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Dr. Nico Broers
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Data literacy is crucial for companies to make efficient, data-driven decisions. By strengthening the data literacy of all employees, an organisation can accelerate its digital transformation, increase productivity and promote a customer-centric focus. This blog post explains the benefits of data literacy and provides resources to strategically develop this essential skill.
Have you ever thought about what would happen if not just data scientists, but everyone in your company had basic data skills? It's not just a nice idea, but a crucial step in making your company fit for the digital future. Digital transformation is not a one-off project, but an ongoing development for every organisation.
You've probably heard the phrase "data is the new oil". Every organisation collects data these days, and many consider it to be their most valuable resource. Normally, the collection and processing of data is left to a small circle of experts. But imagine if this knowledge was available company-wide.
Although the terms are often used in similar contexts, there is a clear difference between data centricity and data literacy. Data centricity refers to a company's strategic orientation, where data is at the centre of all business decisions and processes. It is about creating an infrastructure that enables data-driven decisions across all departments. You can find out more about this in our blog about data centricity.
Data literacy, on the other hand, is the ability to understand, interpret and use data effectively. It is about the skills of employees to read and analyse data and make decisions based on it. While data centricity forms the structural and strategic basis, data literacy is the personal skill that every employee needs to develop in order to be successful in a data-centric organisation.
Here are some typical problems you may recognise: Data scientists are frustrated when working with colleagues who lack basic data literacy. Business leaders don't get the data they need in time to make strategic decisions. Often the problem lies in inefficient communication caused by a lack of data literacy.
In today's business world, data literacy is essential to becoming a modern, data-driven organisation of the 21st century. Employees in different roles need data skills to make the most of the tools and extensive data sets available. With the increase of automation in business processes, it is also important that employees in more traditional roles understand how data is collected and processed. A study by Gartner found that low data literacy is the second biggest barrier to organisational success. However, when everyone in the organisation has access to data and the ability to interpret it, the transition to a digital company is accelerated and processes are streamlined.
Data is only as valuable as how it is used. Simply collecting data is useless if it is not effectively processed and transformed into actionable insights. With comprehensive data expertise in the team, decisions can be made based on reliable information, leading to better strategy development and operational efficiency.
A key benefit of data literacy is the ability to translate and visualise data so that it can be understood and used by all. This is especially important for decision makers who may not be trained in data science themselves. According to a study by Northwestern University, data visualisation is one of the most sought-after technology skills. Good data translators can improve communication between data scientists and other teams by putting data into a form that is compelling and directly applicable.
Through the effective use of data, a company can better understand and serve its customers. Large technology companies such as Netflix, Google and Facebook use user data to personalise and improve the customer experience. This practice can be applied to any industry by training employees in all areas - from product development to customer service - to use data to improve customer interactions.
Much like mastering Microsoft Office became a basic requirement in the 1990s, data literacy is now essential for all types of professions. The ability to understand and utilise data is crucial to meet the demands of modern digital business models. Studies by Accenture and Qlik show that the loss of productivity due to a lack of data literacy costs companies worldwide 200 billion US dollars every year. Data literacy enables every employee to achieve their goals more effectively and contribute to the overall productivity and performance of the organisation.
In the world of data literacy, there are some organisations that are considered pioneers and impressively demonstrate how far-reaching the benefits of data literacy can be. Here are three examples:
Amazon uses data to optimise almost every aspect of its business, from inventory levels to personalised marketing strategies and real-time price adjustments. Every employee is encouraged to make data-driven decisions, resulting in a highly customer-centric strategy. This is reflected in the personalisation of the customer experience, where Amazon uses data analysis to make individual recommendations that often lead to increased sales.
Netflix is known for how it uses data literacy to personalise content and increase user engagement. By analysing viewer data, Netflix can not only personalise recommendations but also make strategic decisions about which original series to produce. This has helped Netflix cement its position as a leading streaming service by understanding exactly what its users want to watch and how they want to watch it.
Airbnb uses data to provide an optimised experience for hosts and guests. By analysing booking trends and user feedback, Airbnb continuously adapts its platform to both improve the user experience and help new hosts be more successful. Data expertise enables Airbnb to develop market-specific strategies based on detailed insights into users' wants and needs.
Lack of data literacy is one of the biggest barriers to the success of digital transformation and an organisation's ability to grow. Although investment in big data and the hiring of data analysts and data scientists is increasing, it is estimated that one in two organisations lack the data and AI skills to deliver sustainable business value.
Data literacy today is what mastering the alphabet was a century ago.
To strategically build data literacy in your organisation, we have created a free e-book that shows you step by step how to develop this important skill. In our e-book "4 steps to strategically build data skills", we explain in detail how you can create effective training and a culture of data literacy. Download the e-book now for free as a PDF: 4 Steps to Strategically Building Data Skills.
With these resources, you'll be well equipped to promote data literacy in your organisation and reap the many benefits of a data-driven way of working.
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