Increasing Data Literacy to Drive Better Decision-making

The goal of data literacy is to build an environment where every employee has the resources and confidence to perform their own analytics or data science work.

Gartner defines data literacy as “the ability to read, write and communicate data in context, including an understanding of data sources and constructs, analytical methods and techniques applied, and the ability to describe the use case, application and resulting value.” Unfortunately, only 24 percent of the workforce is confident in their ability to read, work with, analyze, and argue with data, according to the Data Literacy Project.

At its core, data literacy in a business context means equipping employees with the knowledge of how to use data to power strategic insights. Most organizations have the data in their possession but lack the technical skills across the organization to sufficiently analyze and interpret it – otherwise known as the “skills gap.” But why should companies care about improving data literacy?

The business value of data literacy

When done effectively, closing this skills gap leads to better data-driven decision-making throughout the organization. In the ideal scenario where 100 percent of an organization’s workforce is confident in their ability to interpret and analyze data, new strategic insights gleaned across every team can yield competitive advantages for the business. For example, product and design teams can translate customer behavioral data to develop the next in-demand feature and be first to the market with it. Similar examples of the potential value of data insights exist across nearly every department, yet often data science teams, analysts, or business intelligence (BI) power users are the gatekeepers of these insights. The lack of widespread data literacy prevents many companies from acting on data in a timely manner to see business outcomes come to life.

Meanwhile, data scientists and engineers continue to be in high demand and are stretched incredibly thin. Instead of solely assigning data analytics tasks to these teams, the goal of data literacy is to build an environment where every employee has the resources and confidence to perform their own analytics or data science work.

Where to start

Currently, only 34% of organizations provide data literacy training. Driving a data-first philosophy needs to start at the top with executive buy-in and leaders promoting the business benefits of data literacy. It’s critical for the C-suite to understand the impact data can have. In fact, a study from the Data Literacy Index found that organizations with higher corporate data literacy scores yielded up to $540 million in higher enterprise value compared to those with low scores.