Blog

The Datafication of Business and Society

Tuesday, June 9, 2015
Irving Wladawsky-Berger

I first encountered the term datafication in The Rise of Big Data: How It’s Changing the Way We Think About the World, by Kenneth Cukier and Viktor Mayer-Schönberger.  Their 2013 Foreign Affairs article does a very good job of articulating why “big data marks the moment when the information society finally fulfills the promise implied by its name.”  Datafication is the term they give to our newfound ability to capture as data many aspects of the world and our lives that have never been quantified before.

Datafication is a fairly new concept associated with our recent data revolution.  But digitalization - its companion concept which captures the impact of the digital revolution on the economy and society - has been in use since computers were widely adopted around 60 years ago.  Its ensuing digital products have been generating all that data and its drastically lower technology costs have made it possible to store and analyze those oceans of information.

The Impact of Datafication on Strategic Landscapes - a report published in April, 2014 by Ericsson in collaboration with the Imperial College Business School and the UK’s Sustainable Society Network - nicely explains the differences and interrelationship between datafication and digitalization.

“In contrast to digitalisation, which enabled productivity improvements and efficiency gains on already-existing processes, datafication promises to completely redefine nearly every aspect of our existence as humans on this planet. Significantly beyond digitalisation, this trend challenges the very foundations of our established methods of measurement and provides the opportunity to recreate societal frameworks, many of which have dictated human existence for over 250 years.”

Around 50 years ago, the nascent digital revolution gave rise to an exciting new discipline and profession, computer science.  Similarly, our data revolution has now led to the emergence of data science as a hot new profession and academic discipline.  Data science research and educational programs are being organized in universities around the world.  In a 2012 Harvard Business Review article, Data Scientist: The Sexiest Job of the 21st Century, Tom Davenport and D. J. Patil, defined data scientist as “a high-ranking professional with the training and curiosity to make discoveries in the world of big data… Their sudden appearance on the business scene reflects the fact that companies are now wrestling with information that comes in varieties and volumes never encountered before.”

Data science and datafication may be new, but the relationship between computing and data goes back to the early days of the IT industry.  Data processing was the term then used to describe the applications of computers to automate highly structured business processes like financial transactions, inventory management and airline reservations.  Over time, sophisticated applications were developed to better manage the operations and associated data of the organization, including enterprise resource planning, customer relationship management and human resources.

Continue reading the full blog, first posted here.

Among his other affiliations and positions, Irving Wladawsky-Berger is a Visiting Lecturer at MIT's Sloan School of Management and Engineering Systems Division.