Data Mining

and
Business Intelligence
Introduction
Created/Adopted/Modified for
Data Mining and Business Intelligence – MCA II Semester
Vidya Vikas Institute of Engineering & Technology
Mysore
2023-24
GPD
 Why Data Mining?

 We are drowning in data, but starving for knowledge!

 “Necessity is the mother of invention”

 Data mining—Automated analysis of massive data sets

 What Is Data Mining?
Data Mining (Knowledge Discovery from Data)
Extraction of interesting (non-trivial, implicit,
previously unknown and potentially useful)
patterns or knowledge from huge amount of
data
 Data mining: a wrong/unsuitable name ?
 What Is Data Mining?
 Alternative names

 Knowledge Discovery from Data (KDD),

KDD Knowledge
discovery (mining) in databases, knowledge extraction,
data/pattern analysis, data archeology, data dredging,
information harvesting, business intelligence, etc.
 Watch out: Is everything “data mining”?
 Simple search and query processing ?
 (Deductive) expert systems ?
 Quiz Time
Data Mining is :

a) the process of pooling all relevant data together

b) the process of extracting, collecting and loading data
from multiple sources
c) the process of discovering patterns in large data sets
d) I don’t know
 Why Analyzing and Reporting Data?
 1. Decision-Making: Analysis and reporting of data provide valuable
insights that support decision-making processes. By examining the
data, organizations can identify trends, patterns, and relationships
that can help them make informed and strategic decisions.
 2. Performance Evaluation: Analyzing and reporting data allows
organizations to assess their performance against predefined goals
and objectives. Key performance indicators (KPIs) can be established
and tracked through data analysis, providing a quantitative measure
of success. Reports enable managers to evaluate progress, identify
areas of underperformance, and take corrective actions.
 Why Analyzing and Reporting Data?
 3. Problem Identification and Troubleshooting: Data analysis helps in
identifying problems or bottlenecks within business processes. By
examining the data, organizations can uncover anomalies, outliers, or
inefficiencies that may indicate underlying issues. Reports can
highlight areas where processes are not functioning optimally,
enabling businesses to take corrective measures and improve
operational efficiency.
 4. Customer Understanding: Analyzing customer data provides insights
into consumer behavior, preferences, and needs. By studying
customer data, organizations can segment their customer base,
identify target markets, and develop personalized marketing
strategies.
 Why Analyzing and Reporting Data?
 5. Competitive Advantage: Data analysis and reporting provide
organizations with a competitive edge in the market. Analyzing data
allows organizations to stay agile, adapt to changing market
conditions, and capitalize on emerging opportunities.
 6. Risk Management: Data analysis plays a crucial role in identifying
and mitigating risks. By examining historical and real-time data,
organizations can identify potential risks, such as fraud, security
breaches, or market fluctuations. Reports can help businesses
monitor risk indicators, detect anomalies, and take proactive
measures to mitigate risks before they escalate.
 Why Analyzing and Reporting Data?
 7. Compliance and Regulation: According to Government and
Industrial regulations, businesses must perform certain analysis and
present reports.
 8. Continuous Improvement: Data analysis and reporting facilitate a
culture of continuous improvement within organizations. By regularly
examining data, organizations can identify areas of inefficiency,
monitor the impact of process changes, and track the effectiveness of
improvement initiatives. Reports provide insights into the outcomes
of improvement efforts, enabling organizations to refine strategies
and optimize operations over time.
 Life Cycle of Data
From Raw Data to Valuable Information
 The journey from raw data to valuable information involves the lifecycle of data.

 1. Data Generation:
Generation Raw data is generated through various sources
such as transactions, sensors, social media, or customer interactions.
It can be structured, semi-structured, or unstructured.
 2. Data Collection:
Collection Capturing data in its original form without any
significant modifications.
 3. Data Storage:
Storage The data is stored in databases, data lakes, or other
storage systems, in a secure and organized manner to ensure easy
retrieval and efficient processing. This can involve data warehouses,
data marts, or cloud-based storage solutions.
 Life Cycle of Data
From Raw Data to Valuable Information
 The journey from raw data to valuable information involves the lifecycle of data.

 4. Data Pre-processing:
Pre-processing Data undergoes cleaning, transformation,
and integration processes. Data quality is improved, inconsistencies
are resolved, and relevant attributes are selected for analysis.
 5. Data Analysis:
Analysis In this stage, various analytical techniques such as
statistical analysis,
analysis data mining,
mining machine learning,
learning and visualization
are applied to extract insights and patterns from the processed data.
 6. Data Interpretation:
Interpretation The analyzed data is interpreted to derive
meaningful information and actionable insights. This step involves
identifying trends, correlations, and relationships within the data.
 Life Cycle of Data
From Raw Data to Valuable Information
 The journey from raw data to valuable information involves the lifecycle of data.

