Greater 'data literacy' means higher profitability, says study
Large enterprises that have higher corporate data literacy experience can expect $320 million to $534 million in higher enterprise value.
That is one of the findings of a new academic study commissioned by data analytics provider Qlik on behalf of the newly launched Data Literacy Project.
Data literacy is the ability of a workforce to read, analyze and use data to make decisions and communicate with data throughout the organization. As part of the study, PSB Research conducted a survey of 600 business decision makers worldwide in June and July 2018.
Despite clear correlation between enterprise value and data literacy, there’s a gap between how companies perceive the importance and relevance of data and actively increase workforce data literacy. While 92 percent of business decisions makers surveyed think it’s important for employees to be data literate, just 17 percent said their organization significantly encourages employees to become more confident with data.
The researchers created a Corporate Data Literacy Index, a rigorous model that scores companies based on the extent to which they have the necessary data and capabilities to use data for decision making. When correlated to measures of corporate performance, organizations that rank in the top third of the index have a 3 percent to 5 percent higher enterprise value.
Furthermore, improved data literacy seems to have a positive correlation with other measures of corporate performance, including gross margin, return-on-assets, return-on-equity and return-on-sales, according to the report.