Data mining is a method of identifying and extracting hidden patterns from within data. Identifying unusual patterns or behavioral anomalies is the key goal of this process. By analyzing the numbers your business produces, you can see what the normal ups and downs of your business look like on a chart. When something out of the ordinary occurs, it will stand out like red flag.
Companies spend millions of dollars to install data mining software that automates much of the process. Wal-Mart, the world’s biggest retailer, has spent billions of dollars on their own approach to business intelligence and data-mining. That is the secret to their great success.However, small businesses need not spend millions. All you need is a spreadsheet and the willingness to enter your own sales data on a regular basis. You can use Microsoft Excel or Sun Open Office; If you have consistent net connectivity, than Google Docs will also work fine. Mac owners can use any of the above programs, plus Apple Works.
“The Goal: Spot Economic Changes before the Professionals Do”
Although every firm is different, you can attack the data the same way. You need to be a little creative in your approach, whether you are selling cars, software or accounting services. Your goal is to find typical and aberrational patterns in your sales and other data.
The main idea behind data mining is that your business might show stresses or improvement in the economy before the official data picks it up. Sooner or later, what the Bureau of Economic analysis puts together is data from 1000s of businesses like yours.