Publications

DATE: 2008-05-29, Karen D. Schwartz

For years, large enterprises have turned to sophisticated data mining and predictive analytics tools to do just that. With these tools, companies can use their own data to build a predictive model that fits their business and feed the system a variety of sophisticated "what-if" scenarios to determine the best way to grow their business.

So what’s the problem? If data mining is such a valuable tool, why don’t more midmarket companies use them?

It’s not that they don’t want to, said James Kobielus, a senior analyst at Forrester Research of Cambridge Mass. It’s that these tools tend to be very complex, requiring a knowledgeable, specialized IT presence within the company -- something many smaller companies simply can’t afford.

But data mining vendors have gotten the message, and in the past several years, many of them are working hard to make their products more user-friendly. What’s more, other data mining vendors have surfaced that focus more specifically on the midmarket segment.

"All of these vendors have made their tools more user-friendly, and they don’t all require a PhD in statistics to use," Kobielus said. "They can all pull historical data from customers’ existing databases, and the Excel plug-in is also pretty much universal. Usability has definitely improved over the past five years."

Microsoft has been at the forefront of the trend, offering plug-ins to both Microsoft Office/Excel and SQL Server 2005. Using the Microsoft SQL Server 2005 Data Mining Add-In for Office 2007, for example, a business analyst can retrieve structured data sets from SQL Server, build an analytical data mart, and then apply a variety of statistical algorithms to the data to cluster the data into specific groupings. From there, the analyst can look for specific buying patterns among specific segments of customers, and then create interactive visualizations of the data, such as histograms and maps. The plug-ins also allow analysts t perform a variety of what-if analyses.

Other easier-to-use data mining tools come from companies like Angoss Software Corp., InforSense and Unica Corp.

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