Lack of data literacy still a major loss for businesses

It may be hard for us data enthusiasts 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

76% of top business decision-makers have little confidence in their ability to read, analyze and discuss data

– The Human Impact of Data Literacy

When we talk about data literacy, we mean 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 say they are able to derive 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 considerations (gut feeling) and, even worse, that they see no demonstrable added value in the data they have available.

60 – 73% of all company data is never analyzed

– The Human Impact of Data Literacy

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

Data is a gold mine

Data is a potential gold mine. But not one that is easy to mine, it turns out. Managers are not the only bottleneck: at employee level, only 21% say they are confident in their own ability to interpret and work with data. And even for companies that make it their mission to become data-driven, that is no 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 they lose more than an hour a week, on average, avoiding data-related tasks.

Data is everywhere. And sometimes there is so much of it that you almost drown. We at E-mergo have of course known that for some time. But we are also convinced that data is not a problem but an opportunity. A potential gold mine for those who can master their data.

There is no lack of data, there is a lack of interpretation

On the technical side, the solutions have been available for years, and have already been successfully introduced at many of our customers. But where is that enormous added value, then? The solution ultimately lies not in the technology, but in the ability to work with it. Having data is one thing, understanding it is another. And this is where we see the differences growing. The eternal Excel lists, the endless reports that have to be combed through in search of that one small difference. There is no lack of data, there is a lack of interpretation. Many companies stop when the data matches what they see in reality. But a representation of reality is still no more than that. What matters is how you use that representation to generate insights you can then act on. Not plowing through endless lists, but defining what you are looking for and letting the tool find it. Not endless reports, but clear KPIs you can actually steer on. And of course you make sure you have data visualizations that give you insight into what you want to know instead of delivering a puzzle.

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 may well find oil. But before you can run a car on that oil, you have to do quite a lot of processing before the engine will even start. Burying your company's employees in data is demonstrably counterproductive. But give those employees the right training, tools and visualizations, and suddenly you see the processes in your company improve, your costs and staff turnover decrease and your profit rise.

Getting started with Data Literacy

New technologies in the field of data and analytics are emerging ever faster. As a result, more and more data is becoming available to employees in all kinds of departments. Being able to interpret it well and extract value from it is therefore becoming increasingly important. It is therefore important that, as a company, you do not fall further behind and make a start on developing data literacy within the organization. E-mergo can support you with this in the form of data literacy workshops, training and help with a data strategy. Schedule a meeting 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.