Data mining is the process of sorting through large data sets to identify patterns and establish relationships to solve problems through data analysis. Data mining tools allow enterprises to predict future trends.
Data mining techniques are used in many research areas, including mathematics, cybernetics, genetics and marketing. While data mining techniques are a means to drive efficiencies and predict customer behavior, if used correctly, a business can set itself apart from its competition through the use of predictive analysis.
In general, the benefits of data mining come from the ability to uncover hidden patterns and relationships in data that can be used to make predictions that impact businesses.
Specific data mining benefits vary depending on the goal and the industry. Sales and marketing departments can mine customer data to improve lead conversion rates or to create one-to-one marketing campaigns. Data mining information on historical sales patterns and customer behaviors can be used to build prediction models for future sales, new products and services.
Companies in the financial industry use data mining tools to build risk models and detect fraud. The manufacturing industry uses data mining tools to improve product safety, identify quality issues, manage the supply chain and improve operations.