Data classification is the process of organizing data into relevant categories based on predefined criteria such as importance and sensitivity. This makes it easy to store, sort, and retrieve for future use. The process involves gathering information, assessing risk, developing policies, enforcing standards, processing and monitoring data, and assigning classification levels. Data classification helps eliminate data duplication, reduces backup and storage costs, aids in compliance with industry-specific regulatory mandates, and allows organizations to manage, handle, and protect their data assets effectively.