 7. Reporting and Presentation:

Presentation The valuable information is presented
in the form of reports, dashboards, visualizations, or interactive
tools. These outputs provide a concise and accessible format for
decision-makers to understand the insights derived from the data.
 8. Utilization and Decision-Making:
Decision-Making The valuable information is
utilized by decision-makers to make informed decisions, set
strategies, solve problems, or optimize business processes. The
insights gained from data analysis help organizations drive growth,
improve efficiency, and gain a competitive edge.
 Life Cycle of Data
From Raw Data to Valuable Information
 The journey from raw data to valuable information involves the lifecycle of data.

 9. Data Retention and Disposal:

Disposal Data that has served its purpose is
either retained for archival or legal purposes or disposed of based on
data retention policies and regulatory requirements.

 The lifecycle of data is a continuous process, as new data is generated,

collected, and analyzed, leading to further insights and refinements.
 What is Business Intelligence ?
Business intelligence (BI) refers to the technologies,
tools, and processes used by organizations to turn data
into actionable insights.
The goal of business intelligence is to support better
decision-making by providing access to accurate and
timely information about the organization's operations,
customers, and markets.
 What is Business Intelligence ?
“Set of methodologies, processes, architectures, and
technologies that transform raw data into meaningful and
useful information that allows business users to make
informed business decisions with real-time data that can
put a company ahead of its competitors” (according to
Forrester)
In other words, the high-level goal of BI is to help a
business user turn business-related data into actionable
knowledge.
 What is Business Intelligence ?
Business Intelligence involves the use of software
applications and systems to gather, store, analyze, and
visualize data from different sources, such as databases,
spreadsheets, and data warehouses.
 Business Intelligence Work Flow
 Data integration: Gathering data from multiple sources and
consolidating it into a unified view.
 Data analysis / Data Mining / Data Exploration: Applying various
analytical techniques to derive insights and identify trends.
 Reporting and Visualization: Presenting data in the form of
reports, dashboards, and visualizations for easy interpretation.
 Performance monitoring: Tracking key performance indicators
(KPIs) and measuring progress toward business goals.
 Decision support: Providing decision-makers with accurate and
timely information to support strategic and operational decisions.
 What is a Data Warehouse?
 Defined in many different ways, but not rigorously

 A decision support database that is maintained separately from

the organization’s operational database
 Support information processing by providing a solid platform of
consolidated, historical data for analysis
 “A Data Warehouse is a subject-oriented, integrated, time-variant,

and nonvolatile collection of data in support of management’s

decision-making process.”—W. H. Inmon
 Data warehousing: The process of constructing and using data
warehouses
 Data Warehouse can be ...
 Subject Oriented : Organized around major subjects, such as
customer, product, sales, etc.
 Integrated : multiple, heterogeneous data sources – like relational
databases, flat files, on-line transaction records
 Time Variant : The time horizon for the data warehouse is significantly
longer than that of operational systems
 Static (non-volatile):
(non-volatile) Operational update of data does not occur in the
data warehouse environment
 Independent : A physically separate store of data transformed from
the operational environment
 BI & DW in Today’s Perspective
 Business Intelligence (BI) and Data Warehousing (DW) are integral to
modern businesses, enabling them to harness the power of data to
drive strategic and operational decisions.
 1. Better Decision-Making:
 BI: Helps businesses make informed decisions with insights from
data.
 DW: Stores data from various sources in one place for easy analysis.
 2. Competitive Edge:
 BI: Identifies market trends and customer preferences.
 DW: Provides accurate data for BI tools.
 BI & DW in Today’s Perspective
 3. Increased Efficiency:
 BI: Finds and fixes process bottlenecks.
 DW: Allows quick access to integrated data.
 4. Better Customer Understanding:
 BI: Analyzes customer behavior to improve satisfaction.
 DW: Combines customer data from different sources.
 5. Real-Time Analysis:
 BI: Supports real-time data analysis and quick responses.
 DW: Handles real-time data for timely decision-making.
 BI & DW in Today’s Perspective
 6. Compliance Monitoring:
 BI: Helps ensure regulatory compliance with transparent data.
 DW: Ensures data consistency for compliance reports.
 7. Scalability:
 BI: Adapts to growing data needs and new analysis types.
 DW: Scales to handle more data and changing structures.
 8. Integration with Advanced Tools:
 BI: Works with big data and advanced analytics for deeper
insights.
 DW: Centralizes big data and structured data for
comprehensive analysis.