No matter what field you are in, you would have certainly heard about data mining. Over a period of time, it has gone on to become the buzz word in the industry, and the gurus of the industry believe that it holds the future of the industry.
Defining Data Mining
Let us first provide a definition to data mining. In plain language, data mining is a simple process which involves searching, collecting, filtering and analyzing data. For example, you are a new management institute and looking for data about students who are willing to pursue the course. In this case, you would first search for data. You can find such information from other colleges or sources that fit your requirement. The next step is to collect the data. Hence, once you have identified the sources, you then go on to collect the same, and even filter it. In the filtering process, you decide what part of the collected data shall suit your requirement, and what would have to be eliminated. Towards that end, you will make an analysis of the data to derive insights. Without proper insights, the data would prove to be futile for you.
The Complexity of Data Mining
By the definition provided above, you might think that this is a simple process. However, there are many complexities associated with the process. The trends in the industry have completely transformed, and organizations are now collecting large amounts of data. That has lead to the inception of the term – ‘Big Data’. Let us consider the case of a retail firm. The firm sells 7 different types of products. Moreover, there are 8 different outlets which are operated by the firm. Each store can expect anywhere between 5000 and 8000 footfalls every week. They might all buy different types of products. Consider the amount of data the store would have to collect in order to generate all valid information. This is just a simplistic example; it gets all the more complicated in real life situations when there are many different types of product lines, and the information is broader.
Why Data Mining?
The next question that needs to be addressed is why is data mining important. As mentioned above, the gurus believe that data mining holds the future of the industry, and it can help organizations and businesses usher in a metamorphosis in the way they managed their businesses. Following are some reasons why data mining becomes extremely important:
Statistical Co-Relations: There are times when you believe that a certain event is triggering a set of other different events. However, it is impossible for you to base your decision on the basis of assumptions. When there is so much on stake, you have to take decisions on the basis of proof. That is where you can develop statistical co-relations by using data mining.
Establish Trends: Another thing that is important to note is that data mining helps you establish trends. This means that you can use historical data to forecast the events that you expect to happen in the future. Knowing the future is pertinent for all organizations and institutions, and data mining can assist you do that with complete confidence.
Be Competitive: This is another crucial advantage of data mining. When you are in an industry, you are surrounded by competitors. When you cripple on one instance, the competitors are ready there to take away your work. That is where it becomes imperative to stay competitive and stay alive to the situation. With the help of data mining, you can garner immense information about your customers, and that can lead to unparalleled competitive advantage.
Build Relations: What is the objective of all businesses? Many people believe that businesses aim to build solid relations with their customers. Such relations lead to the long term success of firms. With the help of data mining, companies can better understand the needs of the customers. This way, they would be able to offer such products and services that meet the needs of the customers. Better satisfaction leads to better relations, and that is the objective of the entire exercise.
Exude Confidence: Also, when you are equipped with the right information (with the help of proven data), you would exude confidence. By the virtue of this confidence, you would be able to perform well in your business.
Who Need Data Mining?
Here are some of the entities that can benefit by indulging in data mining:
Government: The Government certainly needs to garner data about various things that are happening in the particular territory or country. Data mining can help in that case.
Private Companies: Obviously, private companies aspire to earn profit, and data mining can assist them in the endeavour.
Institutions: Also, not for profit institutes can benefit by making use of data mining.
In short, data mining has turned out to be a highly important effort for modern day organizations and institutions. With the help of talented individuals or professionals, they can make the most of data mining and its virtues.