Report on "Data mining digs in" by Jennifer Lach

American Demographics; Ithaca; Jul 1999; Jennifer Lach;

"Data mining digs in" by Jennifer Lach is an article in which the author discusses the many uses of data mining software in business. The article focuses on the benefits and expectations of business with regard to expert software used for data mining. Topics discussed include instances in which data mining has shown new business opportunities, specific software packages, and the benefits those companies are deriving from these products.

One area in which expert software is showing great promise is the insurance industry. IBM’s DecisionEdge software is being used to find new correlations between the many variables stored about customers. An example of this is the fact that sports car drivers who have families are much lower risks than sports car drivers who do not. Automated discovery of data patterns through the use of expert systems is becoming the norm in this industry.

Sophisticated computing systems utilizing artificial intelligence techniques turn various hypotheses into functional models. Pattern recognition software utilizing genetic algorithms, association rules and neural networks are capable of providing decision-making information that aids companies in determining solutions that increase efficiency and profits. The same technology also has powerful abilities to make forecasts and predictions.

A survey shows that more than one-half of companies who currently operate data warehouses are planning to buy knowledge discovery tools this year. Currently less than one-tenth of these companies are using data mining software. Some big companies are even buying up other companies that already have expertise in data mining systems.

There are companies in direct sales industries who use data mining software to target selected customers with advertising that is closely tailored to their needs or situation and to develop new advertising. This increases the likelihood that the recipient of a catalogue will make a purchase. In fact models are run on each future recipient of the catalogue.

Some systems allow users to make queries from their desktops, thereby bypassing the IT personnel. This increases efficiency and allows marketing staff to answer the questions that they feel are important. IT staff may be attempting to answer the wrong questions.

One of the biggest tasks in data mining is preparation of the data for the intelligent software to do analysis. If the data is not complete, programs are used to generate data points that fill in the missing information.

Although many skeptics still exist, companies who do utilize intelligent knowledge discovery software are finding many new and innovative methods of finding new business patterns.

Companies are using expert software for data mining on an increasing scale. In less than three years this will become a 113 billion-dollar annual industry. The success of these companies is an indication of the importance of this type of computing application.

More and more companies are utilizing intelligent decision support software, the proliferation of data warehousing as well as, the size of data warehouses is growing at an increasing rate. Predictions show that this technology is becoming prolific. It is now being used in all aspects of business decision making.

Soon all businesses will be designing marketing strategies based on answers provided by intelligent decision support systems. This is going to affect free market consumer societies in a very big way.

Because this technology allows companies to target advertising directly at individual consumers. Individuals will soon be receiving unique advertising that is directed specifically at them. The content will be based on information gathered concerning recent purchases, lifestyle changes, or even on personal health issues. This will have wide-ranging social economic impact. As well, ethical issues will come into play as the morality of using expert software to target individuals for various marketing ploys is called into question.

The use of expert systems to develop various types of business solutions based on information that has been gathered through the use of advanced technology is important. It has the potential to affect the social attitudes, buying habits, and economics of the entire world. Neural networks, heuristic algorithms, and pattern recognition software are providing a plethora of information about private citizens. As a result, it is extremely powerful with a strong potential for good or bad that can affect everyone.

This course deals primarily with the use of machines that can perform human like analysis of various situations. The article discusses the use to which these systems are put, it also discusses current trends in data analysis. As such the two are inexorably intertwined.

The article discusses many of the expectations that users will have for an expert system. These expectations are very important in the creation of an expert system. By studying the needs and desires of the people who will actually be using a system, it is possible to design the system such that it will conform more closely to those needs. Not only must the knowledge engineer become an expert in the domain that the system is being created for; he must also take into account the needs of the system users.

This article also reinforces many of the differences between expert systems and traditional software. For example, the article makes it clear that expert decision support systems are put to better use if the system is under control of the people who will be using the information and not under control of IT staff.

Many of the primary uses to which expert systems are put are further discussed in the article. Thereby relating it even more closely to the course. At the present time the fundamental use to which these systems are put is decision support for large corporations. This relates to the textbook, which primarily discusses expert systems that are built for large companies.

In order to become familiar with the subject domain of expert systems, it is very important to study the uses to which the technology is put. In this article, the uses of existing and proposed expert systems are discussed. Thus, the article "Data mining digs in" by Jennifer Lach is closely related to the content of this course.