Data Mining: A New Arsenal for Strategic Decision-making

Abstract

During the early years of database management the contemporary wisdom was to store only ‘useful data.’ In large part, this philosophy was encouraged because of the then-limited storage capacity offered by the prevailing technology. Then along came the microprocessor revolution, enormously expanding the scope of data storage. Subsequent advancement in information technology and recognition of potential business opportunities thereof, resulted in enormous expansion of data storage. Although the future is unknown and unpredictable, it often provides new business opportunities. Thus, new management strategies emerged which encouraged the massive accumulation of data and thus the advent of data warehousing. These massive data depositories are now providing both challenges and opportunities for strategic decision-making concerned with improving existing businesses and exploring new business opportunities. Data mining is an essential part of the process involved in locating relevant information from data warehouses for use in making such strategic decisions. Naturally, business leaders everywhere are willing to make investments in corporate data warehouses to enhance their access to information. The return on such investment is by no means guaranteed but all business activities include a certain amount of risk.