Page 161 - DCAP606_BUSINESS_INTELLIGENCE

Business Intelligence

Notes data, and the larger the force to increase the amount of data being assembled and sustained,
which increases the pressure for much quicker, more mighty data mining queries. This raises
pressure for bigger, much quicker systems, which are more expensive.

Self Assessment

State whether the following statements are true or false:
7. Data analysis can only be as good as the data that is being analysed.
8. Data mining makes it possible to investigate routine enterprise transactions.

9. In a relational structure, data is retained in tables, allowing ad hoc queries.
11.5 Data Mining Applications

Data Mining is a relatively new concept that has not completely matured. Regardless of this,
there are a number of industries that are already using it on a normal basis. Some of these
companies include retail shops, banks, and insurance firms.
Many of these companies are using data mining for statistics, pattern acknowledgement, and
other significant tasks. Data mining can be utilised to find patterns and associations that would
else be difficult to find. This concept is popular with many businesses because it permits them to
discover more about their customers and make intelligent trading conclusions.
There are a number of applications that data mining has. The first is called market segmentation.
With market segmentation, you will be able to find behaviours that are common among your
customers. You can look for patterns among customers that appear to buy the same products at
the same time.

Another application of data excavation is called customer churn. It will permit you to estimate
which customers are most likely to stop purchasing your products or services and proceed to
one of your competitors. In addition to this, a company can use data mining to find out which
purchases are the most likely to be fraudulent.

Example: By using data mining a retail shop may be able to determine which goods are
stolen the most.

By finding out which products are stolen the most, steps can be taken to protect those goods and
notice those who are stealing them. You can furthermore use data mining to determine the
effectiveness of interactive trading. Some of your customers will be more interested to buy your
products online than offline, and you should recognise them.
While many use data mining to boost their profits, many of them don’t realize that it can be used
to create new businesses.

Example: Assume that you are the owner of a latest gadgets manufacturing company,
and you are able to accurately predict the next large-scale latest tendency based on the buying
patterns of your customers.
It is very simple to say that you will become very wealthy in a short span of time. You will have
an advantage over your competitors. For long-term thinking rather than easily guessing what
the next large-scale trend will be, you will be able work out it based on statistics, patterns, and
reasoning.

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