benefits of data literacy?

In the new digital world, it doesn't matter which department or business function individuals or organisations work in, data can be used to drive more profitable operations and decisions. Qlik's research highlighted that almost all global business decision makers believe that data is critical to how their organisation makes decisions, but that most organisations are not doing enough to see success with data.

Data-informed decision making empowers individuals across the organisation.

As mentioned before, this can have a significant impact on the bottom line.

The Data Literacy Index – commissioned by Qlik and conducted by IHS Markit and a professor from Wharton School – found that more data literate firms have a greater enterprise value of between 3-5%.

This represents US$320-$534 million of the total market value of each business.

The companies with increased valuations also saw similar improvements to productivity, gross margin and other corporate performance metrics, and all performed well against three critical criteria for data literacy: improved individual data skills, democratising data across their enterprise (not solely in IT), and enabling employees to make data-informed decisions.

How do you get there?

Becoming a data literate organisation requires top-down vision, support and investment.  Some organisations can integrate data literacy into their existing skills initiatives, while others may choose to purchase learning software and even books about data to aid workforce development.

There are also free resources available at the Data Literacy Project, including an adaptive framework to help businesses get started.

In addition, data literacy depends on a cultural shift in order to be successful.

Management needs to communicate the importance of using data in decision-making, advise on the technical and human resources available to encourage this, and coordinate the access and use of data across the organisation.

Most importantly, they should stress that every individual has an important role in sharing data-informed knowledge and techniques with their peers.