What Is Data Mining?

What Is Data Mining?

You may have heard that knowledge is power. Never has this adage been more true than in recent times. Individuals, companies, industries, and governments pay top dollar to acquire valuable knowledge, information, or data because they understand its power.

These days, there is an entire industry based solely on acquiring data, known as the “big data” industry. So, what exactly are they doing with all this data? And how is it helping them?

Today, we will discuss an essential aspect of Business Intelligence (BI) called data mining to explain what happens to collected data and how businesses are taking advantage of it.

Let’s begin.

What Is Data Mining?

Data mining refers to the process of transforming raw data into meaningful information. With the help of big data, relevant software, technologies like machine learning, and other forms of artificial intelligence (AI), data mining enables us to look for trends and patterns in large quantities of data.

These trends and patterns are typically impossible to find by humans because they are hidden within large data sets. It would be nearly impossible for anyone to process so much data together without the help of technology.

Businesses use data mining to make sense of raw data because it can give them valuable information about their business, customers, products, and other things that help develop more effective production, marketing, sales, growth, and expenses.

Data mining entails exploring, identifying, and analyzing large quantities of information to pick up meaningful trends and patterns. Businesses or organizations can use these trends and patterns in many ways, depending on the data set.

For example, consumer information may be used to look for marketing trends and patterns, and expense information may be used to understand credit risk management. Similarly, other things like spam email filtering, product performance, fraud detection, and user opinions may be derived from data mining efforts.

However, data mining is just one aspect of Business Intelligence (BI), and it relies heavily on other factors like efficient data collection, data warehousing, and computer processing to work effectively.

How Does Data Mining Work?

The data mining process entails five key steps. Various online resources may differ in their opinion on the number of steps. However, they are all relatively similar and refer to the following five steps.

  • Step 1: Data is collected and uploaded to an organization’s data warehouses. You can dive deeper to learn more about data warehousing here.
  • Step 2: The data is stored and managed, either in the cloud or in-house servers, depending on the type of data warehouse being used by the organization.
  • Step 3: Business and data analysts, management teams, and IT professionals decide how to organize the data and launch a query.
  • Step 4: Application software sorts and organizes the data according to the query.
  • Step 5: The data is displayed or presented in an easy-to-share format like a graph, chart, or table for easy understanding.

Data Warehousing

Data warehousing is a crucial aspect of Business Intelligence and plays a huge role in data mining. It refers to the collection of a large amount of data for sorting and organizing. Businesses use it to store their historical data in a central location for convenient access.

Once stored, they can then use this data for data mining and data analytic purposes. This data may be organized in various ways depending on the needs of the organization. Regardless of how it is organized, data helps make calculated decisions for the business.

Data Mining Software

Data mining software analyzes the patterns and relationships in the data sets of the data warehouse based on the queries requested by the users. Businesses can use data mining software and programs to create categories of helpful information.

For example, a toy manufacturer may use data mining to determine when to launch a new toy. The software can process the collected historical data and create categories based on when customers demand that particular toy.

Data mining software is also used for clustering, i.e., data clusters are created based on their relationships, associations, and/or patterns to determine trends. Clustering can reveal significant insights about things like consumer behavior, market trends, etc.

Social Media Marketing and Other Applications

Data mining has greatly benefitted social media marketing. Major social media platforms like Twitter, Facebook, and Instagram collect vast amounts of data about individual users to make very accurate deductions about their preferences.

This information is then used for marketing purposes by directing highly targeted ads to the users. If you ever wondered how you received highly relevant ads on social media platforms, it is probably because of data mining.

However, you should also know that the same data mining applications are also used to predict, influence, and alter user behaviors and preferences. Such data mining applications are not just used for product marketing by social media platforms but also for other things like political influencing.

There have been many instances of data mining being used by social media platforms for nefarious purposes. A recent example would be The Facebook-Cambridge Analytica Data scandal.

Some tech giants like Amazon have incredible applications of data mining, BI, machine learning, and AI, allowing them to predict, with high accuracy, what products and individuals will demand in the future. This allows them to ship that product closer to the consumers before they even order it.


Data mining is a superior technology that can turn raw, seemingly meaningless data into invaluable information for organizations and businesses. Its applications in Business Intelligence are beneficial for companies of all sizes and industries.

It helps them save resources, target their efforts efficiently, and make calculated decisions about their business and its operations. It gives you the power of knowledge, which can propel your business to new heights.

If you aren’t currently using technologies like data mining, BI, machine learning, and AI for your business, you are missing out. We highly recommend that you start immediately to get an edge over your competition and meet modern demands.

If you want to learn more about data mining or about how your business can take advantage of data mining or BI, please visit our website today.