The importance of data literacy and how to improve it
Written byLeon · Founder, CEO
The world’s most valuable resource is no longer oil but data (1). Today, almost every business has to make decisions based on data. Your organizations’ ability to gather, understand, and act on this data is highly impactful on the business. This article will discuss what data literacy is, its importance, and how you can improve it.
The importance of data literacy
Data literacy is the ability to read, understand, create, and communicate data as information.
Most organizations gather loads of data, but the collective skill of the employees to create actionable business insights on every management level will determine for a large part the organizational success.
The growth of the amount of information collected creates new issues. Because the amount of data gathered is increasing, the abilities required of people to handle it efficiently, effectively, and correctly increases too. Nearly 70% of the United States executives prefer candidates with data skills (2). Data from Deloitte showed that for 55% of companies, analytics improved competitive positioning, and 65% either made better decisions or started key strategic initiatives because of it.
How to improve data literacy
1. Leadership
Improving data literacy starts with leadership. There needs to be an emphasis on data-based decision-making and an effort to enhance data literacy.
2. Determine the gaps
Determine gaps that need to be filled. These are the most important ones:
Data gaps
Look for gaps in your data, and find ways to add these. Check for gaps in your market intelligence and gaps in your organizational data. Once identified, you should determine if these gaps are due to technology or skill gaps and address these appropriately.
Technology gaps
A perfect example of a technology gap is a website that focuses heavily on writing blog articles but has not got a keyword research tool. The only way to get all the data around keywords and search engines is with a keyword research tool. Not having a tool like that would be a significant technology gap.
Skill gaps
Besides basic mathematical abilities, understanding of the tools you are using, and critical thinking abilities, there is a certain skill set and methodology you need to do the correct analysis:
- The ability to ask the right questions
- Understand what data is relevant and how to test the validity
- Interpretation of the data
- Test hypotheses using A/B tests
- Create easy-to-understand visualizations to make the results understandable for leaders
- Build story + big picture to act on the results of the analysis
3. Culture of discipline
Do your employees have the discipline to make decisions based on data consistently? Once the education and processes are in place, it is up to the people in the organization to act on them in a disciplined fashion to compound the benefits of data-based decision-making and force the flywheel effect.
4. Technology accelerators
As mentioned in the book “Good to Great,” companies that consistently outperform competition use technology as an accelerator of growth. As a marketplace analyst, you could use data analytics tools to accelerate your growth.
e-tailize has built an extensive product management, advertisement management, and data analytics tool for marketplaces. This will help save FTEs, analyse your data, and increase revenue.