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Data mining applications are computer software programs or packages that enable the extraction and identification of patterns from stored data. This type of tool is typically a software interface which interacts with a large database containing customer or other important data. Data mining is widely used by companies and public bodies for such uses as marketing, detection of fraudulent activity, and scientific research.
There are a wide variety of data mining applications available, particularly for business uses, such as Customer Relationship Management (CRM). These applications enable marketing managers to understand the behaviors of their customers and also to predict the potential behavior of prospective clients. An example of the kind of task that a data mining technique may assist with is the prediction of future client retention. For example, a company may decide to increase prices, and could use data mining to predict how many customers might be lost for a particular percentage increase in product price.
Data mining applications are often structured around the specific needs of an industry sector or even tailored and built for a single organization. This is because the patterns within data may be very specific. Banking data mining applications may, for example, need to track client spending habits in order to detect unusual transactions that might be fraudulent. In another example, an application might be used by a government body to detect associations between individuals who may be involved in terrorist activities.
Pattern mining is a term sometimes used to refer to the detection of industry specific patterns in particular types of data. Using this technique, data mining association rules may be detected which can give a likelihood of one characteristic or behavior being associated with another. An example of a data mining association rule detected by a data mining application analyzing data for a supermarket might be, for example, the knowledge that pasta and sauce are purchased together 90% of the time.
The value of data mining applications in business is often estimated to be extremely high. Some businesses have stored large amounts of data over years of operation, yet without an appropriate application are missing out on the very valuable information that may be contained within their existing data. The installation and use of data mining applications can sometimes be an investment that returns dividends quickly by enabling a business to leverage its existing information into more clients, more sales, or greater profits.