Understanding the Difference Between Data Warehousing and Data Mining

In modern businesses, data as a resource is nearly as important as the products being sold or the services provided. This is true both inside and outside the technology sectors. A company that does a good job collecting and analyzing data will have the edge when it comes to learning what their customers need, what they are willing to pay for, what type of marketing approach will engage them, and so much more. When it comes to getting the most out of data for an organization, two main concepts need to be understood: data warehousing and data mining.

At the most basic level, a data warehouse is an environment where information for a company is stored, whereas data mining is the process by which said data is both accessed and used. A data warehousing strategy is effectively useless without a data mining strategy, and data mining is impossible (or, at the very least, far less effective) without data warehousing. Taking some time to learn more about these respective activities will help to illustrate the importance they each have for your business.

Data warehousing and its benefits

Data warehousing is the process by which important data gleaned from an organization (and even outside the organization) is gathered and stored in one schema. This data warehouse will include historical data as well as new data, so it can be easily accessed from the same place where it can be used for various tasks. A data warehouse is not used for transaction processing, though it typically will include transaction data. Once data is imported into the warehouse, it typically will not change going forward. Instead, it will be accessed and copied for various uses, leaving the original data untouched to be used again in the future.

A properly set up and managed on-prem or cloud data warehouse will provide numerous important benefits to your organization, including:

  • Centralized data location – Having all relevant business data in one centralized location makes it easier to access analytics, data mining, and other functions.

  • Efficiency – Another benefit of keeping data in one logical place is that it is much more efficient in cost and hardware usage than setting up separate storage solutions for each type of data.

  • Format consistency – Data warehouses have information fed into them from various sources, which is then converted into one format. This makes it easier to access and use information from any source.

  • Regulatory compliance – Virtually all businesses today are obliged to meet a variety of regulatory requirements when it comes to the information they collect. A data warehouse keeps historical information available, so it can be accessed at any time, which is often critical for audits and other compliance measures.

Of course, your business will enjoy many other important benefits as a result of implementing an effective data warehousing strategy. The specific advantages will depend largely on what type of business you operate and how your organization uses the data stored within the warehouse.

Data mining and its benefits

Data mining is a process used to analyze and extract useful or actionable information from a data warehouse. This process is often referred to as data analytics , and when done properly, will help to power your business intelligence and global strategies. A company with an effective data mining strategy in place will not need to rely on guesswork when making decisions; instead, they can develop data-driven strategies to give them a solid competitive edge. Companies that develop a comprehensive data mining process will enjoy many benefits, including:

  • Improvements in marketing – Data mining will identify patterns in customer activities to optimize your marketing efforts.

  • Predicting industry trends – Advanced analytics can often predict industry trends, which will give you an edge over the competition.

  • Evaluating risk – When making various decisions, data mining can help identify risks that may have otherwise been overlooked. This helps you make better strategic moves with fewer missteps.

  • Industry-specific benefits –One of the best things about data mining is that the advantages are based largely on the specific data held in the warehouse. This means the way it helps your business will be unique to the industry in which you operate.

Implementing or modernizing your data warehouse and mining strategies

Whether you are looking to implement a data warehousing strategy for the first time or want to go through data warehousing modernization, there are many options to consider. A growing number of businesses are using Data Warehouse as a Service (DWaaS), which provides all the advantages of a modern data warehouse without handling the implementation and support internally. This is almost always set up on a cloud data warehouse, which helps to make your information further accessible for teams throughout your organization.

If you want to work with data warehouse implementation and modernization experts, Trianz consultants are up to the task. We have experience with all the top data warehousing companies and can help you determine the optimal approach for your business.

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