Evaluating Enterprise Data Literacy

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Any organization that aims toward complete digital transformation must move toward Enterprise Data Literacy. So, what exactly is Data Literacy? 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.”

According to the Gartner Annual Chief Data Officer (CDO) Survey, an absence of Data Literacy is the primary reason behind CDOs’ inadequate performance. To combat this, more and more enterprises are engaging in “competency development in the field of Data Literacy.”

In a digital culture, the goal is to make data accessible and available to all employees – not just to data scientists, analysts, or CDOs. Right now, most business executives realize that all employees need to “communicate in a common data language,” but data regulations, and privacy and security policies are becoming serious barriers to such open communication.

The increasing proliferation of advanced AI technologies in the digital workplace has made it somewhat easier for ordinary employees to access and analyze data as advanced technologies enable automated Data Science tasks. Domain experts may be better qualified to assist the data scientist in generating data for specific transactional processes, and this is why Data Literacy is becoming a critical skill for all business executives.

The Growing Importance of Data Literacy in the World of Analytics

“Imagine an organization where the marketing department speaks French, the product designers speak German, the analytics team speaks Spanish and no one speaks a second language.” This quote from the aforementioned Gartner article accurately reflects the helpless situation of a digital business with “no common data language for communication” among employees. That’s a business without any Data Literacy.

A recent study from Qlik reports that Data Literacy is the “top indicator of individual success in data and analytics.” This study, conducted on behalf of the Data Literacy Project, clearly indicates that organizations with aggressive Data Literacy programs will outperform those who do not have such programs. Currently, employers in the U.S. are stressing the importance of demonstrated data skills rather than Data Science degrees. The McKinsey article Advanced Analytics: Nine Insights from the C-suite contains additional information.

Bernard Marr of Forbes feels that business executives with specific expertise in an area are best qualified to assess data, and discover actionable insights because they are the personnel likely to make the business decisions or actions. So, it is imperative that all workplace employees have the basic ability to read, analyze, and interpret data.

When data-enabled insights are discovered firsthand by ordinary employees of an organization, then that organization becomes far more capable of making the best decisions. IDC stated that enterprise spending on big data and analytics platforms would surpass $215 million in 2021, but Gartner claims that half of the organizations lack the Data Literacy and AI skills to achieve business value. This proves that business value is not so much related to data volume as to Data Literacy.

Benefits of Enterprise Data Literacy

Here are some direct benefits of implementing Data Literacy in any organization:

  • The data-literate employee can bridge the gap between data analysts and pure business groups or consumers.
  • The increased data-value awareness will help employees to get the most advantage of data-driven insights or actions.
  • The gap between business expectations from data and data-driven business outcomes will minimize.
  • More employees will be prepared to take advantage of the big data and analytics investments, which usually remain untapped due to skills shortages.
  • If employees gain the skill of “reading, writing, and interpreting data in context,” they will soon become experts in directly extracting value from their data analysis without the help of data professionals.
  • Data Literacy is to the 21st century what literacy was to the previous century.
  • The Future of Jobs Report indicated that “Data Literacy will have a positive impact on some key business metrics, such as gross margin, return-on-assets, return-on-equity and return-on-sales.”
  • Companies with aggressive Data Literacy programs will have higher valuations.

More information is available in Data Literacy: A critical  skill for the 21st century.

Global Effort to Combat the Lack of Data Literacy: The Data Literacy Project reported that a collective effort has been launched to enhance Data Literacy through the Global Data Literacy Project. The partners in this initiative are Qlik, Experian, Cognizant, The Chartered Institute of Marketing (CIM), Data to the People, Pluralsight, and others. The collective aim of the business partners is summarized as follows:

“Our new Data Literacy Index shows large companies have the potential to achieve $500 million in higher enterprise value through a more data literate culture and workforce, and yet only a third of enterprises provide employees with Data Literacy training, showing a significant adoption and enablement gap.”

The Data Literacy Project was developed to combat the defined gaps. Gemma Butler, formerly of CIM, comments:

“The community of people contributing to the Data Literacy Project are the leading voices in this space – all driven by a shared desire to build and nurture lifelong Data Literacy across the globe. In addition, a Data Literacy Project advisory board has been formed to provide strategic guidance on how the Data Literacy Project can best achieve its goals, as well as give direction on how to shape educational content and assessment tools.”

The Data Literacy Project will provide learning opportunities, assessment tools, and general information to individuals and organizations for achieving a data culture in their organizations.

The Role of CDOs in Spreading Literacy Awareness

Many organizations are launching competency development in the field of Data Literacy, acknowledging their extreme deficiency. In a data-driven organizational culture, Data Literacy has been identified as the most important skill for an employee. To this end, the CDO has to make special efforts to transform the organization’s data assets into a value-added, revenue-generating source. This is probably why you see a sudden rush to fill in the CDO position across enterprises.

The article The Importance of Data Literacy discusses the framework of a specific Data Literacy program proposed by Jordan Morrow, former Global Head of Data Literacy at Qlik.

Literacy Traits to Help an Organization Achieve Maximum Value

As more employees continue to gain the skills to extract insights from data for beneficial business outcomes, every organization will need to focus on the following four areas to help their Data Literacy program achieve the maximum benefit:

  • Open access to pre-selected data pipelines across an organization, based on the widest use
  • Business leaders taking an active role in directing employees to talk with data to develop the right mindset.
  • Provisioning a single, shareable data platform (single truth) across the enterprise
  • Promoting data-driven thinking (critical analysis) among employees in daily decision-making; employees need training in critical thinking

Additional information can be found in the Info World article Data Literacy: What it Means and Why it’s Essential for Your Business, and  Lead Your Data Revolution: How to Build a Foundation of Trust and Data Governance, a webinar that discusses “data-enablement practices” in enterprises.

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