Why Is Data Literacy Important for Businesses?

Why Is Data Literacy Important for Businesses?

In the hopes of unveiling sophisticated insights, more companies are beginning to collect data.

But the big problem that stands in the way of those insights is a lack of data literacy.

This article breaks down what data literacy is and why it’s important for every business.

What is data literacy?

Data literacy is the ability to read, understand, communicate, analyse, and extract useful insights from data in context. But just like any language, it’s only useful if everyone is able to understand it.

Take an employee that works in the operations team, for example. If he is in a meeting with the marketing team who do not understand any operations lingo, they will not be able to participate and contribute any solutions.

Similarly, if only a handful of people in the company are data literate, this limits discussions, ideas, and solutions from many employees who struggle to make sense of data.

Why is data literacy important for your business?

  1. Improves efficiency

Data-literate employees can read and understand data on their own without waiting for data analysts to interpret it for them. Doing so removes a major bottleneck and streamlines efficiency.

These employees can use data to influence their day-to-day decisions put into context of the company’s larger strategy, and contribute to overall company performance.

  1. Debate using facts

When you’re forced to look at the facts and statistics of the data, it allows for a more structured conversation that takes personal feelings out of the discussion.

Data literacy allows people to facilitate constructive debates using data, as it gives employees evidence to support their case instead of heated discussions based on emotions.

  1. Make data-driven decisions

Data literacy is essential in making data-driven decisions that are effective and will save your company valuable time and resources.

For example, instead of guessing whether your marketing strategy will work, data on buyer behaviour and demographics can help you decide on the most effective marketing plan. It’s no longer a skill reserved for data analysts alone.

  1. Reduce data breaches

Research has found that 40% of data breaches are caused by internal employees.

Employees that are data literate will understand how to handle data appropriately, which will reduce the number of data breaches.

The Bottom Line

Not everyone needs the data fluency of a data analyst. However, some basic level of data literacy is crucial for every employee.

This way, you’ll be able to invite new ideas to the table and foster constructive debates that lead to new innovation. It’s for this reason that by 2023, data literacy will become essential in driving business value.

Learn more about how our data experts at Polar Packet can turn your raw data into actionable information that you can rely on.