Data is now used in so many aspects of our organisations that it has become a competitive differentiator. Data is used for forecasting and scenario modelling and to understand behaviours in our customers and staff along with many other elements of our organisational life. Organisations have spent hundreds of thousands of pounds on systems for data collection, data analysis and data presentation, often rebuilding much of their underlying technology infrastructure along the way. Despite the investment and the effort, there are still some organisations who appear to be streets ahead of their competitors.
What is the cause of this difference?
A large part of the difference is, quite simply, the data maturity of some organisations compared to others. Some of this reflects in technology choices, with a great many organisations still regarding spreadsheets as their primary source of data analysis but much of it is caused by the approach organisations take to using the data they gather across the organisation as a whole. There is also the question of the overall approach of an organisation as there are many places where data gathering, analysis and decision making is operating very effectively but only in certain parts of the organisation and not as part of the core organisational culture.
Great data use requires a coherent strategy supported by a well-defined roadmap and clear operational models across the whole business but none of these will succeed unless there is a clear programme of data literacy in place within the organisation. In late 2020, Gartner published The Future of Data and Analytics: Reengineering the Decision, 2025 in which they observed that ‘decisions are becoming more connected, more contextual and more continuous’ and indicated that organisations would need to comprehensively review their data and decision making so that it becomes a ‘competitive differentiator’.
There are several key factors that help determine the maturity of an organisation in respect of their approach to data and data driven decision making. Arguably the most crucial factor is whether the overall organisational strategy encompasses the data strategy.
If data is not at the heart of the organisational strategy, then it will likely never become an embedded element. Having data at the heart of the strategy only works effectively if there are two other factors working well: the insights gathered from the data are shared across the organisation. Data democracy is key because many eyes on the data will yield more rounded opinions and, therefore, decisions. Data democracy, however, is only useful if there is widespread data literacy. In short, there is no point in sharing data across an organisation of the recipients have not been encouraged and taught to understand and interpret it.
Data comes from many sources in any organisation: it comes from employees, partners, customers, data feeds, devices and machines. The number of available data sources can actually be overwhelming, and part of a successful data strategy is identifying what is relevant and useful and what is noise otherwise organisations can become flooded in a tsunami of irrelevance. This again points to the need for widespread programmes of data literacy. We will only succeed in identifying relevant data by training our staff to understand how to collect, analyse and use data effectively. Research has shown that between 60% and 73% of all enterprise data is never analysed and this is likely because there are not enough trained people noting what is available and being in a position to evaluate, accept or reject the data. While we are not looking at data, we are collecting it, and potentially missing a treasure trove of relevant data whilst making decisions based on limited, stale data simply because that is how we have always made decisions or lack the tools to support data driven decisions.
When data has been identified, that does not automatically mean that it is a simple step to gather, analyse and present it. In many organisations data is located in siloes, isolated from other data sources and difficult to gather together and analyse as a single structured whole. Technology can be a significant part of addressing this issue by creating data lakes and other merged data sources where previously siloed data can be used effectively.
Selecting technology and tools is a step in the right direction, however the benefits and value are reduced significantly when simply buying tools without ensuring the users are well trained in their use. If users are not trained and well versed in the shift towards more data driven decisions, then their role in data driven decisions will lessen the value back to the company nor the clients that you provide products/services for.
Data literacy is critical because without fundamental understanding, no technology or tooling will succeed, and no amount of leadership talking will yield results because the wider employee base will default back to spreadsheets and instinct. Many organisations do build highly trained data centric teams of skilled analysts but creating the data is half of the story. To consume data effectively, employees need to be data literate. Data literacy is a foundational skill in modern organisations and if we do not address this as part of our overall data journey then we will fail to gain the competitive edge we are all seeking.
As with many initiatives that are aimed at driving widespread cultural change within an organisation, arguably best way to gain traction and drive wider behaviour is for leaders to demonstrate how they use data for decision making and to share the data and the decision making process with the organisation as a whole. Using this cascading approach will lead to management layers starting to use data for reports up into the leadership and for making decisions that are again shared with the wider workforce.
However, there is no escaping the need to properly educate all users on understanding data. Never assume that just because you say a piece of data supports a perspective that all staff agree and understand. Training and development programmes for data literacy should be regarded as essential. This is too important an aspect of business operations to be left to chance.
How do we measure whether an organisation is data ready? We need to examine the four areas we have identified as an overall view: we need to take the strategy, the data sources, the technology and the data literacy and evaluate them to help us understand where we are. When we have this four-dimensional view of our organisation then we can start to determine where to make our next investments to yield the results we need for competitive advantage. Only when we understand the interconnects and the trajectories each of these four is on will we be able to better understand our overall data maturity as an organisation and have a good perspective on our data driven future decisions.