It has become one of the most important concepts in the world of business across the globe. First coined by Kenneth Cukier and Victor Mayer-Schöenberger in 2013, datafication replaces sampling techniques has become pivotal to companies that need and rely on data — which, today, is nearly all, if not all of them.
Leveraging and managing data effectively is, after all, an extraordinarily important process in the business landscape. In fact, it is more than just a singular process — it is infused in every single operation. From decision-making to goal-setting, it is part of everything we do to keep our businesses moving and thriving. Continuous data collection is essential. How, then, can you and your team make it part of your organization?
What Is Datafication?
Datafication means that a business’ processes, behaviors, and activities, as well as those of its users and customers, can be transformed into quantifiable, usable, and actionable data. This data collected can then be tracked, processed, monitored, analyzed, and leveraged to improve an organization and the services and goods it provides to consumers. It also means that raw data is made all the more usable in a specific data format.
Datafication involves behind-the-scenes operations and processes — those consumers are largely unaware of — translating them into meaningful data analysis to make the business a fully data-driven operation. And with tools like artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), associated smart devices, and, of course, Big Data, it is becoming the foundation of a business’ very success.
5 Chief Benefits of Datafication
With the foundational understanding of datafication and the importance of data gathering, it’s probably pretty evident how instrumental it is for businesses today, especially in the real of data buyers and data brokers. But what are the tangible benefits that organizations can reap from embracing this trend and what new business models does it foster?
Let’s delve into the top five advantages that datafication brings to the table.
#1 Gain Insight Into Your Processes
Raw data itself is difficult to analyze. But datafication transforms unstructured, incomprehensible information into actionable insights, allowing you to gain insight into your processes and procedures — the ones that are the foundation of your organization using predictive analysis.
#2 Facilitate Digital Transformation
Digital data transformation is quite the technological trend these days. But it is far more than a passing trend — it’s becoming increasingly important for all businesses that want to keep up with the current landscape and remain relevant in the modern world.
#3 Improve Efficiency
Thanks to datafication, your business will have a greater understanding of what you’re doing and how you are doing it. This generated data primes you to make better use of your resources — including your employees themselves — and increase productivity and efficiency.
#4 Manage Information
We have already underscored the huge amount of customer data you, as a business, are generating and collecting every day. Fortunately, datafication allows you to manage and ensure data protection. You won’t just be storing it — you will also be able to access it and derive meaning from it.
#5 Apply It Across Industries
Many types of industries and organizations leverage datafication, and with good reason. Just some examples of the departments, fields, and niches that are using datafication are:
- Human resources (HR)
- Marketing and advertising
- Customer relationship management
- Government
- Real estate
- Finance
- Insurance
- Retail
- Research
- Entertainment
All of this is to say that it’s not limited to a particular sector — you can apply it pretty much universally.
What Does Datafication Look Like in Real Life?
Social media platforms monitor and collect customer data on users to tailor content and advertisements to their behaviors and interests — while simultaneously influencing our tastes and day-to-day interactions. Using the principles of data science, Internet streaming media providers analyze digital data to offer personalized content. Financial institutions utilize computerized data for more accurate lending decisions.
Human resources specialists and recruiters, informed by social science research, can use personality tests, but in many scenarios, datafication might replace personality tests. It’s also set to serve as the backbone of smart city development and improvement.
And the list goes on. As you can see, datafication, through its statistical analysis, is serving us all and using the collected data generated for a range of purposes. It is a technological trend turning industries on their heads and is primed to radically transform the way we do business and grow our organizations forever.
Will datafication benefit your organization? The answer is almost certainly a resounding yes — as long as you implement it responsibly and practically.
