Using Datafication For Greater Competitive Advantage
Posted By : Arpita Pal | 27-Nov-2023
Modern-day challenges demand our solutions to be fast, and our technology to be faster. Datafication enhances technologyâ€™s capabilities in analyzing its operating environment faster, by transforming its elements into quantifiable nature. Datafication, in simple terms, refers to transforming the key aspects of real-life into data that can be assessed in quantifiable terms for easier processing by systems. To enhance people's lives with more convenience, the world is witnessing a greater incorporation of technology into various aspects of daily functioning. To provide a smooth integration of technology into our lives, datafication steps up to the role of a solution provider by converting unstructured information into understandable terms for data-driven decisions and accelerating digital revolution within society.
Datafication And Its Impact On Society
To understand how technology will play a greater role in our daily functioning, we need to understand what aspects of life can be used for datafication. Although it greatly depends on the targeted objective, according to a report by Ericsson, mainly four aspects of society will experience datafication for effective solutions to our modern-day challenges:
Business Operations: Business functions have already witnessed a considerable degree of datafication in enterprises. From recruiting to supply chain management, datafication makes it easier for enterprises to identify, track and monitor crucial and small details operating within external and internal sources to obtain success in business goals and objectives, higher sales, enhanced efficiency etc.
Cities: Datafication in cities provide smart solutions for issues pertaining to infrastructure, transportation, urban planning, electricity and water, resource and budget allocation, and other important issues by providing valuable insights, essential records of relevant data and management of city resources.
Individual Behaviors: The behavior of people in terms of individuality has always been a great topic of interest for businesses to understand why people behave the way they do, and what can be done to influence them to behave a certain way. Businesses in general aim to achieve personalization with their methods through datafication by analyzing customer behavior, preferences, trends etc and make targeted attempts for greater influence.
Private Lives: Datafication has made information available down to the individual level, where one can observe technology-enhanced solutions down from performing functions on the phone to receiving personalized recommendations for investing in financial schemes from banks, which is a prime example of how private lives too are influenced by datafication.
How Datafication is Empowering Enterprises
1) Better Decision Making: Decision-making is a comprehensive process where both micro and macro factors affecting an organization must be taken into consideration for precise analysis, monitoring and formulating business strategies. Datafication strengthens the organizationâ€™s capabilities in performing crucial operations with the help of progressive technologies such as AI, machine learning etc by transforming information from internal and external sources into quantifiable data and actionable insights. It serves as the right arm for executing data analytics to find solutions for challenges concerning the enterprise such as achieving objectives, operational efficiency, resource utilization, expansion targets etc. By providing valuable insights through round-the-clock monitoring, datafication enables continuous improvement, optimizes operations and provides new opportunities for growth.
2) Personalization: As businesses leverage more and more advanced technologies to nail down how customers make their decision to purchase a product or service, datafication is a prominent procedure in the process that helps in providing and communicating a comprehensive picture of factors affecting a customer's journey. Datafication assists with the thorough analysis of customer behavior, preferences, trends and needs to effectively strategize how to formulate marketing strategies that are most relevant to the customer. With the help of detailed insights, enterprises carry out personalization techniques such as promotional offers and discounts, targeted ads, loyalty programs, and trend-based marketing in real-time to offer maximum value for their buyers, achieve successful campaigns and generate higher revenue.
3) Information Management: Data management is crucial for an enterprise as it serves as an important supporting pillar for a business to function and achieve its objectives. Datafication in data management oversees the conversion of unstructured and irrelevant data into useful insights and facilitates its application for informed decision-making for higher efficiency, customer satisfaction, and growth. It also aids in storing multitudes of data collected daily for future use in cases of requirement for quick retrieval, evaluation and assessment of historical trends and patterns to perform forecasting and predictive analysis for the organization.
