Home 9 Beatriz Figueiredo 9 Datafication: What It Is and How It Can Transform Your Business

Datafication: What It Is and How It Can Transform Your Business

Datafication may seem like an overwhelming process, and it's fair to say that it is neither quick nor simple. The point is to empower you and your organization with information to become a truly data-driven enterprise.
Daniel Zacharias

Beatriz Figueiredo

September 19, 2022

Netflix’s renowned algorithm is responsible for recommending streaming titles consumers might enjoy based on their viewing habits, preferences, and other information. How does the entertainment platform manage this feat? In part, it’s thanks to datafication. 

Far more than a buzzword, datafication has become a critical tool for businesses across industries. We live in an age where we are constantly generating data. With this in mind, companies should leverage this information to transform their operations and improve their value. 

What is datafication?

First introduced by Kenneth Cukier and Victor Mayer-Schöenberger in 2013, the term “datafication” responds to the idea that practically all businesses rely on data. The concept itself means that many aspects and areas of any organization can be transformed into data — data that is quantifiable, trackable, manageable, and conducive to monitoring and analysis. 

Therefore, the tools, processes, activities, procedures, behaviors, and other business components can be transformed into concrete information to make better, more informed decisions and set ambitious, achievable goals. 

By employing datafication, any organization has the power to become a data-driven business. In order to remain competitive, they must make it a priority. 

Examples of datafication

Data is all around us, and it’s not limited to work processes — you can find it everywhere, in our day-to-day lives. 

Many tools and devices datify everyday activities, such as:

  • Navigation via mobile phone GPS-equipped maps
  • Health-tracking via wearable technologies like Apple Watches and Fitbits
  • Entertainment recommendations from streaming platforms like Netflix
  • Social media websites targeting users with ads based on their personal and user data

Datafication applies to retail, healthcare, finance, human resources, marketing, real estate, government — and practically any other industry you can imagine.

So, let’s take a look at some specific examples of the concept in the business world.

Facebook Ads

Facebook Ads enable businesses to target users with specific demographics, such as interests, professions, locations, genders, ages, and more. This allows businesses to gain a wealth of important information about their target market and alter their campaigns and services accordingly.

Bank Loans

In finance, banks can use client data, such as credit scores, to assess their trustworthiness when determining the risk associated with lending to them. Predictive modeling allows them to anticipate whether the individual will be capable of paying back the loan.

Amazon Recommendations

Many platforms, including Netflix and YouTube, have finely-tuned recommendation engines that provide recommendations based on their users’ habits and personal details. Amazon uses datafication to deliver customized product organizations, using tools like artificial intelligence (AI).

How can datafication benefit your organization?

By datafying, you will set up your organization to better achieve its goals. The rewards of making this your strategy are abundant. For example:

  • You will gain better insight into your processes and procedures.
  • You will be able to assess employee productivity and habits. 
  • You can identify any pipeline weaknesses, such as lags and inefficiencies.
  • You will modernize your enterprise.
  • You will gain oversight over your organization’s information.
  • You will be equipped to improve and resolve hiccups. 
  • You will gain a competitive edge.
  • You will spur digital transformation and acceleration.

How do you “datafy” your organization?

Evaluate your current processes.

Begin by closely examining the different facets of and tools within your organization. Remember that this is not limited to technology — datafication applies to a wide range of processes and procedures. Consider, for example, your business workflows, how and where your store information, and other components. Take a broad view of individual departments and your organization as a whole entity. 

At this first stage, you should also formulate goals for your datafication endeavor, reflecting on your objectives.

Start with small components.

It’s tempting to attempt to tackle everything at once, but datafication is a slow process, that will take time to achieve meaningful results and gain valuable insights. Start small, thinking about which areas would most benefit from datafication and where your best sources of information lie. 

Choose the most appropriate technologies.

Datafication involves many tools and technologies, including the Internet of Things (IoT), artificial intelligence (AI), Bluetooth beacons, and more. Not every tool is appropriate for every organization. To maximize the rewards of your project, take some time to learn about the technologies available, ask for recommendations, review your initial analysis, and select the best means of datafication for your brand.

Create a centralized repository.

Almost every organization undertaking a massive data-related initiative will need some sort of centralized repository, like an enterprise resource planning system (ERP). It will act as far more than a storage platform — it will also generate invaluable analytics and reporting that will make it far easier to track your efforts. Additionally, everyone can access it — although you can restrict permissions — and find the tools they need to participate in the datafication efforts.

Continue to monitor and analyze your data.

This is an ongoing effort. You will need to monitor progress, analyze your data, and maintain close oversight over how your organization generates, uses, manages, and accesses information. It would be best if you kept prioritizing data collection and evaluating your information while deriving meaningful insights that you will utilize to improve the organization and your services.

Datafication may seem like an overwhelming process, and it’s fair to say that it is neither quick nor simple. That said, it is an essential set of activities you should undertake across nearly every industry. There are also many experts to assist you with your efforts, offering guidance and undertaking some of the most critical activities, which can offload a part of the burden. 

All in all, the point is to empower you and your organization with information to become a truly data-driven enterprise.

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