Lack of Data Literacy still a major loss for businesses

For us as data enthusiasts it may be hard to imagine, but a new report from The Data Literacy Project shows that a lack of data literacy is one of the biggest sources of loss for businesses. In this blog you can read more about the report and the importance of data literacy.

The Human Impact of Data Literacy

When you talk about data literacy, you are talking about the ability to interpret data and base decisions on it. A skill that is of great value to a company. However, the report 'The Human Impact of Data Literacy' by The Data Literacy Project shows that only 32% of business decision-makers indicate that they are able to extract value from the available data, and only 27% say they are able to make decisions based on their data. Worrying figures, because it means that the vast majority of decision-makers in the business world base their decisions on non-factual factors (gut feeling) and worse still: that they see no demonstrable added value in the data available to them.

If we also see that 60 to 73% of all business data is never analyzed at all, you start to wonder what we're all doing wrong. Are we looking at the wrong data? Or do our managers not understand what they should be looking at? Maybe we're not explaining it well enough, or are we looking at the wrong data? A missed opportunity either way, because at companies that lead with data, net value is typically 3-5% higher.

Data is a goldmine

Data is a potential goldmine. But not one that's easy to mine, it turns out. Because managers aren't the only bottleneck: at the employee level, only 21% say they trust their own ability to interpret and work with data. And even for companies that make it their mission to become data-driven, that's not automatically a guarantee of success. Trust in the quality of data is generally low, and only 37% of employees say they trust their decisions more when they are based on data. In fact, almost half of employees say they base their decisions primarily on gut feeling.

So companies mainly work on feeling. And three-quarters of employees say they feel overwhelmed or unhappy with the amount of data. So much so that, on average, they lose more than an hour a week avoiding or evading data-related tasks.

Data is everywhere. And sometimes there's so much that you almost drown in it. At E-mergo, we've known that for a while, of course. But we're also convinced that data isn't a problem but an opportunity. A potential goldmine for whoever can master their data well.

Technically, the solutions have been available for years, and have already been successfully introduced at many of our clients. But then where does that enormous added value stay? That solution ultimately doesn't lie in the technology, but in the ability to work with it. Having data is one thing, understanding the data is another. And here we see the differences growing. The eternal Excel lists, the endless reports that need to be sifted through in search of that one small difference. There is no shortage of data, there is a shortage of interpretation. Many companies stop when the data matches what they see in reality. But a representation of reality is still nothing more than that. It's about how you use that representation to generate insights you can then act on. Not by plowing through endless lists, but by defining what you're looking for and letting the tool find it. Not endless reports, but clear KPIs you can actually steer by. And of course you ensure data visualizations that give you insight into what you want to know instead of delivering a puzzle to solve.

It sounds so easy, but clarifying data may be even harder than making data available. A bit like crude oil: if you start digging in the right place, you might find oil. But before you can run a car on that oil, you'll need to carry out quite a few processing steps before the engine wants to run on it. Burying your company's employees under data is demonstrably counterproductive. But give those employees the right training, tools and visualizations, and suddenly you'll see the processes in your company improve, your costs and downtime decrease, and your profit increase.

Get started with Data Literacy

New technologies in the field of data and analytics are emerging faster and faster. As a result, more and more data is becoming available to employees across all kinds of departments. Being able to interpret this well in order to extract value from it is therefore becoming increasingly important. That's why it's important that as a company you don't fall further behind and make a start on developing data literacy within the organization. E-mergo can offer support in this area in the form of data literacy workshops, training and help with a data strategy. Schedule an appointment with us via the button below to discuss the possibilities for improving data literacy. Want to know more about the research? Download the full report below.

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This blog was written by Louis de Roo
Data Strategy Leader at E-mergo