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• Data Governance

04 Mar, 2022

Why improving data literacy could be key to better data governance?

Unlike natural resources, data is ubiquitous and exponentially growing. It can be generated by a click, a swipe, a share or even manufactured (synthetic data). Data holds together our supply chains, drives marketing leads down the funnel, powers AI to discern our preferences and serves as the backbone for industry and society. The global data creation is expected to exceed 180 zettabytes by 2025*¹. Research suggests that, by 2022, 90% of corporate strategies will explicitly mention data as a critical asset*².

Vast amounts of data collected by organisations is raw and unstructured, lacking a clearly-defined objective – never mind governance framework. This can lead to increased risk, data exposure, reputation damage, non-compliance, and financial penalties - through reduced revenues and regulatory fines.

Lapses in effective data governance have led to some eye-watering financial penalties of late:

• The Office of the Comptroller of the Currency (OCC) issued a fine of $400 million to Citibank in 2020 related to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls
• The Swedish fashion retailer H&M faced a €20 million fine in 2020 for violations in employee monitoring capturing and disseminating sensitive data which was subsequently used to make employment decisions.
• Italian telco TIM was also hit with a €27.8 million fine in 2020 for a series of violations associated with unsolicited marketing, bypassing the accepted opt-in rules. The company’s biggest error in judgement was that many of the campaign recipients were registered on non-contact or exclusion lists.

Each of these issues could have been avoided by establishing and communicating a clear data governance framework to support staff in their decision making and customers in the legitimate, responsible, and secure use of their personal data. And, for that to be done effectively requires building and communicating a robust data governance strategy.

So, if governance is about accountability, control, integrity and safeguarding of data, where does literacy come in and what role does it play in the world of data?

Putting a spotlight on data literacy

Data literacy feels like a new term to many of us, yet it was coined back in the last century. Today it’s a prerequisite for navigating the world of work, or leisure. We all need to read, write, and communicate data with confidence. No matter what someone's role is, they need a certain level of data literacy to comprehend company strategy, goals, objectives, and collective performance.

Organisations that invest in data literate employees are able to reap benefits around:

• Enhanced communication and collaboration

Better clarity around roles and responsibilities with cross-functional communication and collaboration of data eliminating confusion and breaking down silos.

• Better insights and organisational values

Being able to analyse, visualise and report on data enabling extraction of insights to deliver value by identifying trends and opportunities.

• Greater fairness and empathy

Ensuring the ethical use of data and reducing the risk of bias, being mindful of the impact of narratives, or visualisations

And the risks of being data illiterate, well operating in silos, poorer insights, and the potential for bias and unethical application of data.

So, what needs to come first?

We’ve had lengthy debates on this one. It all depends on your ‘specialist’ area. Process-driven, organisational types tend to vote for governance and processes, while the culture, change and strategy team tends to vote for literacy.

Putting comprehensive processes and procedures in place is not negotiable, but neither should be an effective plan for communicating any change, training, or engagement.

Organisations need to consider literacy as a fundamental element of data governance. As new initiatives can bring about major changes in existing practices and behaviours, it is crucial that everyone speaks the same data language across an organisation.

In the end we’ve whittled it down to three key priorities for organisations to effectively manage their data in 2022:

1. Know your data, it’s type and classification and understand how to and who can unlock its value.

2. Build and communicate a responsible approach to managing and storing data to reduce risk of non-compliance and broken customer trust.

3. Embed a culture of data literacy from the top down and the bottom up making it a crucial part of everyone’s role to foster engagement, collaboration, and innovation.

There is a fourth one too. Don’t rest on your laurels. Treat data as a living, breathing, constantly changing beast that needs to be regularly reassessed and tamed. We recommend reviewing your formal data strategy annually but ideally you need to be tracking governance and literacy in real time.

References

*¹ Statista
https://www.statista.com/statistics/871513/worldwide-data-created/

*² Gartner
https://www.gartner.com/en/doc/374107-predicts-2019-data-and-analytics-strategy