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What is Data Literacy? Learn Why Data Literacy Is Important and What Companies Are Doing to Address It

Every day, it is estimated that nearly six billion search queries take place on Google, 350 million photos are uploaded on Facebook, and 333 billion emails are sent and received worldwide. As smartphone usage, social media activity, and IoT growth skyrocket day by day, the amount of data generated across the globe is absolutely staggering — and it only continues to grow.

What is Data Literacy? Learn Why Data Literacy Is Important and What Companies Are Doing to Address It

It is estimated a whopping 2.5 quintillion bytes of data are created every single day and more than 180 zettabytes of data will be generated every year by 2025. What’s more, some experts estimate that 90% of all the world’s data today has been produced in just the last two years. Mind-boggling, right?

Big data keeps getting bigger, and the opportunities for businesses to benefit from all this newly generated data also continue to grow — if businesses can successfully sift through endless reports to glean meaningful and compelling insights to drive decision-making. For that reason, organizations are quickly realizing that having the right business intelligence (BI) services and software in place to compile and analyze raw data is necessary if they want to stay competitive. But turning numbers in a spreadsheet into actionable insights? That’s a whole other ball game. And that’s where data literacy comes into play. 

What Is Data Literacy?

So, what, exactly, is data literacy? In simple terms, data literacy is the ability to comprehend and communicate effectively with data, which in most cases, will include the use of charts, graphs, infographics, and even video. It’s really the ability to know what to do with the heaps of data delivered to businesses via BI dashboards, spreadsheets, or reports, digesting it and crafting it into true insights that will drive educated decisions and business growth.

While it may seem simple, data storytelling is turning into quite an art form. There are dozens of data visualization tools and cloud-based platforms available to help businesses identify trends within large data sets and transform them into colorful graphics in a variety of formats. See some great examples of data literacy in action here

Why Is Data Literacy Important?

Companies across a wide variety of industries are recognizing that the ability to effectively harness the power of BI data can set an organization on a clear path to success. Great data storytelling can unearth invaluable nuggets of wisdom, enabling companies to make more informed decisions faster and giving them a leg up on the competition on everything from customer needs and behavior to emerging market trends.

Today, the number of businesses that consider BI instrumental to their organization continues to reach new highs. Statista estimates the market size for BI and analytics software applications will exceed $18 billion in 2025 — compared to its $15.2 million worth in 2020. As more companies incorporate BI into their business practices, the need for data literacy skills is growing. According to Enterprise Apps Today, 70% of organizations believe data visualization and discovery are essential to their business. 

While once considered a skill only needed for data analysts or statisticians, companies are realizing that data literacy is vital for employees across all departments, from HR to marketing to finance. Businesses are looking for new ways to empower employees’ success, giving them access to BI tools to help them make data-driven decisions on their own, without the help of data analysts to crunch the numbers or design an infographic for them. Consequently, data literacy is more important than ever. 

In fact, according to Gartner’s Annual Chief Data Officer survey, poor data literacy is ranked as the second-biggest internal roadblock to the success for CDOs. Gartner also reports by 2023, data literacy will become essential in driving business value, with more than 80% of data and analytics strategies and change management programs including a data literacy component. 

How Are Businesses Meeting the Need for Data Literacy?

Giving data to employees via a shiny new BI dashboard is great. But organizations are beginning to understand there is more to it than that. As BI continues to push its way to the forefront of every employee’s decision-making process, data literacy will be the key to unlocking the power of data. As a result, organizations are becoming more focused on fostering a data-driven culture. 

Many businesses are investing in the development of in-depth training programs to get employees up to speed on how to read, assess and generate value from the data they have access to. Companies like Bloomberg, Guardian Life Insurance, and Adobe, are developing their own internal “digital data literacy academies” to help employees level up their data literacy skills and keep pace with rapid technological advancements in BI.

To ensure all employees are on the same page, internal data literacy training may start with the fundamentals, like going over Excel basics and frequently used terms. From there, training programs may focus on more in-depth lessons and data literacy projects to build core skills, such as knowing how to ask the right questions, identify relevant data, test hypotheses, and — most importantly — tell a data-driven story that will resonate with decision-makers. 

Organizations are also doing their homework to employ the most reliable, user-friendly BI and analytics software. Adopting cloud-based tools that will keep manual tasks to a minimum and deliver faster, accurate answers to urgent business questions will allow businesses to achieve  their revenue and productivity goals.

Data Literacy Is Key to Business Success

To sum it up, big data means big opportunities for businesses — and data literacy will be key to turning those opportunities into big wins. 

Interested in learning more about data literacy and how to choose the best BI and analytics solutions for your business? Learn how Maven Wave helps enterprises unlock the power of data.

Want to know how data literate you are? Complete this quick assessment to find out.

July 8th, 2022

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