In Zimbabwe, big companies rely on data mining to get information on consumer behavior to enable them to package their goods and services that meet the needs and demands of their targeted market.
Notable companies that have dedicated Information Technology experts devoted to data mining include mobile network operators such as Econet, Telecel and NetOne.
What is Data Mining?
Data mining (sometimes called data or knowledge discovery) is the process of analyzing data from different perspectives and summarizing it into useful information. This is information can be used for modern day business modeling to increase revenue, cuts costs, or both.
Data mining software is one of a number of analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.
Although data mining is a relatively new term, the technology is not. Companies have used powerful computers to sift through volumes of supermarket scanner data and analyze market research reports for years. However, continuous innovations in computer processing power, disk storage, and statistical software are dramatically increasing the accuracy of analysis while driving down the cost.
For example, one Midwest grocery chain used the data mining capacity of Oracle software to analyze local buying patterns. They discovered that when men bought diapers on Thursdays and Saturdays, they also tended to buy beer.
The grocery chain could use this newly discovered information in various ways to increase revenue. For example, they could move the beer display closer to the diaper display. And, they could make sure beer and diapers were sold at full price on Thursdays.
Data, Information, and Knowledge
Data are any facts, numbers, or text that can be processed by a computer. Today, organizations are accumulating vast and growing amounts of data in different formats and different databases. This includes:
- operational or transactional data such as, sales, cost, inventory, payroll, and accounting
- nonoperational data, such as industry sales, forecast data, and macro economic data
- meta data – data about the data itself, such as logical database design or data dictionary definitions
The patterns, associations, or relationships among all this data can provide information. For example, analysis of retail point of sale transaction data can yield information on which products are selling and when.
Information can be converted into knowledge about historical patterns and future trends. For example, summary information on retail supermarket sales can be analyzed in light of promotional efforts to provide knowledge of consumer buying behavior. Thus, a manufacturer or retailer could determine which items are most susceptible to promotional efforts.
Dramatic advances in data capture, processing power, data transmission, and storage capabilities are enabling organizations to integrate their various databases into data warehouses. Data warehousing is defined as a process of centralized data management and retrieval. Data warehousing, like data mining, is a relatively new term although the concept itself has been around for years.
Data warehousing represents an ideal vision of maintaining a central repository of all organizational data. Centralization of data is needed to maximize user access and analysis. Dramatic technological advances are making this vision a reality for many companies. And, equally dramatic advances in data analysis software are allowing users to access this data freely. The data analysis software is what supports data mining.