Data Mining as a Knowledge Management Tool discussed in class November 1, 2012.

Data mining is an extraction activity with the goal of discovering hidden facts contained in databases (Dalkir 465).  Using “machine learning, statistical analysis, modeling techniques and database technology, it can reveal patterns of behavior that will allow future behavior to be predicted (Dalkir 272).  It is significant in the areas of “market segmentation, customer profiling, fraud detection, evaluation of retail promotions, and credit risk analysis” (Dalkir 465).  I liked the example in our text of the relationship between the purchase of beer and diapers by new fathers.

Large numbers of inputs over long periods of time can be used to forecast future results and can be as simple as a decision tree or regression analyses or can be very complex models (Dalkir 272).   I think the issue of privacy and data mining is an interesting one.  Shoppers are happy to give up their privacy to stores with free rewards memberships.  Stores then know when and where you shop, what you buy, and how much you spend in exchange for small discounts.  I don’t think that shoppers understand how much information can be collected and stored about them.  I watched a YouTube video from SAS, a company that does data mining and analytics for business solutions.  It makes the point about the huge amounts of data available about your “stakeholders, operations, suppliers, and customers”.  They promise to “chew through data” to discover “trends, patterns, and relationships” and apply analytics so you can make business decisions based on facts (SAS).  The comments after the video were interesting in that a person points out that data mining can also be used for spyware, malware and virus based activities. 

Other uses for data mining have been in the area of health care.  The HIPAA or Health Insurance Portability and Accountability Act of 1996 addressed, among other things, the privacy of health information that became possible only after data mining methods made it possible to discover and patients had not consented to the disclosures.  One current related issue has resulted in a lawsuit by customers against Walgreens for selling prescription information to data mining companies even though it no longer identified individuals (Harlow).  I think there was fear that individuals could later be re-identified and that the people had not consented to allow Walgreens to disclose their health information.  

I read about another interesting use of data  mining in a story run by the Associated Press in August that revealed that Mitt Romney was using a “secretive data-mining project to identify new and wealthy donors” (Politico).  The information was from consumers and the data was used like businesses looking for sales leads based on past consumer activity.    With the large amounts of information in the world today, data mining will continue to be an important method of managing knowledge. 

Works Cited

Dalkir, Kimiz.  Knowledge Management in Theory and Practice.  Cambridge: MIT Press, 2011. Print.

Harlow, David. “Pharmacies Selling Prescription Information to Data Mining Companies.” MedPageToday. 30 June 2011. Web. 7 Nov. 2012.

Politico. “Mitt Romney Uses Secretive Data-Mining.” Politico.com 8 August 2012.  Web.  8 November 2012.

SASsoftware. "Manage the Data Deluge with Data Mining and Predictive Analytics." Online video clip. YouTube. YouTube, 5 Aug. 2011. Web. 10. Nov. 2012.