What is Data Mining: Application | Working | History

What is Data Mining

Data Mining is characterized as a cycle used to separate usable data from a bigger arrangement of any crude data. It infers dissecting data designs in enormous groups of data utilizing at least one programming. It has applications in different fields, similar to science and examination. With the utilization of data mining, organizations can become familiar with their clients and grow more powerful techniques identified with different business capacities and thus influence assets in a more ideal and adroit way. This causes organizations to be nearer to their target and settle on better choices. It includes viable data assortment and warehousing just as PC handling. For fragmenting the data and assessing the likelihood of future occasions, it utilizes modern numerical calculations. Data mining is also known as Knowledge Discovery in Data (KDD).

Data Mining History

The way toward burrowing through data to find concealed associations and anticipate future patterns has a long history. Now and then alluded to as "information disclosure in databases," the expression "data mining" wasn't instituted until the 1990s. However, its establishment contains three interlaced logical orders: insights (the numeric investigation of data connections), artificial intelligence (human-like intelligence showed by programming or potentially machines), and AI (calculations that can gain from data to make expectations). What was old is new once more, as it's innovation continues developing to stay up with the boundless capability of huge data and reasonable registering power.
Throughout the most recent decade, propels in preparing force and speed have empowered us to move past manual, monotonous and tedious practices to fast, simple, and robotized data examination. The more perplexing the data sets are gathered, the more potential there is to reveal significant bits of knowledge. Retailers, banks, makers, broadcast communications suppliers, and safety net providers, among others, are utilizing data mining to find connections among everything from evaluating, advancements and socioeconomics to how the economy, danger, rivalry, and online media are influencing their plans of action, incomes, activities and client connections.

How Data Mining Works

A typical data mining project starts with asking the right business question, collecting the right data to answer it, and preparing the data for analysis. Success in the later phases is dependent on what occurs in the earlier phases. Poor data quality will lead to poor results, which is why data miners must ensure the quality of the data they use as input for analysis.

It practitioners typically achieve timely, reliable results by following a structured, repeatable process that involves these six steps:

1. Business understanding:- The initial step is building up the objectives of the undertaking are and how data mining can assist you with arriving at that objective. An arrangement ought to be created at this phase to incorporate courses of events, activities, and job tasks.

2. Data understanding:- Data is gathered from all relevant data sources in this progression. Data perception devices are frequently utilized in this phase to investigate the properties of the data to guarantee it will help accomplish the business objectives.

3. Data preparation:- Data is then cleansed, and missing data are included to ensure it is ready to be mined. Data processing can take enormous amounts of time depending on the amount of data analyzed and the number of data sources. Therefore, distributed systems are used in modern database management systems (DBMS) to improve the speed of the data mining process rather than burden a single system. They’re also more secure than having all an organization’s data in a single data warehouse. It’s important to include failsafe measures in the data manipulation stage so data is not permanently lost.

4. Data Modeling:- Numerical models are then used to discover designs in the data utilizing modern data instruments.

5. Evaluation:- The discoveries are assessed and contrasted with business goals to decide whether they ought to be conveyed over the association.

6. Deployment:- In the last stage, data mining discoveries are shared across regular business activities. A venture business insight stage can be utilized to give a solitary wellspring of reality for self-administration data revelation.

Application of Data Mining

Data mining is the process of gathering information and analyzing it for actionable patterns, which can then be used to develop marketing strategies, new products that fit customers’ wants & needs, and cost-saving strategies. It can even ferret out fraud and error-based losses. Used ethically, it is a good tool company can use to stay viable and relevant within the marketplace. Here are the top five things you can do with data mining:

➨ Basket Analysis
This term refers to either the real-world or virtual “shopping basket” that customers will use when purchasing items. The data analyst will inspect customers’ preferences and seek to predict future buying trends based on what has already happened. additionally, to keeping track of products and services bought, basket analysis is also useful in monitoring payment options and rewards cards.

➨ Sales Forecasting
Sales forecasting is the process of estimating future sales. Accurate sales forecasts enable companies to create informed business decisions and predict short-term and long-term performance. Companies can base their forecasts on past sales data, industry-wide comparisons, and economic trends.

➨ Database Marketing
Database marketing is the practice of leveraging customer data to deliver more personalized, relevant, and effective marketing messages to customers (both existing and potential customers).

➨ Inventory Planning
Inventory planning refers to the process that any organization adopts to check the optimal quantity as well as timing, with the only aim of aligning such plans with the organization's capacity to produce and make sales. Inventory planning usually affects the company in many ways.

