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 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. 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 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.
Datafication involves behind-the-scenes operations and processes — those consumers are largely unaware of — translating them into meaningful information 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
You can probably already imagine that datafication offers numerous advantages to all types of organizations, large and small, across sectors. Here are some of the key reasons why you should implement it at your business.
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.
What are you doing well? What needs work? Or, what’s going well but could be done even better? Datafication means you will be better equipped to understand you and your business’ strengths, weaknesses, potential, and opportunities. It also gives you a view into the impact and effects of your initiatives, allowing you to assess what you’re doing and how you’re doing it.
2. Facilitate Digital Transformation
Digital transformation is quite the buzzword 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.
You can only take advantage of the latest, most cutting-edge technologies if you have usable data. Datafication is the ticket to improving your processes technologically and otherwise. Once you understand where you are, you will be better able to take the necessary steps to move forward and thrive through innovation.
3. Improve Efficiency
Thanks to datafication, your business will have a greater understanding of what you’re doing and how you are doing it. It will prime you to make better use of your resources — including your employees themselves — and increase productivity and efficiency across your organization. These qualities will, in turn, allow you to streamline your operations.
What does all this lead to? Increased profits, of course. As you improve efficiency and better leverage your resources, you will ultimately be making your business a much more profitable one.
4. Manage Information
We have already underscored the huge amount of data you, as a business, are generating and collecting every day. This will serve you well — as long as you take the necessary steps to manage it. Otherwise, it can be overwhelming. It could even just sit there and collect dust. And you certainly don’t want that to happen.
Fortunately, datafication allows you to manage data. As you gather together your information, datafication ensures that you are organizing it appropriately, thereby allowing you to use it successfully to make decisions. 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
- Real estate
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 data on users to tailor content and advertisements to their behaviors and interests — while simultaneously influencing our tastes and day-to-day interactions. Datafication is used by financial institutions to assess whether a client can be trusted to pay back a loan, thus assessing their lending worthiness and the associated risk.
Human resources specialists and recruiters can identify qualities and patterns in candidates’ behaviors, helping them determine what kinds of workers they will be. Datafication is also set to serve as the backbone of smart city development and improvement.
And the list goes on. As you can see, datafication is serving us all — 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.