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Data Mining for Business Decisions

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Data Mining for Business Decisions
1. What are the business benefits of taking the time and effort required to create and operate data warehouses such as those described in the case? Do you see any disadvantages? Is there any reason that all companies shouldn’t use data warehousing technology?

Information is the most important tool when making business decisions. As O’Brien and Marakas stated, “Today’s business enterprises cannot survive or succeed without quality data about their internal operations and external environment.” Companies that have large amounts of available data can use the information to come up with operational advantages. The Data, Information, Knowledge, Wisdom (DIKW) Pyramid shows how raw data can become significantly beneficial after it is gathered, structured and analyzed. This model illustrates the importance of the data stored in the data warehouses.

As the pyramid suggests, data are more valuable to the business once the company develops connectedness and meaning, transforming it into information, knowledge, and eventually wisdom.
As described in the case, the following are the benefits derived by the businesses:
• Applebee’s utilized data mining technology to analyze both the front-of-house and back-of-house performances. They also used the stored data for effective inventory management (supplies replenishment) and identifying which products to promote.
• Travelocity, an online travel site, uses text analytics software by Attensity that extracts important unstructured information from emails, surveys and call center reports to improve customer service. They linked the unstructured data with the structured data from its Teradata warehouse to track trends and forecast events.
• VistaPrint is an online retailer that uses data mining to find issues regarding customer registration on their website. Using the data mining tool Visual Site, they walkthrough the registration process to identify and resolve process issues. In general, the following are the

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