Domestic and global business competition is fierce. Companies must look for new tools to give them a competitive advantage. Technology has added an additional layer of competitive tools, commonly called data mining technology or data mining software. For many firms seeking to improve their competitive edge, the ability to perform data mining is rapidly becoming a necessity rather than a luxury. Data mining involves the extraction of hard to find information from large databases that companies normally maintain.
Data mining tools can help businesses predict future trends and behaviors, allowing businesses to make proactive and knowledgeable decisions. Data mining tools may help companies to answer business questions too complex to answer until now. Data mining involves information extraction. More specifically, data mining tries to discover hidden patterns and relationships contained in company databases.
The first step in the data mining process involves gathering data. The good news is that most companies already are doing so. The key is to find the data critical to the business, and prepare it for the data mining process. Fortunately, data mining techniques can be rapidly implemented on existing software and hardware platforms to enhance the value of existing information resources.
Data mining analyzes large amounts of data using statistical analysis, modeling techniques and database technology. An article in FDA Consumer explains that data mining is a technique using modern computing and statistical algorithms to extract meaningful, organized information from large, complex databases. This process discovers trends and patterns of behavior that previously might have gone unnoticed. The obvious goal is to use the information and insights in a way that will benefit the company (Improving safety through data mining, 2003, 5).
Data mining finds patterns and subtle relationships in company data, and then creates rules...