How Does Data Mining Work
The Main target of every business is to acquire cent percent satisfaction from its customers and to improve its sales .Many internal auditors who work for customer –focused industries use the technique of data mining to improve the sales of the business.It is essential that every business uses this technique and tools to improve and enhance business activities.
The Data Mining Tool is a software application that is used to interact with customer data that is present in a large database. This tool when activated automates the database and calculates the future of the business using defined algorithms and applications.This helps the companies to take proactive decisions and resolve the problems that are time consuming.This tool also aids the marketing officials to analyze the behavior of the customers and the clients.Let us consider an example. A company decides to raise the cost of few products. It uses the data mining tool to understand the percentage of people who would accept the increase in price. So with the help of this the business can predict its profit and loss. The data mining applications are usually used in larger sectors. But nowadays there are several smaller organisations that use this tool for enhancing the business. Each application is tailored according to the industry in which it is used in. It is the auditor’s responsibility to support the security of the data that is stored in the database.
· The Tools of Data Mining
It is essential that every business must first understand the different types of data mining tools that are required for the organization. This is because there are several kinds of tools available in the market. Every tool has its own advantage and disadvantage. It is necessary for one to choose the right tool and avoid adverse developments. There are three types of data mining tools Traditional, Dash boards and Text-mining tools.
· Traditional Tools
This tool uses complex techniques and programs to analyse the patterns and the trends of the data. It can be installed into the computer to check the data that is captured out of a databse.The tools are available in both the versions of Windows and UNIX.
· Dash Boards
They are used to update the various changes in the data. The updated data will be reflected on the screen in the form of a chart or a table. This tool facilitates the user to analyse the performance of the business. The tool is user-friendly and it provides the complete overview of the company at the stroke of a key.
This tool enables the user to extract data from various kinds of text. One can transfer several pdf documents to text files using this tool. The main highlight of the tool is that it can convert a content that is scanned to any format that is compatible to the tool. This helps the user to get access to the data without any difficulty.The contents can be altered according to the requirements of the user. The tool can also be used to find fraud activities in the business.
The Techniques and Application of Data Mining
The data mining tool uses several techniques. The Major techniques are the Decision Trees, Artificial Neural networks. The artificial neural networks are mainly used by the auditors at the time of reviewing fraudulent activities. These applications are generally used in situations where the data is reused. The decision tree is the application that helps to evaluate the business on terms of decision sets. Each set has different set of rules that are use to segment the data. The application is user-friendly and is considered to be the best cost-effective strategy used in the business.In order to get the complete effect from these techniques, it is necessary that the business must usean interactive data mining tool that is flexible and effective. The real value that lies behind the data-mining tool is the way it is structured and the model used to capture the data. All the data that is captured by the tool is based on the criteria specified by the user.
The National Research council, United States uses the Data-mining tool to spot terrorist activities. Installing a data mining tool in a business would increase audit benefits and cut potential risks.