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Data literacy – the foundations of business success in a data-driven world

(Image credit: Image source: Shutterstock/alexskopje)

As individuals, data is becoming a more accepted part of our daily lives and we are more aware than ever before about our own personal data and how organisations are using it. Equally, it’s an accepted, and important, business asset. This was highlighted in recent research from Experian which suggested 98 per cent of companies are using data to improve the customer experience.

The most innovative companies in the digital age are using data and technology to build superior, hyper-personalised experiences for customers and make the most relevant decisions based on that information. It stands to reason that if innovation relies on data, then organisation who have a data literate workforce will thrive.

Whilst organisations may be clear on the opportunity data provides for innovation and growth, there appears to be less clarity on how data literacy can impact that. As a result, organisations have perhaps struggled to define or prove the value of investing in formal data literacy skills.

That’s until research by the Data Literacy Project uncovered a relationship between data literacy and the value it provides back to an organisation. By creating a model that ranks an organisation’s literacy score against corporate performance, the results revealed a $500 million opportunity for businesses. Further to that, the organisations ranked in the top third of the index were associated with three to five per cent greater enterprise value.

It also found that data literacy can positively impact other measures, including gross margin, return on assets, return on equity and return on sales.

Next generation

There’s no question that data literacy goes hand in hand with technology when it comes to creating the perfect recipe for innovation. In the workplace, the immediate task at hand is to up-skill and provide the right tools for individuals to embrace a data-driven future.

As more of us continue to navigate our lives through digital channels, the importance of data literacy in everyday society becomes far greater. And businesses can play an important role, which can ultimately have an impact on how literate their next generation of employees are. With literacy rates low amongst the young, we need to forge links with schools to give pupils practical data experiences linked to other subjects such as maths, geography and science that will put them in good stead to enter the workplace with the skills to progress.

Getting the fundamentals in place

For those organisations putting in the foundations for data literacy, here are four questions to address in your mission to empower a more data literate workforce:

  • Access to data – can business users get hold of the data they need to gain better insights and drive change, or is it owned by a specific department?
  • The right technology – is there user-friendly and privacy-first technology available that can support positive outcomes from data?
  • A clear framework – is there a centralised programme, often led by a CDO, which can consistently drive to improve data literacy and the tools available?
  • A culture of curiosity – is there a network available to help people ask questions of data and those who work closely with it?

The best way to enable fast discovery and deeper insights is to disperse data expertise across the organisation.  That, combined with easy access to analytics, can empower non-data experts with a more purposeful tool kit for the task at hand.  In most businesses, data scientists are required to complete the most basic of data related tasks.  By creating a culture where sharing data knowledge and tools is the norm, these responsibilities can be distributed across a data-literate workforce, freeing up valuable time for your data specialists to be truly innovative. 

Although daunting, a more data literate workforce gives you a chance to transform a business for all the right reasons. The challenge is finding an effective way of integrating the new behaviours, processes and roles that are required to be successful, embedding them into the heart of the operation. Those who live and breathe this way of doing business, embracing the new standards and focusing on what's right for their customers, will find many chances to prosper this new data-driven world.

Paul Malyon, Head of Data Literacy, Experian UK&I (opens in new tab)
Image source: Shutterstock/alexskopje

Paul is Data Strategy Manager at Experian.