Why You Should Invest in Your Employees' Data Literacy
What Is Data Literacy, and How Should You Invest in It?
Thanks to digitalization, large amounts of data are collected virtually everywhere or are generated as a byproduct. This can include customer data collected in a CRM system, as well as, for example, production data, banking data, or traffic flow data. This data opens up entirely new analytical possibilities and thus the potential to gain important insights that drive business success. As a result, companies that make decisions based on data analysis have a competitive advantage. To fully realize the potential of their data, companies must empower their employees to use data in their respective roles—across all departments and at all levels. For this reason, many companies are working to establish a data culture. However, for these efforts to succeed, all employees must be able to speak the language of data. They should possess data literacy.
What is data literacy?
Data literacy is the ability to handle data competently. This includes skills in:
- Collecting and gathering data
- Managing and adapting data
- Analyze and interpret data
- Evaluating data
- Presenting and visualizing data
- Application of Data
>>Data literacy is a skill that enables employees from all areas and levels of the organisation to use data to answer the right questions, build knowledge, present findings and make decisions.<<
Why are investments necessary?
Almost every company invests a great deal of money in collecting and storing large amounts of data. However, simply collecting data is not enough to generate added value from it, because that does not mean the data is actually being used and understood.
A data scientist extracts information from such large volumes of data, which can then be used to derive recommendations for action. To do this, he needs a wide range of skills. For example, they must be able to work with a wide variety of database systems, use interfaces, and analyze data. However, there are very few such specialists. It therefore makes sense to empower other employees to collect and analyze data as well. A self-service BI system, for example, enables all users to create their own reports and analyses by integrating source data from various databases. This allows companies to gain new insights from their data, correlate data sets, and explore them without burdening the IT department with time-consuming analyses. However, to truly gain meaningful insights from the available data, it’s not enough for employees to simply have access to such BI software. Rather, they must possess data literacy so they can understand which questions the system can answer and how the data can help them make decisions.
While most executives are convinced of the importance of data literacy, the reality is that the majority of employees lack sufficient data skills or feel uncertain about working with data. Even managers often have trouble understanding and working with data. However, data literacy training is frequently offered only to employees who already work primarily with data—such as data analysts. This can become a problem for companies if they assume that all employees possess data literacy skills.
Risks:
- A lack of data literacy can lead to incorrect decisions.
- Erroneous decisions erode trust in data, causing employees and managers to be less willing to work with data.
- A lack of data literacy causes analyses to take longer than necessary. As a result, opportunities may be missed. At the same time, this leads to higher personnel costs.
- Employees feel uncertain when working with data, which can lead to dissatisfaction.
Continuously invest in data literacy
Here's what you can do to make your staff data literate.
1. Train employees
Many BI systems are intuitive to use. Nevertheless, your employees should receive training on how to use the system. However, training should not focus solely on how to use the software; it should also provide employees with a basic understanding of data, its value, and how it is aggregated. This will enable your employees to critically assess data quality, identify correlations, and turn them into insights. If you want to unlock the full potential of your data, as many employees as possible from all areas of the company should acquire these skills.
2. Exemplify data-driven decision-making
Data literacy should always be an integral part of corporate culture. That is why it is important for leaders to set a practical example of data-driven decision-making. In this way, they show employees how data can support them in their daily work and how it can be applied. Managers should also continuously support, encourage, and motivate their employees in their use of data.
3. Measure data literacy
By measuring data literacy, you can assess whether your initiatives are successful. To do this, identify specific performance indicators that should improve as data usage increases, and regularly evaluate your progress. Also assess your employees’ skills and ask where additional support is needed. Since developing data literacy is an ongoing process—and technologies change regularly while new data sources emerge—this approach allows you to respond to evolving requirements.
Conclusion
To remain competitive, companies should harness the full potential of their data. This requires a cultural shift within companies, which can only succeed if employees and managers possess sufficient data literacy. Investing in data literacy pays off in the long run, as it enables better decision-making, creates competitive advantages, and also increases employee satisfaction.
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