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Data Literacy Trends in 2023: Formalizing Programs

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data literacy

Data Literacy, the ability to explore, understand, and communicate with data, will significantly increase its role in organizations in 2023 and beyond. Companies will gravitate toward Data Literacy to get insights from big data and mobilize artificial intelligence (AI), a technology underlying a machine’s ability to learn from experience. 

Unfortunately, many businesses need to ramp up their Data Literacy quickly to achieve these goals as data-driven companies. This problem comes at an inopportune time when Forrester Research predicts “70% of employees are expected to work heavily with data by 2025 – up from just 40% in 2018.”

However, promised profitability from a data-literate workforce will motivate companies to prioritize Data Literacy. The Global Data Literacy Project claims that large companies could increase their value by $500 million with a more data-literate culture. 

So, in 2023, organizations will take a formalized approach toward Data Literacy. They will do so to understand better the level of literacy in their businesses, where they need to improve their data skills toward becoming data-driven, and how to get there.

A Gap in Leader and Employee Perceptions of Data Literacy

While many businesses generally agree that Data Literacy remains a big Data Management challenge – about 53%, according to a recent Trends in Data Management DATAVERSITY® study – a disconnect exists between managers and workers about the cause of poor Data Literacy. 

According to Forrester Research, 79% of leaders say they give workers critical data skills. However, only 40% of employees say their companies provide the Data Literacy skills expected for the job. 

This rift between managers’ and their teams’ perceptions only widens in assessing the quality of organizational Data Literacy. Research shows that over half of senior managers think their workforce has confidence in its literacy. However, only 11% of employees feel confident in their data skills.

An Overreliance on Intuition

Due to misjudging an organization’s Data Literacy, only 48% of organizations surveyed by Forrester Research make business decisions using quantitative data skills. The rest make decisions based on gut feel or instinct.

In a recent interview, Dr. Prashanth Southekal, CEO of the DBP-Institute, stated:

“The real substitute for data is intuition … Where data literacy is poor, intuition will prevail over data in decision-making. Users no longer need to rely on intuition when they realize they can rely on better decisions made with good data.”

A Mandate for AI Initiatives

Having a low level of Data Literacy is no longer acceptable. Organizations must have a holistic understanding of where and how to use AI to drive their business. The White House Office of Science and Technology Policy (OSTP) has mandated this knowledge.

In the OSTP’s Blueprint for an AI Bill of Rights, the authors restate that AI algorithms have and continue to reinforce existing biases. To mitigate these effects, any AI requires intermediaries, humans, to interpret its results. These folks need to have adequate Data Literacy.

When workers comprehend why algorithms return recommendations and results, companies can better deal with any potential AI discriminatory effects. As a side result, customers have more trust in how their vendor uses data. 

Gartner estimates that organizations that instill confidence in their AI-related activities will see over 75% of AI innovations succeed. Where businesses have invested plenty of resources in AI, this level of success will encourage firms to formalize Data Literacy.

Comprehensive Data Literacy to Unlock Big Data Insights

Businesses recognize that Data Literacy heavily influences how well they unlock insights with big data. Consequently, some companies will seek elite and advanced data-literate analysts in 2023 to get the most from big data and influence others. Successful results in increasing Data Literacy will remain ambiguous.

Gartner reports that 35% of chief data officers cite poor Data Literacy as one of the top roadblocks to establishing an adequate data and analytics team. This result is not surprising, as the average business staff “neither have the ability nor the willingness to embrace data-driven insights beyond their comprehension.”

For a high level of Data Literacy, employees throughout the organization need to know how to work with data and understand how it’s generated, processed, analyzed, and reported. Furthermore, they must get support to make daily decisions based on their data skill set and to leverage their knowledge independently and as team members.

The most successful data-driven organizations promote a culture of Data Literacy towards capabilities to do predictive and prescriptive big data analytics. McKinsey notes that high-performing businesses have data and analytics programs contributing “at least 20% to earnings before interest and taxes (EBIT).”

An Executive Initiative

A successfully data-driven organization starts Data Literacy with dedicated senior management. These leaders need to have the skills to make sound data-driven decisions, understand their impact on their teams, and demonstrate “to their teams how they apply company data.”

Moreover, executives need a human focus to have successful Data Literacy. This kind of commitment must span beyond the chief data officer to other C-level leaders. Otherwise, chief data officers risk falling with the majority that fails to foster the necessary Data Literacy.

Executives that currently prioritize people in Data Literacy rely on a trickle-down effect. Literacy resources go first to those working with data, 58% to data analysts or data scientists. 

Workers in general roles get neglected. The last teams to get Data Literacy training include finance, 11%; marketing, 10%; and sales teams, 9%. In 2023, C-level managers should consider company-wide literacy programs so all employees can achieve basic data skills. 

Data Literacy Metrics

Becoming a data-driven organization means applying data-based decision-making to Data Literacy. Measuring the effectiveness of literacy initiatives will help leaders check their perceptions and grow the data skills needed to thrive.

Managers will consider the following over the next year when assessing Data Literacy programs:

  • Increased confidence with data skills
  • Improvements in worker activities with company data
  • Comprehension, as shown in Data Literacy assessments
  • Competencies in data definition, production, and usage
  • Advances in Data Quality across the organization

Content Customization

As senior managers evangelize Data Literacy across their organizations and measure the effectiveness of their initiatives, these executives will start to recognize that their teams have different literacy levels. Some units have more data-driven approaches, whereas others rely on manual labor.

Furthermore, different employees fall into different Data Literacy categories, from novices to data analysts. So, corporate materials need to target the most relevant literacy levels when workers receive them.

Some organizations will customize Data Literacy instruction based on different learning styles, backgrounds, and roles. A salesperson or marketer at a basic Data Literacy level may become familiar with other data types, while an analyst gains an understanding of nuances and limitations of data.

Organizations will want to track how employees progress in their Data Literacy capabilities. Many Data Literacy programs use badges or certifications to communicate an employee or team’s skills. 

The Rise of Data Communications (DataComs)

Organizations that succeed in creating a data-driven culture will develop a formalized Data Literacy program through DataComs, a process leveraging understanding of data and how to best present this information. Corporate communications will collaborate with executives and technical leaders to develop and improve Data Literacy initiatives.

At first, some companies will try to pair Data Literacy through their Data Governance programming. Data Governance boards improve Data Quality, understanding, discoverability, and access through company-wide collaboration. So, why not combine the two?

Bob Seiner, President and Principal at KIK Consulting & Educational Services, explains that Data Governance programs typically need more resources to address specific team Data Literacy requirements and individual needs. While Data Governance helps employees define, produce, and use data and create a shared language, it focuses on the shared journey and establishing accountability across roles. 

DataComs will take charge of Data Literacy. Corporate communications excel in messaging, enterprise campaigns, and organization training during orientation, onboarding, and career development. 

DataComs will tie in with Data Governance by promoting its work. In addition, DataComs will identify and address more significant literacy gaps companywide.

Conclusion

In 2023, successful data-driven companies will develop and implement a formalized Data Literacy program with different tracks. Such an initiative promises to reduce reliance on intuition and apply increased Data Literacy to interpret AI results and improve big data insights.

The executive suite will need to back any literacy program by prioritizing how and where resources get allocated. They will demand metrics around Data Literacy and a data-driven approach to improving it.

Corporate communications will take on a DataCom, owning Data Literacy and supplementing Data Governance efforts in increasing data-driven decision-making. 

Formalized Data Literacy programs will increase rapidly. By 2026 expect to see 40% of large enterprises in India fostering such programs.

Image used under license from Shutterstock.com

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