Why data literacy could be worth $500 mn to large enterprises
Data literacy — or the ability to derive meaningful information from data — can significantly add to the market value of large enterprises, according to a study commissioned by business intelligence firm Qlik.
As part of its newly-launched Data Literacy Project, Qlik estimated that higher corporate data literacy has the potential to boost a firm’s enterprise value by $320-534 million.
According to the study, there is a gap between how companies perceive the importance and relevance of data and how they are actively increasing workforce literacy.
While 92% of business decision-makers believe it is important for employees to be data literate, just 17% report that their business significantly encourages employees to become more confident with data.
To create a 'Data Literacy Index', Quik surveyed 604 global enterprise business decision-makers in 10 geographies on their companies’ use of data and approach to data literacy.
When correlated to measures of corporate performance, organisations that rank in the top third of the Data Literacy Index have 3-5% higher enterprise value, the study showed.
“The findings of the Data Literacy Index merely highlight why business leaders across industries need to take charge of the data evolution of their organisations and the significant value that data literacy brings to the organisation,” said Arun Balasubramanian, managing director at Qlik India.
“Only by empowering their employees with data literacy can they realise the greater business value and continue to thrive in a fast-changing, hyper-competitive business landscape,” he added.
The majority of business decision-makers feel it is vital for employees to be data literate, but just 24% of the global workforce reports being fully confident in their ability to read, work with, analyse and communicate with data, the study shows.
While two-thirds of companies (63%) are planning on hiring more data literate employees, the onus is invariably on the individual. Business leaders have been largely unwilling to commit resources to improve the data literacy of their workforce, with only 34% of firms currently providing data literacy training, and only 36% willing to pay higher salaries to employees who are data literate.
Nearly all business leaders acknowledge that data is important to their industry (93%) and in how their company currently makes decisions (98%). But just 8% of firms have made major changes in the way the data is used over the past five years.
Europe holds the highest data literacy score of any region, with the UK, Germany and France among the most mature nations for corporate data literacy.
Asia-Pacific recorded the highest region-wise progress in the last five years – moving faster than the US, Europe, the Middle East and Africa.
Singapore emerged as the most data-literate nation globally, with the highest Corporate Data Literacy (CDL) score of 84.1 compared to 81.3 in the United Kingdom and 72.6 in the US.
Within Asia-Pacific, India had a score of 76.2, Australia had a score of 72.4; while Japan had a score of 54.9. The banking and finance industry led the way in terms of achieving the highest average CDL score in Asia Pacific.
There were far greater differences in corporate data literacy between industries than between regions. The healthcare, retail and real estate industries under-performed on data literacy (with respective data literacy scores of 67.1, 69.2 and 70.7), while the administrative, technical services and finance industries performed more consistently (81.1, 80.2 and 77.4 respectively).