Definition - What does Data Mining mean?
Data mining is the process of analyzing hidden patterns of data according to different perspectives for categorization into useful information, which is collected and assembled in common areas, such as data warehouses, for efficient analysis, data mining algorithms, facilitating business decision making and other information requirements to ultimately cut costs and increase revenue.
Data mining is also known as data discovery and knowledge discovery.
Techopedia explains Data Mining
- Extract, transform and load data into a data warehouse
- Store and manage data in a multidimensional databases
- Provide data access to business analysts using application software
- Present analyzed data in easily understandable forms, such as graphs
For instance, the retail giant Wal-Mart transmits all its relevant information to a data warehouse with terabytes of data. This data can easily be accessed by suppliers enabling them to identify customer buying patterns. They can generate patterns on shopping habits, most shopped days, most sought for products and other data utilizing data mining techniques.
The second step in data mining is selecting a suitable algorithm - a mechanism producing a data mining model. The general working of the algorithm involves identifying trends in a set of data and using the output for parameter definition. The most popular algorithms used for data mining are classification algorithms and regression algorithms, which are used to identify relationships among data elements. Major database vendors like Oracle and SQL incorporate data mining algorithms, such as clustering and regression tress, to meet the demand for data mining.
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