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Data Mining

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Data Mining: Article

Data Mining

Data Mining

You may think you're using your data warehouse to its fullest extent. After all, you've amassed a great deal of data about customers or inventory that you can look up at will. But if you're not using the proper business intelligence (BI) tools, your data warehouse is no better than a hunk of coal. BI tools such as data mining can turn the coal into a diamond that can propel your business to the top.

Data mining can help you do more than you ever imagined with your data warehouse. Some call data mining data discovery or data knowledge, but whatever you call it, data mining allows you to take your data warehouse, dissect it piece by piece, and summarize it into useful information.

Data mining isn't just a fancy term for OLAP (Online Analytical Processing), which tells you what happened in the past. Data mining helps users predict the future through the discovery of trends and patterns in the data. This insight can then help a business repeat good trends and avoid bad ones. Most businesses use a combination of data mining and OLAP. It's important to keep the difference in mind so the proper tool is used to answer the question at hand.

Marketing Departments Love It
Data mining tools are especially important for marketing departments because of the need to single out customer segments with high profit potential. Before, it was difficult to identify these groups because it required manually sifting through large amounts of data. Data mining makes it quick and easy to sort through the data and discover customer behavior and patterns.

For example, if a company is examining the effectiveness of its advertising campaign and wants to find out why people are coming to its Web site and who's actually buying products, data mining tools can help. The company can sort through its data warehouse to profile customers concerning which referring Web sites generate sales and which don't. This helps the company better target future marketing efforts.

Data mining can also directly affect a business's bottom line by improving quality. The analytical features of data mining allow businesses to identify best practices that are hidden in their data, institute fraud control, and support initiatives that center around operation improvement. Data mining tools are new weapons that weed out inefficiencies and help a company outpace the competition.

Choice of Tools
A number of data mining tools are available. Some of the more popular are Cognos Scenario, Angoss Knowledge Suite, Business Objects Business Miner, SAS Enterprise Miner, and SPSS Clementine. Microsoft SQL Server 2000, due out in a few months, will have data mining features. There are also related tools that do predictive modeling or present the results of the data mining graphically. But which program is best?

The best one for you may not be best for another company. It really depends on the level of management and sophistication you need. If you're a visual person who needs to see it in a graph, you want something like Cognos Visualizer. If you're a person with a bunch of thoughts, but not sure where they lead, you may want to use Cognos Forethought.

To use data mining tools you need to clean up your data warehouse and integrate it into one database. Then figure out which type of data you're going to use. Once you've gotten your core listing of data cleaned and ready, you need to transform it into the appropriate form for use by the mining tool.

When you start mining, use a pattern finder to figure out what types of patterns exist in your data. Once you find some patterns, you need to figure out which are useful and interesting and which aren't; this may take some time.

Get the Most from Your Data
The use of data mining is still up and coming, but it's becoming clear that without data mining tools, businesses aren't getting all they can out of their data. The growth of e-commerce has increased the need for data mining because web-based companies are amassing huge amounts of data on their customers, which would be impossible to analyze with traditional tools.

Remember to keep the key decision makers involved during the entire data collection and mining process as they're the ones who'll need to know how best to use it. Think of decision makers as the miners with the helmets and lights. You can send them into a cave, but if you don't tell them what to dig for and how to do it, they won't find anything.

More Stories By Michael Pelletier

Michael Pelletier is a
consultant with Pinnacle Decision Systems (www.pinndec.com), a
privately held professional services and software development company in Middletown, Connecticut. The company helps design and develop
Internet-based business intelligence systems
incorporating client/server and data warehousing applications.

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