Datafication: Diving into the unknown

What is datafication and how it could affect individuals and businesses? Let’s take a deep dive

Data has become as important as oil and gold in today’s world. We have entered a new era where individuals are data and technology dependent and are entering into what one may call a “data-fied society” – where all information processes are driven by data. As each business focuses on different verticals, the data sets acquired and used by all businesses and companies are bound to be different.

The data which is collated from physical form and put into data sets is what we traditionally know as datafication. The concept of datafication refers to converting information into computerized data, which is quantifiable and analytical, and allows users to track and keep all data in one place.

However, the term is broader in sense and is not limited to simply storing and analyzing data. Almost all industries use datafication, whether it is to store data, analyze it, or use data for predictive analysis. Predictive analysis is used to predict the future of a particular trend or an event using historical and past records, which is done through quantified data. Almost all businesses use predictive analysis to mark the trends of the decline and growth of their products or services and further use the data to monetize their offerings.

The concept of datafication

The concept of datafication encompasses a wide array of areas, including businesses to investment, banking, and social media as well. The concept is not only used by businesses to keep track of their employee growth and work, but also used to keep track of customer relationships and improve customer experience. This can be done by collating data and then classifying it into categories or ranks based on customer satisfaction and wants. It is found that businesses that use datafication have a considerably higher competitive advantage as the stored data is evaluated and used in later stages or during the same stage. Datafication also allows businesses to do SWOT analysis i.e., evaluate their strengths, weaknesses, opportunities, and threats.

Impact of datafication

Furthermore, datafication is not only restricted to traditional businesses, to say. Streaming platforms such as Netflix, Hulu, Prime etc., which all started as mere small-scale platforms, use datafication to personalize user experience. That is why everyone’s homepage is customized to their own liking and preference. Even apps like Nike Run Club consolidate, accumulate user data, track the timing, and the miles they run, and curate a database in the form of guided runs that are suitable for them.

Platforms like Netflix, Hulu, and Uber are the ones who propelled the data game. Such platforms orchestrated the use of data as it is being used today and took it to the next level. They leveraged the data and used it to improve the customer experience. Traditional businesses that did not even look at data in the way these platforms did were inspired by them and followed suit. Let’s take an example of how social media platforms such as Instagram and Facebook use datafication – they categorise user likes and dislikes into clusters based on customer preferences, thereby rendering curated feeds for users.

However, many people view this as an invasion of privacy or see these platforms as “stalking” users. The simple truth and fact of the matter is that such platforms do not “stalk” users. The algorithms used simply compile user data and present them with related content, products, and services to optimize their experience and make it more enjoyable for them. It becomes an invasion of privacy only when the data is sold illegally to a third party or when the information is used and manipulated illegally.


Individuals may find that being overly data dependent may move them away from their locus of control. However, one also needs to understand that data drives businesses. It is the new steppingstone for businesses to grow and flourish, and without data, businesses will not be able to evaluate their growth needs or other important requirements. Simple SEO strategies are also examples of datafication as keyword insertion in a particular piece will determine its rank in the Google search engine. Thus, datafication benefits companies by providing them with a competitive edge. What you search for is what you get (provided the quality of data), and this is all possible through datafication.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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