Business Understanding: This step involves understanding the problem that needs to be solved and

defining the objectives of the data mining project. This includes identifying the business problem,
understanding the goals and objectives of the project, and defining the KPIs that will be used to measure
success. This step is important because it helps ensure that the data mining project is aligned with
business goals and objectives.

Data Understanding: This step involves collecting and exploring the data to gain a better understanding
of its structure, quality, and content. This includes understanding the sources of the data, identifying any
data quality issues, and exploring the data to identify patterns and relationships. This step is important
because it helps ensure that the data is suitable for analysis.

Data Preparation: This step involves preparing the data for analysis. This includes cleaning the data to
remove any errors or inconsistencies, transforming the data to make it suitable for analysis, and
integrating the data from different sources to create a single dataset. This step is important because it
ensures that the data is in a format that can be used for modeling.

Modeling: This step involves building a predictive model using machine learning algorithms. This
includes selecting an appropriate algorithm, training the model on the data, and evaluating its
performance. This step is important because it is the heart of the data mining process and involves
developing a model that can accurately predict outcomes on new data.

Evaluation: This step involves evaluating the performance of the model. This includes using statistical
measures to assess how well the model is able to predict outcomes on new data. This step is important
because it helps ensure that the model is accurate and can be used in the real world.

Deployment: This step involves deploying the model into the production environment. This includes
integrating the model into existing systems and processes to make predictions in real-time. This step is
important because it allows the model to be used in a practical setting and to generate value for the
organization.

Data Mining refers to extracting or mining knowledge from large amounts of data. The term is actually a
misnomer. Thus, data mining should have been more appropriately named as knowledge mining which
emphasis on mining from large amounts of data. It is computational process of discovering patterns in
large data sets involving methods at intersection of artificial intelligence, machine learning, statistics, and
database systems. The overall goal of data mining process is to extract information from a data set and
transform it into an understandable structure for further use. It is also defined as extraction of interesting
(non-trivial, implicit, previously unknown and potentially useful) patterns or knowledge from a huge
amount of data. Data mining is a rapidly growing field that is concerned with developing techniques to
assist managers and decision-makers to make intelligent use of a huge amount of repositories.

Alternative names for Data Mining :

1. Knowledge discovery (mining) in databases (KDD)

2. Knowledge extraction
3. Data/pattern analysis
4. Data archaeology
5. Data dredging
6. Information harvesting
7. Business intelligence
Data Mining and Business Intelligence :

Key properties of Data Mining :

1. Automatic discovery of patterns

2. Prediction of likely outcomes
3. Creation of actionable information
4. Focus on large datasets and databases

Data Mining : Confluence of Multiple Disciplines –

Data Mining Process : Data Mining is a process of discovering various models, summaries, and derived
values from a given collection of data. The general experimental procedure adapted to data-mining
problem involves following steps :
1. State problem and formulate hypothesis – In this step, a modeler usually specifies a group of
variables for unknown dependency and, if possible, a general sort of this dependency as an initial
hypothesis. There could also be several hypotheses formulated for one problem at this stage. The
primary step requires combined expertise of an application domain and a data-mining model. In
practice, it always means an in-depth interaction between data-mining expert and application
expert. In successful data-mining applications, this cooperation does not stop within initial phase.
It continues during whole data-mining process.
2. Collect data – This step cares about how information is generated and picked up. Generally,
there are two distinct possibilities. The primary is when data-generation process is under control
of an expert (modeler). This approach is understood as a designed experiment. The second
possibility is when expert cannot influence data generation process. This is often referred to as
observational approach. An observational setting, namely, random data generation, is assumed in
most data-mining applications. Typically, sampling distribution is totally unknown after data are
collected, or it is partially and implicitly given within data-collection procedure. It is vital, however,
to know how data collection affects its theoretical distribution since such a piece of prior
knowledge is often useful for modeling and, later, for ultimate interpretation of results. Also, it is
important to form sure that information used for estimating a model and therefore data used later
for testing and applying a model come from an equivalent, unknown, sampling distribution. If this
is often not case, estimated model cannot be successfully utilized in a final application of results.
3. Data Preprocessing – In the observational setting, data is usually “collected” from prevailing
databases, data warehouses, and data marts. Data preprocessing usually includes a minimum of
two common tasks :
○ (i) Outlier Detection (and removal) : Outliers are unusual data values that are not
according to most observations. Commonly, outliers result from measurement errors,
coding, and recording errors, and, sometimes, are natural, abnormal values. Such
non-representative samples can seriously affect model produced later. There are two
strategies for handling outliers : Detect and eventually remove outliers as a neighborhood
of preprocessing phase. And Develop robust modeling methods that are insensitive to
outliers.
○ (ii) Scaling, encoding, and selecting features : Data preprocessing includes several
steps like variable scaling and differing types of encoding. For instance, one feature with
range [0, 1] and other with range [100, 1000] will not have an equivalent weight within
applied technique. They are going to also influence ultimate data-mining results differently.
Therefore, it is recommended to scale them and convey both features to an equivalent
weight for further analysis. Also, application-specific encoding methods usually achieve
dimensionality reduction by providing a smaller number of informative features for
subsequent data modeling.
4. Estimate model – The selection and implementation of acceptable data-mining technique is that
main task during this phase. This process is not straightforward. Usually, in practice,
implementation is predicated on several models, and selecting simplest one is a further task.
5. Interpret model and draw conclusions – In most cases, data-mining models should help in
deciding. Hence, such models got to be interpretable so as to be useful because humans are not
likely to base their decisions on complex “black-box” models. Note that goals of accuracy of model
and accuracy of its interpretation are somewhat contradictory. Usually, simple models are more
interpretable, but they are also less accurate. Modern data-mining methods are expected to yield
highly accurate results using high dimensional models. The matter of interpreting these models,
also vital, is taken into account a separate task, with specific techniques to validate results.
 Classification of Data Mining Systems :

