What Is Data Literacy?

What Is Data Literacy?

Modern organizations have access to more data than ever before. But the inability to understand and interpret that data often prevents them from realizing data’s full potential for driving higher business performance.

Data literacy is defined as “the ability to read, write, and communicate data in context, with an understanding of the data sources and constructs, analytical methods and techniques applied, and the ability to describe the use case application and resulting business value or outcome.” Essentially, a data-literate organization knows how to use data effectively to achieve its strategic business goals.

Here, we’ll explore what data literacy is, its benefits and barriers, and how you can promote greater data literacy within your organization.

What Is Data Literacy?

Data literacy is essential to the success of modern businesses, and it involves learning the skills necessary for data-driven thinking and decision-making.

Because data literacy encompasses an individual’s ability to read, understand, communicate, use, and make decisions with data, data literacy skills can help those who aren’t data scientists or analysts to read and understand data—and to use it to inform their decision-making.

A data-literate organization recognizes data literacy as a functional skill. As a result, its employees are able, on varying levels, to leverage data in business use cases and think critically about the insights gained from data analysis.

Why Is Data Literacy Important to Your Organization?

Advancements in storage technology allow modern organizations to generate and store massive amounts of data. But no matter how much data your organization collects, it's of no use unless your employees know how to put it to work.

Gartner’s Annual Chief Data Officer (CDO) Survey shows that poor data literacy is the second-biggest internal roadblock to the CDO’s office and that by 2023, data literacy will become essential to driving business value.

For these reasons, data literacy is becoming increasingly important for executive leadership, managers, and employees who want to increase the value they bring to the organization. All business users need to understand the data that is available to them, how it can be used, and its limitations, as a lack of data literacy among your employees could limit your organization's ability to get value from its data and make data-driven decisions. Some call this creating “citizen data scientists” within their org—and the value in doing so is immense.

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Benefits of Data Literacy

The biggest benefit of big data is being able to leverage it to meet your strategic business goals, but that can’t happen if you don’t have a comprehensive view of your data. The following are some of the major benefits of investing in data literacy.

Data Literacy Improves Corporate Performance

Research by the Data Literacy Project shows that enterprises with a higher corporate data literacy score can have up to $534 million in higher enterprise value and improved corporate data literacy can positively affect corporate performance in other areas such as gross margin, return on assets, and return on sales.

Data literacy is the keystone to making data-driven decisions. Executives and other decision makers with high data literacy are better able to connect data for increased insight and intelligence and make more informed business decisions.

Data Literacy Empowers Employees

As shown by the Data Literacy Project, organizations that invest in the data literacy skills and knowledge of employees yield greater business results. Employees with these skills are better able to:

  • Ask the right questions of data to support their day-to-day tasks and departmental goals.
  • Apply techniques to derive insights from data and communicate their findings.
  • Improve the efficiency of operational systems.

When all employees understand how to use data, they can make a more meaningful contribution to the organization's overall objectives.

Data Literacy Provides a Solid Foundation for Data Governance

Both data literacy and data governance help organizations broaden access to data and maximize its value. Data governance refers to the systems, procedures, and policies used to manage data accessibility, availability, integrity, usability, and security in an organization.

If you don’t understand the data you have within the organization, you can’t create effective data governance policies. When policymakers can better understand and communicate with data, organizations can implement more effective data governance policies faster.

Data Literacy Supports Ethical AI

Artificial intelligence (AI) systems offer several benefits, including reducing human error, automating repetitive tasks, and solving complex problems. But they also bring potential risks and challenges, such as breaches in data privacy and AI bias. Data literacy is a key component of developing responsible AI.

Both data experts and non-technical business leaders play a role in evaluating the risks and fairness of AI systems. But to do this effectively, business leaders must have a minimum level of data literacy to weigh the benefits of an AI system and help identify high-risk use cases.

Barriers to Data Literacy

Unfortunately, barriers can exist within organizations that hinder the move to data literacy, including:

  • Data silos: Organizational departments often use different solutions for storing and analyzing data, creating data silos that make it difficult for organizations to get a comprehensive view of the data they have at their disposal.
  • Missing data context: The right context provides valuable background information on the data you collect. Context tells you the “who, how, what, when, where, and why” around your data. With context, you can answer questions such as “Why did sales drop last month?” or “Why are customers engaging on one channel over another?” Without it, interacting with data is more difficult.
  • Poor data quality: Duplicate, corrupt, or inaccurate data can lead to ambiguous and inaccurate patterns and insights. Using systems that automatically identify dirty data, incorrect data types, and questionable data can help you maintain good data quality.

How to Promote Data Literacy in Your Organization

Ready to increase data literacy within your organization? The following are some essential steps for getting started.

Create a Culture of Data Literacy

Organizational culture can be a barrier to achieving better data literacy. A culture where only a select few people make all the decisions—or where employees cannot connect the benefits of data literacy to the company’s success—may be hesitant toward a data-first approach.

To move toward a culture of data literacy, you need to align leaders around your data literacy goals and communicate the change to the entire organization. Help employees understand what data literacy means to them by providing training and helping them put what they learn into practice. Read “3 Steps to Enabling Citizen Data Scientists” to get started.

Bridge the Communication Gap

Communication barriers can prevent data from being used to its full potential. If employees don’t understand “data speak,” they cannot apply data insights effectively.

Identify those who are fluent in speaking the language of data and enlist them to translate for those who may be less literate. Also establish a common language for talking about data within the organization, avoiding jargon and imprecise terms that can create confusion.

Create a Data Literacy Program

Consider creating a defined data literacy program that empowers everyone from the CEO down to the newest intern with data literacy skills. This will help employees develop the skills and mindset to work with data and communicate its benefits.

Keep in mind that you don’t have to launch the program across the entire organization at once. You can implement it one business unit at a time, adjusting and improving with each iteration.

Lead by Example

Culture changes start from the top. Organizational leaders need to be data literacy champions, prioritizing data in their decision-making and daily operations. If employees are required to support product pitches, marketing strategies, and other decision-making with data, behaviors and attitudes toward using data will gradually change for the better.

Invest in Technology

Invest in technology that enables everyone to access, manipulate, analyze, and share data as required. Departments often use different solutions for storing and analyzing data. Data warehouses and data lakes can aggregate data from across the organization to break down data silos and clean up dirty, inconsistent data for more accurate data insights.

How Storage Can Improve Data Literacy Best Practices

In today’s digital environment, data is the driver of business success. Understanding the benefits of data literacy skills, its barriers, and how you can promote greater data literacy in your organization is essential to modern business success.

Find and follow your business value with Pure Storage® solutions. FlashBlade®, the industry’s leading unified fast file and object (UFFO) platform, offers fast and efficient scale-out flash storage perfectly suited for supporting your data literacy initiatives.

  • Modernize your data storage infrastructure to make it smarter and remove the barriers to data intelligence.
  • Power real-time analytics, AI, and machine learning for faster discoveries and insights with at least 10 times savings in power, capacity, and cooling costs over legacy storage.
  • Equip your teams with the right tools to tackle modern data challenges and leverage that data to make better and faster business decisions.
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