The knowledge discovery involves finding patterns or behaviour within the data that lead some profitalbe business action. Data Mining requires the large amount of data including history data as well as current data to explore the knowledge. Once the required amount of data has been accumulated from the various sources, it is cleansed, validated and prepared for storing it in the data warehouse or data mart. BI reporting tool capture the required the fact from these data to be used by the knowledge discovery process.
Data Mining can be accomplish by one or more of the traditional knowledge discovery techniqes like Market Barket Analysis, Clustering,Memory Based Resoning, Link Analysis, Neutral Network and so on.
Data Mining Life Cycle Model
Find Out Business Problem Consider Company's currrent year sale is dropped by a percenage when compared to the last year. By using OLAP Tools, the exact the fact can be determined across the serveral dimension like region, time, product,,,,,,,
Knowledge Discovery Given the business problem, various reasons for the decrease in the sales have to be analyzed utilizing one or more data mining techniques. Causes may include the poor quality of the product or services or flaws in making scemes or less demand for the product or seasonal changes or regulations enforced by the government or competition pressure and so on.The exact solustions has to be find out in order to resolve this sales drop, which call it Knowledge Discover here.
Implement the knowlege Based on the upon discovery, proper actions should be taken in order to overcome this business problem.
Analyze the Results Once it has been implemeted, results needs to be monitored and meaused to find out the outcome of the actions.
OLAP Vs. Data Mining OLAP helps organization to find out the measures like sales drop, productiviy,service response time,inventory in hand. In simple terms, OLAP tells us 'what has happended' and Data Mining helps us to find ' Why it has happend ?'. Data Mining is also used to predict ' What will happen in the future ?' with the help of the data patterns available within the organization or publicaly availably data.
Say For Example Suppose a borrower with a bad credit and employement history applies for the mortgage loan, his application may be denied by a mortgage lender since he/she may default the loan is approved. The mortgage lender would come to this decision based on the historical data mined following a similar pattern.