Business Intelligence and Analytics: Improving Your Competency
title=Data Mining and Statistical Analysis} Level No. 3: Data mining and statistical analysis This level goes beyond simple queries and top-ten lists to explore relationships, trends and patterns within data. Typically a manual exercise, this generally requires a specialized resource that is both technical and business-focused, with mastery of corporate data elements. Similar to a goldminer following a vein to uncover additional ore, this hypothesis-based analysis improves insight and answers questions such as, "Why are things happening?" Answers to questions such as, "What if?" typically generate additional questions for deeper analysis and insight.Level No. 4: Analytical insight and predictive modelingIn this evolutionary stage, companies leverage advanced modeling software and analytical tools to understand pertinent relationships among numerous data sources and multiple variables across the business. Through the power of complex computing and automation, companies are able to identify patterns, trends, segments and clusters within the data to improve insight. Whereas the human brain can process and visualize a two-axis XY chart or a three-axis, multidimensional data view (imagine the three-dimensional chessboard on Star Trek, today's computers and advanced software can process data relationships across hundreds of variables simultaneously. This process can also leverage modeling to predict future outcomes to enable you to focus your resources more effectively. Some questions that are answered at this stage include, "What customers are most likely to defect?" and "Which prospects are most likely to respond to a certain offer?" Level No. 5: Resource optimization In this phase, companies optimize resources based on their unique constraints and parameters. This level answers questions such as, "What should we do now?" and "What is the best outcome that can occur given our current available resources?" and "How can we optimize staffing levels, inventories and service levels?" Nirvana! Where is your company with regard to the five levels of BI? Where is your competency in this area? Is it tactical or strategic? Where are your resources located? Are they centralized or decentralized? Is the capability shared across business functions? Is there an established process to investigate new opportunities with significant returns?