Data literacy: what is it and why is it essential for success?

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Business leaders looking to gain a competitive advantage can do so by prioritizing data literacy for employees in all departments and at all levels of their organization. With data literacy skills, employees better understand how business data works and how they can use it, enabling them to be more efficient and streamline organizational processes. Read on to learn more about what data literacy is and how to implement data literacy initiatives within your business.

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What is Data Literacy?

Data literacy refers to the ability to read, understand, communicate, analyze and extract information from data, while placing it in an appropriate context. Forbes defines data literacy as the “effective use of data everywhere for business actions and results”. Data literacy is often associated with data science, which uses analytical methods to extrapolate insights from data.

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Data literacy is generally considered an individual skill, but it is also an organizational skill. Pervasive data literacy helps organizations achieve better business results as they derive more value from their data.

With the growing importance of data literacy in organizations and the abundance of data, there is more emphasis on establishing data literacy training programs and appointing data managers to assess and improve permanently the data literacy in the organization.

Why is data literacy important to your business?

Data literacy skills are not only required by the analytics or IT team; all departments and roles within an organization can benefit from data literacy skills. Data literacy empowers employees to ask the right questions, collect the right data, and connect the right data points to gain meaningful and actionable business insights. It also ensures that all employees understand how to manage and use data in an ethical and compliant manner.

According to a recent Qlik data literacy survey of 6,000 employees, including 1,200 executives, 85% of business leaders believe that data literacy will be critical to business success in the future. The survey also highlighted that the majority of business leaders expect their teams to make a decision based on data.

Remarkable technological advancements have been made in the fields of machine learning, artificial intelligence and big data. However, there is a lack of knowledgeable professionals who have the skills to use data effectively. With proper data literacy training, organizations will have the in-house knowledge to optimize these emerging technologies for a variety of industrial and consumer use cases.

Data literacy is also important for user and customer experience. It enables faster decision-making, improved productivity, and data-driven critical thinking. Employees can use their data literacy skills to make their business processes more efficient, increase sales performance, and make other improvements to their jobs and responsibilities. These improvements trickle down to customers who benefit from higher quality products.

Data Literacy Examples and Use Cases

The following data management frameworks and tasks work best when the entire organization is comprised of data-savvy employees:

Data ecosystems

Data literacy is useful for establishing and maintaining a reliable data ecosystem, which can include physical infrastructure such as cloud storage or service space and non-physical components, such as software and data sources.

Data governance

Organizations use data governance to manage their data assets so that they are complete, accurate, and secure. Data governance is not the sole responsibility of any particular team; the entire workforce must have the appropriate levels of data literacy to contribute to its success.

Many organizations have a data policy that all employees must understand and follow. This includes how to access sensitive data, how to ensure data remains secure, and other data processes.

Data dispute

Data wrangling is the process of converting raw data into a more structured and usable format. Data management helps reduce errors in data. An organization may have individuals or automated software for data management, but every employee who works with any form of data also plays a role in keeping the data in an acceptable format.

Data visualization

Creating a visual representation of data, such as a table or graph, allows data professionals to more effectively communicate insights derived from data. The visualization can include infographics, tables, videos, charts, and maps. The creators of these visualizations and the stakeholders to whom they are presented need at least basic levels of data literacy to understand the implications of the data before them.

Important data literacy skills

The most basic data literacy skills involve knowing the difference between different types of quantitative and qualitative data, including nominal, discrete, continuous, and ordinal data. Being able to determine the source of data is also an important part of basic data literacy. Knowing the type of data and being able to assess its quality helps minimize data errors and biases and maximizes data understanding.

At a more advanced level of data literacy, individuals begin to recognize the nuances and limitations of data. For example, a survey question phrased in different ways can lead to dramatically different responses and qualitative data results. Likewise, data visualizations can be misleading. Data literacy helps professionals minimize misinterpretations of visual data because people who are data savvy can identify trends, gaps, outliers, and patterns in data.

Whether their general understanding of data is more basic or advanced, it is very important that employees understand data concepts that are relevant to their individual roles. For example, anyone working in digital marketing would benefit from understanding marketing data terms such as web traffic, page views, unique visitors, and impressions.


For organizations to be truly data-driven, technology experts must not be the only data masters; everyone in the workplace needs to develop data literacy skills to keep the business competitive and compliant.

Business intelligence experts and data scientists can mentor their peers to become data literate. However, it must be an organization-level commitment that covers all employees with data literacy training courses and other support resources.

Companies may not immediately see the benefit of providing data literacy training to all of their employees, but the long-term benefits are clear: people who are data savvy are able to question and expertly analyze the logic of data, applying their data-driven insights to each business. problem they are asked to solve.


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