➨ Customer Loyalty
Customer loyalty is a measure of a customer's likeliness to do repeat business with a corporation or brand. it's the results of customer satisfaction, positive customer experiences, and therefore the overall value of the goods or services a customer receives from a business.

As useful as all of these data mining techniques and therefore the accompanying information being analyzed can be, a business needs to handle them ethically. fair use is one thing, but selling the gathered information to scam artists or fraudsters for a profit crosses the limit. Besides, should the world at large find out a company has done such a thing, it won’t be hard to trace the buying trends of that company as they enter free fall. By being ethical and intelligent with their uses for it, a company can maintain its place in the world market.

The Future of Data Mining

The future is bright for data mining and data science as the amount of data will only increase. By 2020, our accumulated digital universe of data will grow from 4.4 zettabytes to 44 zettabytes. We’ll also create 1.7 megabytes of new information every second for every human being on the planet.

Just like mining techniques have evolved and improved because of improvements in technology, so too have technologies to extract valuable insights out of data. Once upon a time, only organizations like NASA could use their supercomputers to analyze data — the cost of storing and computing data was just too great. Now, companies are doing all sorts of interesting things with machine learning, artificial intelligence, and deep learning with cloud-based data lakes.

Data Mining Advantages

➨ The data mining helps financial institutions and banks to identify probable defaulters and hence will help them whether to issue credit cards, loans, etc. or not. This is done based on past transactions, user behavior, and data patterns.
➨ It helps advertisers push the right advertisements to the internet surfer on web pages based on machine learning algorithms. In this way, data mining benefits both possible buyers as well as sellers of the various products.
➨ The retail malls and grocery stores arrange and keep most sellable items in the most attentive positions. It has become possible due to inputs obtained from data mining software. In this way, it helps in increasing revenue.
➨ It helps in obtaining desired search results of queries posed to e-commerce websites (e.g. Amazon, Taobao, Alibaba, Snapdeal, Walmart, Flipkart, BestBuy, eBay, etc.), search engines (Google, yahoo, bing, Ask.com DuckDuckGo, etc.)
➨ The method based on it is cost-effective and efficient compare to other statistical data applications.
➨ It has been used in many different areas or domains viz. bio-informatics, medicine, genetics, education, agriculture, law enforcement, e-marketing, electrical power engineering, etc. For example, genetics, it helps in predicting the risk of diseases based on the DNA sequence of individuals.
➨ It helps in identifying criminal suspects by law enforcement agencies as mentioned above.

Data Mining Disadvantages

➨ Privacy: There are chances of companies selling useful information about their customers to different companies for money. For example, American Express has sold credit card purchases made by its customers to the other company.
➨ Security: Many e-commerce companies are aware during which period various users come online based on historical data patterns. They do not have security systems in place to protect us.
➨ Some of the data mining analytics software are difficult to operate and requires the user to have knowledge-based training.
➨ Different data mining tools work in different manners due to different algorithms employed in their design. Hence the selection of the right data mining tool is a tedious and cumbersome task as one needs to obtain knowledge of algorithms, features, etc. of various available tools.
➨ The information obtained based on data mining by companies can be misused against a group of people.
➨ The data mining techniques are not 100% accurate and may cause serious consequences in certain conditions.

Important Points to Remember about Data Mining

➨ If the user has figured out how to interact directly with the data mining tool, at that point the user can pick better and smart marketing decisions for some corporation.
➨ Communication is significant when managing data mining with the goal that strong connections and connections can be resolved.
➨ There are two concepts called segmentation and clustering that are important in advertising and therefore the connection of customers to successfully use the data mining on the details.
➨ It was also used as a part of the strategy for preventing health fraud, waste, and abuse in society in the area of CMIP of the Medicaid Integrity Program.
➨ If you've got knowledge of data mining techniques, you'll manage applications in various areas like market Analysis, Production Control, Sports, Fraud Detection, Astrology, etc.
➨ If you've got a website for shopping, then data mining will help in defining a shopping pattern. If you're having issues with designing or selecting the products, data mining techniques can be useful to spot all the shopping patterns.
➨ It also helps with data optimization.
➨ One of the most important factors of data mining is that it determines hidden profitability.
➨ The risk factor in business can be taken care of because it provides clear identification of hidden profitability.
➨ Frauds and malware are the most dangerous threats on the internet which are increasing day by day. Credit card services and telecommunication are the main reasons for that. With the help of the Data mining techniques, professionals can get fraud-related data such as caller ID, location, duration of the call, the exact date and time, etc which can help to find a person or group who is responsible for that fraud.