Data Mining for Business Decisions

Pyramid shows how raw data can become significantly beneficial after it is gathered, structured and analyzed. This model illustrates the importance of the data stored in the data warehouses. As the pyramid suggests, data are more valuable to the business once the company develops connectedness and meaning, transforming It into Information, knowledge, and eventually wisdom. As described in the case, the following are the benefits derived by the businesses: Applause’s utilized data mining technology to analyze both the front-of-house and back-of-house performances.

They also used the stored data for effective inventory management (supplies replenishment) and identifying which products to promote. Iteratively, an online travel site, uses text analytics software by Density that extracts Important unstructured Information from emails, surveys and call center reports to Improve customer service. They linked the unstructured data with the structured data from its Dratted warehouse to track trends and forecast events. Visitation is an online retailer that uses data mining to find issues regarding customer registration on their website.

Using the data mining LOL Visual Site, they Walworth the registration process to identify and resolve process Issues. In general, the following are the advantages of using data warehouses: Enhanced business Intelligence to generate profits – by gaining Insight of the customers, employees and management, making real-time decisions and creating new opportunities or products through data analysis. Saves time or operations efficiency – users can quickly access critical data from a number of sources, so they can make rapid informed decisions on key initiatives. Enhances data quality and consistency Storing and processing data also has disadvantages. A valid reason why a company will not utilize data warehousing technology is when the cost to effectively capture unstructured data outweighs its benefit. For small businesses, data mining may not be a sound financial investment. At a certain point, companies should be able to tell whether or not technology Is beneficial to the overall bottom line performance of the business. Other concerns, maybe privacy (risk of unethical use of personal information).