Phone cases and screen protectors
A phone shop looks at its sales. Nobody asked a question. But a computer finds something: people who buy a phone case often buy a screen protector in the same week.
Now the shop puts the screen protectors next to the cases. Sales go up. This is what happens when a business learns from its data.
Key words
| Word | What it means | Example |
|---|---|---|
| Data mining | Searching large data for patterns nobody asked for. | Cases and screen protectors are bought together |
| Reporting | Answering known questions again and again, for example every week. | Sales each month |
| Business intelligence | Using data to help a business decide. | Which shop should open late? |
| Financial planning and analysis | Using data to plan money: a budget (a plan for money), costs and a forecast (a guess about next year). | What will we earn next year? |
| CRM | Customer relationship management. Software that holds what we know about each customer. | A list of customers and their orders |
| Customer analytics | Studying customer data to see who buys what, and when. | Who has stopped buying? |
| Pattern | Something that repeats in the data. | Sales rise every December |
| Scale | How much data there is, and how fast it grows. | 50 rows or 50 million rows |
| Database | An organised store of data that you can ask questions. | Customers and orders |
| Data warehouse | A store of cleaned data (checked and fixed) in one agreed shape, for reports. | All sales of a chain |
| Data lake | A store of raw data (not changed yet) in any format. | Shop payment logs and emails |
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Data mining: find what nobody asked
Data mining searches large data for patterns. You do not start with a question. The computer looks for things that repeat or go together.
Mining needs a lot of data. A pattern in 10 rows may be luck. A pattern in 10 million rows is much more likely to be real.
Quick check: mining or reporting?
Have a go
Quick check: mining or reporting?
3 questionsYour answers are marked here and are not kept. A college account keeps every student’s marks.
Business intelligence
Business intelligence means using data to decide better. Reports, charts and mining all give it facts.
Two big uses are money and customers. Finance teams use data to plan. Customer teams use data to look after customers and to write to them.
What business intelligence is used for
| Use | What it does | Example |
|---|---|---|
| Financial planning and analysis | Plans money. Compares real costs and the money coming in with the plan. | The shop sees that costs are rising and changes its budget. |
| CRM: customer analytics | Studies what customers buy and when. | Finds the customers who have not ordered this year. |
| CRM: communications | Sends the right message to the right customer. | Sends a discount email to customers who stopped buying. |
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The tool depends on the scale
A small club with 50 members can keep a spreadsheet. A shop with 10,000 orders needs a database.
A chain (many shops with one name) with millions of sales a day needs a data warehouse, a data lake and mining tools. The bigger the scale, the stronger the tool must be.
Scale and tool
| Scale | Example | Tool that fits | Why |
|---|---|---|---|
| Small: tens of rows | A club list | A spreadsheet | Easy and cheap |
| Medium: thousands of rows | One shop's orders | A database | Fast questions, safe storage |
| Big: millions of rows | A chain's sales | A data warehouse and mining tools | Too much for one spreadsheet or one server |
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