Mining data is helping firms make major decisions and compete more effectively. Data mining has wide applications in sectors such as telecommunications,banking/finance, retailing, automobile, and healthcare.
Importance of Data Mining in Analyzing Your Business: Trend Shows An Increased Spending
Importance of Data Mining in Analyzing Your Business: Trend Shows An
Irrespective of size, businesses are finding an edge over competition or a new niche
by gaining greater insights from data. Mining customer data, reports on market
analysis, sales data, and so on and making clear sense of the data is helping firms
make major decisions and compete more effectively. Data analytics or data mining
transforms raw data into useful information. An article in ComputerWeekly.com
reports on a survey by Accenture and SAS which showed that in 2012, up to 72% of
businesses in the US planned to spend more on analytics even when many other
budgets were cut.
Here’s a look of some of the ways in which the ability to predict trends from data has
proved useful in various industries.
Data Mining in the Automobile Industry
The application of data mining in automotive sector can be well explained with the
example of General Motors (GM). A 2012 Chevrolet Volt owner brought in his car for
a warranty repair in Europe. The problem was a faulty valve which affected the
working of the brakes.
As a first attempt of error detection, GM analyzed the parts used in their cars, and
collected its manufacturing records from the supplier. The analysis took one month
and showed that only four cars in the US had a faulty valve! Data mining had saved
the day. In fact, if this capability was not available, GM would have had two options to recall the model, inconveniencing thousands of owners or to let the defect slide
which would have put the drivers’ lives at risk.
Like GM, many automakers are using advanced track and trace software to spot
defects more quickly. This is how the process works:
Each machine component is given a unique bar code or radio-frequency tag
by the supplier
At each assembly point, this component get scanned to collect data on how it
If any problem emerges later, the automaker scans the component
On detection of the defect, the manufacturer and the supplier trace the fault
to the Vehicle Identification Number (VIN) of all other affected cars
Data mining improves employee performance and reduces recall costs. According to
Teradata Corp, a data analytics company, track and trace software is a cost-effective
solution to cut down excess cost. The company claims as this software can lessen
warranty costs by 10 to 35 percent, administration costs by 25 to 45 percent, and
compliance costs by 30 percent.
Data Mining in the Retail Sector
Mining customer and sales data offers huge benefits for the retail industry:
To identify customer buying behavior
To realize customer shopping patterns and trends
Design more effective policies for goods transportation and distribution
Enhance goods consumption ratios
For purchase recommendation and cross-reference of items
Improve the quality of customer service
Analyzing customer loyalty for achieving customer retention
Data Mining in the Healthcare Sector
In healthcare, data mining services are becoming increasingly popular as well as
essential. Physicians can identify better treatments and effective practices,
healthcare insurers can detect fraud and abuse, hospitals/healthcare can make
decisions on customer relationship management – all of which improves leads to
better healthcare services at more affordable cost.
Main applications of data mining in healthcare are:Smarter Methodologies for Treatment: - Analyzing patient and treatment data
helps to identify the most effective treatment for diseases, by comparing and
contrasting various causes, symptoms and the previous treatment methods.
Improved Healthcare Management: Data mining can develop better diagnosis
and treatment methodologies and improve and maintain the quality healthcare. It
helps to identify chronic disease states, high-risk patients, and hence to identify the
number of hospital admissions/claims.
Better Management of Customer Relations: Customer relationships are valuable,
as far as any healthcare sector is concerned. Understanding patient preferences and
characteristics can improve their satisfaction level to a greater extent.
Another big application of data mining is in healthcare forecasting and investigation.
Drug manufacturers usually conduct studies on approved drug, to identify its side
effects and to show them on the product labels. However, it is impossible to identify
all adverse interactions before actual use.
Research conducted by the Stanford University School of Medicine and Microsoft
recently revealed that mining web searches can expose the unreported side-effects
of drugs more effectively. Most people use the internet to report and share
information about drug use and the data mining software developed by the Microsoft
scientists revealed that users of the anti-depressant, Paroxetine and cholesterollowering drug, Pravastatin were experiencing a drug-drug interaction that was
Other industries that benefit from analyzing data trends include telecommunications
and banking and finance. Such analysis requires special skills and software. That’s
why many businesses are relying professional data mining services.