1. Database Technology
2. Statistics
3. Machine Learning
4. Information Science
5. Visualization

1. Major issues in Data Mining :

1. Mining different kinds of knowledge in databases – The need for different users is not
same. Different users may be interested in different kinds of knowledge. Therefore it is
necessary for data mining to cover a broad range of knowledge discovery tasks.
2. Interactive mining of knowledge at multiple levels of abstraction – The data mining
process needs to be interactive because it allows users to focus on search for patterns,
providing and refining data mining requests based on returned results.
3. Incorporation of background knowledge – To guide discovery process and to express
discovered patterns, background knowledge can be used to express discovered patterns
not only in concise terms but at multiple levels of abstraction.
4. Data mining query languages and ad-hoc data mining – Data Mining Query language
that allows user to describe ad-hoc mining tasks should be integrated with a data
warehouse query language and optimized for efficient and flexible data mining.
 5. Presentation and visualization of data mining results – Once patterns are discovered it
needs to be expressed in high-level languages, visual representations. These
representations should be easily understandable by users.
6. Handling noisy or incomplete data – The data cleaning methods are required that can
handle noise, incomplete objects while mining data regularities. If data cleaning methods
are not there then accuracy of discovered patterns will be poor.
7. Pattern evaluation – It refers to interestingness of problem. The patterns discovered
should be interesting because either they represent common knowledge or lack of novelty.
8. Efficiency and scalability of data mining algorithms – In order to effectively extract
information from huge amount of data in databases, data mining algorithm must be
efficient and scalable.
9. Parallel, distributed, and incremental mining algorithms – The factors such as huge
size of databases, wide distribution of data, and complexity of data mining methods
motivate development of parallel and distributed data mining algorithms. These algorithms
divide data into partitions that are further processed parallel. Then results from partitions
are merged. The incremental algorithms update databases without having mined data
again from scratch.

Advantaged or disadvantages:

Advantages of Data Mining:

1. Improved decision making: Data mining can help organizations make better decisions by
providing them with valuable insights and knowledge about their data.
2. Increased efficiency: Data mining can automate repetitive and time-consuming tasks, such as
data cleaning and data preparation, which can help organizations save time and money.
3. Better customer service: Data mining can help organizations gain a better understanding of their
customers’ needs and preferences, which can help them provide better customer service.
4. Fraud detection: Data mining can be used to detect fraudulent activities by identifying patterns
and anomalies in the data that may indicate fraud.
5. Predictive modeling: Data mining can be used to build predictive models that can be used to
forecast future trends and patterns.

Disadvantages of Data Mining:

1. Privacy concerns: Data mining can raise privacy concerns as it involves collecting and analyzing
large amounts of data, which can include sensitive information about individuals.
2. Complexity: Data mining can be a complex process that requires specialized skills and knowledge
to implement and interpret the results.
3. Unintended consequences: Data mining can lead to unintended consequences, such as bias or
discrimination, if the data or models are not properly understood or used.
4. Data Quality: Data mining process heavily depends on the quality of data, if data is not accurate
or consistent, the results can be misleading
5. High cost: Data mining can be an expensive process, requiring significant investments in
hardware, software, and personnel.