Future Enterprise

Five Things You Need to Know About Data Literacy

Define data literacy in the future of intelligence and learn how higher data literacy has a significant impact on business metrics.
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What is Data Literacy?

The most basic dictionary definition of literacy is one’s ability to read and write, but I like UNESCO’s definition of literacy better for our purpose of finding out what data literacy is. UNESCO defines literacy as the ability to identify, understand, interpret, create, communicate and compute, associated with varying contexts, allowing individuals to achieve their goals and participate fully in their community and wider society. Data literacy includes the following four abilities:

  • Reading data involves understanding what data is, and what aspects of the world it represents
  • Working with data involves creating, acquiring, cleaning, and managing it.
  • Analyzing data involves filtering, sorting, aggregating, comparing, and performing other such analytic operations on it.
  • Arguing with data involves using data to support a larger narrative intended to communicate some message to a particular audience

Source: MIT professor Catherine D’Ignazio and research Scientist Rahul Bhargava

So, if you have access to look at data and have dashboards or reports, does that make you data literate?

My answer is no – not if you aren’t able determine if you have access to the data you need, if you aren’t able to meaningfully interpret the data, and not if you can’t use that data in the decisions that you have to make. Data literacy also involves being able to communicate and collaborate with data. It is important to be able to summarize data, identify salient patterns and be able to act on those insights effectively. Dashboards and reports only deliver information and a lack of data literacy can result in poor outcomes based on incorrect analysis of this information.

Does that mean data literacy is the domain of data analysts, data scientists or the business intelligence team?

Again, my answer is no. Everyone in an organization can benefit from data literacy skills. In a July 2021 IDC Future Enterprise and Resiliency Survey, data literacy skills (analytical skills, ability to see the big picture, and the ability to work with data) were the top three non-technology related skills desired by enterprises. In speaking with industry leaders on this topic, executives and academics highlight the importance of human skills like the ability to tell stories and being able to communicate ideas clearly regardless of the role in the organization. These executives mentioned that they particularly desire those skills in recruiting new hires. Having the curiosity to understand what the data is telling us, making connections with other data, not being afraid to experiment with data, and having the confidence to understand and use data appropriately are all skills that contribute to data literacy. Data literacy is not only about latest tool or technology or having a knowledge of mathematics and statistics, it is about having the mindset of finding answers to questions that arise in the minds of your workers.

Who needs to be data literate in the organization?

The obvious answer to that is everybody, but the reality is that it is not easy. Data from IDC’s August 2021, Global Future of Intelligence survey shows that just 21.0% executives, 20.7% managers and 14.7% workers were rated to be completely data literate. In IDC’s Data Culture survey from December 2020, only 30% of respondents said that actions at their organization were data-driven to a large extent. The lack of data literacy is often a result of a data culture that does not value data-driven decision-making – in fact in the same survey, only a third of organizations said that they had leadership and culture that valued data-driven decision making. This was corroborated by an executive in a Fortune 100 health insurance provider that I interviewed. According to him, it is vitally important that leadership in organizations role model data literacy. Another lesson on data literacy from interviews with leaders across industries, is that organizations need to have the ability to be self-reflective. They have to be aware of their shortcomings with the use of data and have to make a concerted effort to improve their data culture.

Higher levels of data literacy have a significant impact on business metrics. IDC’s 2021 Future of Intelligence Survey showed that almost 2X as many organizations that reported the highest data literacy saw improvements in revenue compared with organizations with the lowest data literacy.

How can you increase data literacy in your organization?

Understand the challenges that your organization faces with respect to data literacy.

1) Culture: Many organizations closely guard access to data regardless of the sensitivity of the data and historically have provided data access only to higher levels of management. Does a cultural shift need to occur in your organization where it can give access to data (assuming all regulatory and governance policies are maintained) to a broader set of employees? For a report on the dividends of data culture, look here.

2) Observe: Ensure that your workers are empowered with the skills and know and understand the data and examine their actions to ensure that there are no ongoing gaps. Identify people that are data leaders that can educate others and champion the use of data among their peers. Encourage individuals and teams to take time to reflect on decisions made, actions taken, and outcomes achieved.

3) Technology: Does your organization have the technology platform to enable and govern access to data that all levels of the organization need to make their decisions. Look at the blog on Data Control Planes to learn more on set of such technologies. Many organizations are siloed not only in their structure but also in the sources of data. Determine if you can break down silos and allow intelligence to flow freely in the organization.

Join IDC’s Chandana Gopal in our Oct. 12 webinar titled: “Why Every Executive Should be Focused on Enterprise Intelligence Now”. Learn about new capabilities and new metrics that leading enterprises are adopting to increase their enterprise intelligence and drive value for their customers, shareholders, and employees.

If you would like to learn more about the Future of Intelligence or other IDC’s “Future of X” practices, visit our website at https://www.idc.com/FoX.

Chandana Gopal

Research Director, Future of Intelligence