Data Mining Essay

Submitted By sschro
Words: 647
Pages: 3

What is data mining? How can it be integrated into the business strategies?
Data is collected from different operational databases, this data is limited in scope and therefore is used mainly for transaction processing When the summarized data from different departments within the company is collected it is stored in a data warehouse in a multidimensional database. The information that can be pulled from this data is used to support decision making. However the way the information is stored in cubes, layers upon layers, needs a system to extrapolate it, this is where data mining is used. Queries are made using data-mining tools providing answers to complex operational questions. With sales, accounting, purchasing, customers, marketing and other information now able to relate to each other the organization has a wealth of business intelligence.
Business strategies are developed by an organization to have a strategic advantage over their competitors. Business intelligence drawn from data mining gives the ability to “make effective, important, and often strategic business decisions” (Haag 7). Without timely and pertinent information a company will lose their advantage. In our competitive, global world we now live information that leads to business intelligence should be a first priority.

How could a process in a value-chain be value-reducing? How could that happen? Support this with an example if possible.
A value-chain is comprised of business processes that add value to a product or service. The bottom half of the chain or the primary value processes “takes in raw materials and makes, delivers, markets, and sells the …products or services” (Haag 26). The top half supports the primary value processes in human resources, purchasing, technology development etc. The success of an enterprise depends on how well the whole value-chain operates, if run well creating a profit or margin.
If a process is value-reducing one or more parts of the chain aren’t running efficiently. One example of value-reducing on the support side would be procurement falling behind in ordering raw materials, shutting down an assembly line. Costs would run up and revenue would be down until the situation was corrected. On the primary value side if marketing were to mistake a customer needs and lose their contract revenue would decrease disrupting the whole chain.
What this illustrates is that a value-chain is only as strong as its weakest point. The process has to be continually monitored implementing changes when necessary to avoid processes that reduce value.

Why is managing information as a resource important to an organization? Include information ownership in your discussion. Information when collected and used