According to McKinsey Global Institute, data-driven organisations are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable than organisations that don’t leverage their data. Having data literacy is among the most pressing objectives for many executives.
With more organisations recognising the importance – and opportunity – of data, we’re seeing significant increases in spending on data and analytics products. Investment in data and analytics products is expected to exceed $200 billion by the end of this year, up from $150 billion in 2019. While new technologies open the door for business improvements – including increased efficiencies, smarter decision-making, enhanced customer experiences and more innovative products – investment in these areas is wasted if the business doesn’t have the right skills to extract the value from its data to push the business forward.
Savvy leaders are beginning to realise that it takes more than tools and technology to become a data-driven business, they are now recognising it’s a skills gap that’s preventing them from leveraging data to its full potential.
Enter, data literacy.
Data literacy is the ability to read, write and comprehend data and is urgently becoming the determinant of success for all businesses, regardless of size or industry. In fact, Gartner predicts that by the end of this year, 50% of businesses will lack sufficient data literacy skills to achieve business value.
Businesses that are able to combine the knowledge and experience of their workforce with the wealth of data available to them will become the market leaders of their industries.
Data literate workers are empowered to understand and engage with the data that surrounds them, they uncover valuable insights, make smarter decisions, innovate and adapt products, services and operations to the ever-evolving market demands. Data literacy also allows them to communicate with their peers using a common language; it allows the traditional ‘non-data’ roles to share their diverse experiences and expertise with the traditional ‘data’ roles and bring meaning to the magic.
Where businesses have traditionally been composed of ‘data’ and ‘non-data’ roles, Industry 4.0 will demand that every employee plays a data role within the business. For a customer service assistant, their data role may involve generating data through sales and transactions, as well as collecting and updating membership data for new and existing customers. Think now of the Head of Innovation who could use that data to better understand customers’ buying habits, predict future trends, develop customised experiences and design new products and services.
If the infiltration of data into every aspect of our lives (I’m looking at you, Siri) has taught us anything, it’s that data is no longer only relevant to the IT department. For a business to be truly data-driven, every person within the organisation – from the factory floor, to the C-suite – must have the awareness and ability to weave data literacy into the fabric of their everyday tasks. Without this, they will quickly become unable to contribute their wealth of knowledge and experience to the wider organisation, effectively losing their voice in the data-driven economy.
While enterprise-wide data literacy remains low, there have been some moves in the right direction. Gartner predicted that 80% of organisations would have specific initiatives to overcome the data literacy gap by the end of this year – regretfully I’d suggest this number is currently closer to 20%. Knowing how and where to start is a problem for many organisations we’ve spoken to, and we’re seeing more and more solutions coming to market to address this exact problem.
The key to organisational data literacy is to measure, map and develop competencies at an individual level. By measuring the individuals’ existing level of data literacy, and then mapping what ‘good’ looks like for the organisation going forward, organisations can develop tailored education and information programs to address specific gaps and foster a truly data-driven culture.
As governments around the world continue to unveil bold new strategies to address gaps in data literacy, we see the new data-driven economy going from strength to strength – in both public and private sectors. It is an exciting time, and an exciting opportunity, for businesses to answer the call and close the data literacy gap.