Data literacy is the ability to comprehend, analyze, and extract insights from data. In order to propel a business, data needs to be completely understood so learnings can be correctly applied. This means that future decisions will be based on fact and not gut feeling alone. Instead of just collecting the data, members of an organization can actually derive value from the data and identify new opportunities.
Although data literacy seems straightforward, it is possible that there is a difference in how data analysts and business users look at the data. This discrepancy can create a gap and misunderstandings throughout the company. If data is analyzed differently by various members of an organization, clear insights cannot be derived. This means that the data doesn’t hold the same amount of value that it can if everyone was on the same page. Actions may be erroneously taken and this can prove detrimental to a company.
In order to close the gap, the data users need to be educated on how to correctly look at and analyze the data. They should know exactly how the data was composed, who has used it, and where it originated. One way to align a company is to utilize a business glossary. This tool helps define terminology across business units and builds a company-wide business language. With consistent definitions utilized throughout the entire organization, everyone can understand data elements in the same way. This is especially important because teams may look at data in relation to their specific roles. By utilizing standardized terms across the company, data from various tools and platforms can be understood, even if the data elements are named differently.
Once all employees at a company have access to the data in the same way (i.e. in the glossary), they will be able to improve their data literacy. This allows them to ask the right questions, reason with the data, understand which data is relevant, and comprehend the context of the data. By presenting how vital data is to the company’s success, employees will be more inclined to interpret data and apply the insights to their specific departments.