Data warehouse and Data mining.

Essay by rakeshcalton August 2007

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Data Mining:Generally, data mining (sometimes called data or knowledge discovery) is the process of analyzing data from different perspectives and summarizing it into useful information that can be used to increase revenue, cuts costs, or both. 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.

Data Warehouse:Data warehousing is defined as a process of centralized data management and retrieval. 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.

Companies with a strong consumer focus - retail, financial, communication, and marketing organizations, primarily use data mining today. It enables these companies to determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data.

Data mining software analyzes relationships and patterns. Generally, four types of relationships are sought:·Classes: Stored data is used to locate data in predetermined groups.

·Clusters: Data items are grouped according to logical relationships or consumer preferences.

·Associations: Data can be mined to identify associations.

·Sequential patterns: Data is mined to anticipate behavior patterns and trends. .

Major Elements:1.Extract, transform, and load transaction data onto the data warehouse system.

2.Store and manage the data in a multidimensional database system.

3.Provide data access to business analysts and information technology professionals.

4.Analyze the data by application software.

5.Present the data in a useful format, such as a graph or table.

Reference:Data Mining: What is Data Mining?