4) Enhanced Performance: Any organization is any good as its level of efficiency in its operations. Datafication acts as an enabler in streamlining the operations of an organization by providing useful information for its vital functions including operations, supply chain, research and development, resource utilization and many more. It supports these operations by identifying key areas of improvement, removing bottlenecks, forecasting demand and supply, facilitating smooth logistics, predictive maintenance and enhancing the performance of existing functions to attain greater operational excellence.
5) Enables Digitization: Automation for enterprises holds the key to greater performance, intelligent solutions and robust management and security to gain competitive advantage and keep up with the times to counter modern-day challenges. Datafication accelerates digitization for enterprises by providing quantified data resources that make integrating automation support within multiple departments easier. Systems are able to process quantifiable information through datafication much faster through which they provide strong analytical support for greater resilience and effective management.
6) Risk Mitigation: Datafication plays an essential role in risk management as more data resources directly correlate with lesser risk as it can carry out prediction techniques with greater precision. For risk managers, lack of data is the biggest issue in performing forecasting and assessment to produce accurate insights. With assistance from AI, datafication removes bias from regression models that perform analysis and provide data-driven insights. With more data available, regression models will be able to work with larger data sets and more variables to lessen the chances of inconsistencies. Accurate forecasting and predictive analysis will strengthen enterprises' resilience against market volatility and unexpected threats.
Real-life Applications of Datafication in Industries
A) Manufacturing: Datafication in manufacturing provides extensive abilities to streamline its key areas of R&D, production, warehousing, supply chain and logistics by converting and assimilating valuable data for data-driven decision-making and real-time monitoring. These key aspects of manufacturing are susceptible to unexpected changes and volatilities that can lead to shrinking, wastage of inventory and loss of revenue for the enterprise.
With sensors and smart cameras, managers and staff can monitor the real-time status of smart equipment through the information provided by the devices, provide assessment of historical data and prediction for future trends for supply and demand, effective maintenance of equipment as staff can be notified immediately through data provided by sensors, and remove overall barriers to production for enhanced performance and higher operational efficiency.
B) Human Resources: Datafication can elevate performance of its key aspects namely, talent acquisition, recruitment, employee retention, performance, learning and development with data tracking and monitoring of key metrics and past and existing employee information, and provide essential insights and analytical support for comprehensive HR effectiveness. With progressive technologies such as predictive analytics, business intelligence, machine learning, and more, datafication can transform HR functions to resolve organizational challenges and pivot enterprise talent towards greater success for collective achievement.
C) Finance: In finance, datafication can resolve essential issues of financial management involving handling multitudes of sensitive transactional data, effective risk management, predicting financial trends for key areas, and analyzing and providing important metrics for informed decision-making and risk mitigation for healthier financial performance and higher revenue generation.
D) Healthcare: For round-the-clock monitoring of patient health and developing a deeper understanding of the cause-effect relationship of various treatment plans, wearable technology enables datafication by collecting patient data through sensors embedded in electronic devices. Collection and analysis of patient and treatment data aids medical professionals in detecting early signs of illness, patterns and uncommon behavior in the human anatomy and formulating effective treatment plans for speedier recoveries, etc.
E) Retail & E-commerce: Online shopping along with brick-and-mortar stores utilize advanced technologies to track and monitor customer behavior, preferences and trends and how various factors influence their purchase decisions. Through datafication, retail companies and businesses can get a deeper understanding of what drives a customer to buy a product and create data-driven strategies to influence and attract customers into purchasing their products and drive higher sales.
F) Education: As increasing number of educational institutions are incorporating technology to provide extra academic support to their students, datafication is providing opportunities for assessing studentsâ€™ learning journey, the effectiveness of study plans and various factors that are used for delivering standardized education to their students.
Considered as the new â€œoilâ€, datafication has opened up plenty of opportunities, innovations and new ways of performing things in almost every aspect of daily functioning. Its increasing importance is expected to continue to grow as the role of technology will also grow which would require quantifiable data resources for optimized functioning. However, with rising data collection requirements, concerns for data privacy are also likely to rise which can be overcome with stringent regulations and intelligent solutions that ensure that the right to privacy is not violated.
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