Why data literacy is the key to business success
As a kid, I was an avid reader and would read anything I could get my hands on; books were a massive part of my childhood.
I have fond memories of dressing up as my favourite characters on World Book Day and I was always proud of myself when I whizzed through another level of the Oxford Reading Tree books at school. So as you can imagine, when I received a Blue Peter badge for being a runner-up in its national reading competition, I wore it like a medal of honour and showed it off, big time.
I’ll admit, I was, and still am, a bit of a literacy geek. To this day, I still love the thrill of getting gripped by the twists and turns of a good book.
But how does this have any relation to data science and business success? Well, a book is only read by someone who knows how to read.
You may not be a fan of reading for pleasure, but if reading as a fundamental skill wasn’t taught in the UK right from the early years of primary school, everyday situations that you take for granted would be impossible. Therefore, you’d be at a significant disadvantage.
How would you know which way to turn if faced with a sign at a junction? How would you know how much medicine you’re supposed to take to cure your cold? How would you fill in a job application in order to earn a living and pay your bills? You get the point.
Like words on a page, data alone isn’t inherently valuable. There’s lots of it, but being able to understand and derive meaning from it is where the true value lies.
However, according to our business intelligence (BI) partner, Qlik, 76% of key business decision-makers aren’t confident in their ability to read, work with, analyse and argue with raw data.
These abilities are more commonly known under the umbrella term ‘data literacy’ – a skill that is becoming increasingly vital in business environments as the fourth industrial revolution continues to change the way in which we live and work.
Today’s world is data-driven and organisations that champion data literacy are ultimately placing themselves at an advantage above those who don’t.
Why use business intelligence?
The term business intelligence is better understood now than ever before. BI tools help you to analyse data to not only understand your business performance, but to improve it. Good data management policies are essential if you’re aiming to turn your data into insights.
The Data Literacy Index
In a recent global study commissioned by Qlik on behalf of the Data Literacy Project, exploring the relationship between data literacy and the value it can add to businesses, the findings identified a clear correlation between company performance and workforce data literacy.
The Data Literacy Index was created as a result of the research, forming a model that ranks companies against ‘Corporate Data Literacy Scores’ based on the performance of an organisation against three core pillars of corporate data literacy – data literacy skills, data-driven decision-making and data dispersion.
One of the key findings revealed organisations that ranked in the top third of the Data Literacy Index were also associated with a 3-5% greater enterprise value.
Additional statistics from the study also found that improved corporate data literacy positively impacts other measures of corporate performance including gross margin, Return-on-Assets, Return-on-Equity and Return-on-Sales.
These encouraging statistics evidence that, when engaged with properly across all aspects of an organisation, data is a critical asset for a business to stay competitive.
Where businesses are falling short
It tends to be the case that companies who recognise the potential in data have catapulted head-first into implementing data and advanced analytics technologies, but have made minimal changes or improvements within their organisations to allow them to get the most out of their investment.
Widespread data skills are yet to exist across today’s workforce and very little encouragement or incentive is offered towards data-driven decision-making from a senior management level.
In fact, data-driven decision-making scored lowest out of the three core areas measured by Qlik’s Data Literacy Index study. This highlights that, although companies may have data-literate employees across every department, it’s likely that they’re not turning unstructured data sets into actionable insights as effectively as they could. Only 8% of firms have made major changes in the way the data is used over the past five years (Qlik).
Although, promisingly, companies are recognising the need for increased data literacy, with 63% of large businesses surveyed planning on increasing the number of data-literate employees.
Understanding business analytics
Adapting to a modern way of working, with data at the core of your operational thinking, can mean a significant shift in mindset. It’s not enough to invest heavily in data mining or big data analytics technologies if data and analytics are not incorporated into your core strategic vision.
Only then can business processes be developed to work in harmony with powerful technologies, such as Qlik Sense, that will allow you to uncover the value that lies within your business’ data. Qlik utilises predictive analytics, powerful data visualisation and machine learning analytics techniques to take your BI operations to the next level. Qlik acts as your data warehouse, bringing together data from multiple disparate sources to uncover insights.
Investing in training is also a must if you want to encourage and increase data literacy across your organisation, although this doesn’t have to come at a substantial outright cost to your business as there are tonnes of free resources and courses available via the Data Literacy Project and Qlik’s online classroom. Giving employees the opportunity to invest timeinto improving their skills will prove the most valuable investment in bolstering your corporate data literacy as a whole.