In business today, data is king. Being able to capture, collate, clean, analyze and derive actionable insight from information is the holy grail for so many organizations. Yet how many can honestly say they truly have control over their data, in the sense that value can be gleaned from every byte generated? The answer is apparently not as many as might be thought.
According to Qlik’s Data Literacy Index, 97 per cent of global business leaders recognize the importance of data. Yet there appears to be a struggle to translate that into action.
In fact, the Data Literacy Index suggests that less than half (47 per cent) of financial services firms provide data literacy training, while a similar number (46 per cent) of leaders in commercial industries, including retail, have not even heard of data literacy. Why does that matter? Because data literacy is the ability to understand what data is saying. Without it, it does not really matter if a business leader recognizes the importance of data or not – the organization as a whole is not going to be able to use data effectively.
The impact of that inability is significant, with half a billion dollars potentially at stake. The Index shows that large enterprises with higher corporate data literacy score have a 3 to 5% higher enterprise value (the total market value of the business), accounting for between $320 - $534 million.
It also has a more tangible effect on day-to-day operations, facilitating the adoption of emerging technologies that are having a proven impact on businesses’ abilities to operate. Globally, 18 per cent of enterprises felt that their data literacy significantly helped their integration of artificial intelligence (AI), with 16 per cent believing it supported their development of blockchain technology. With AI predicted to be worth almost $4 trillion to businesses by 2022, finding ways to more easily incorporate it is hugely important to companies now.
So, which are the sectors closest to seizing those opportunities? Financial services consistently leads the way: as well as training, the industry was most likely to pay more for employees with data skills (40 per cent), use data in all aspects of business process decision making (23 per cent), and significantly encourage employees to be more comfortable with data (21 per cent).
The services sector, which comprises of professional services, communications and healthcare services firms, also recognizes the vast importance of having a data literate workforce. Ninety four percent of services firms say that data literacy is important to their sector, and 42% of services firms claim that data skills is an important factor when interviewing potential hires. However, only 20% are currently significantly encouraging employees to become more comfortable with data.
In comparison, commercial firms were less likely to provide training (22 per cent), pay more (17 per cent), use data in decision making (6 per cent) or encourage employees to become more comfortable with data (3 per cent).
It is clear that more understanding, more education and more knowledge of the power of data literacy is required. While some sectors are making headway, others are struggling to invest appropriately. At a time when all industries are facing unprecedented disruption, being able to find a new edge or the marginal gains that data holds can be the difference between success and failure.
The potential for data literacy to improve a company’s performance is unquestionable. Those organizations that refuse or are unable to take advantage of understanding information effectively will struggle, and will find themselves being overtaken by those that have invested effectively.