Download 9 Laws of Data Mining

9 Laws of Data Mining
Presented by Rob McCullagh, Sen, Account Manager
23/09/2014
London
Formerly SPSS Ireland
From Business Intelligence to Predictive Analytics
From Business Intelligence to Predictive Analytics
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Bus. Intelligence
Predictive Analytics
Sense and respond
Predict and act
Back office
Point of impact
Skilled analytics experts
Everyone
Instinct and intuition
Real-time, fact-driven
Automated
Optimized
So why are we here?
Inserting “intelligence” at key decision points in
business processes to improve outcomes
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In the Beginning – Data Mining - The Silver Bullet?????
And then there was CRISP
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The 9 Laws of Data Mining
Thou shalt not...........
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The 9 Laws of Data Mining
1st Law - Business Goals
2nd Law - Business Knowledge
3rd Law - Data Preparation
4th Law - NFL-DM
5th Law - Watkins’ Law
6th Law - Insight
7th Law - Prediction
8th Law - Value
9th Law - Change
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First Law - Business Goals Law
1.
Business objectives are the origin of every data mining solution
29% Profit
Improvement
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Multi-product Car insurance Car insurance Line of Credit Life insurance Life insurance
Conventional
Campaign
optimization
Second Law - Business Knowledge Law
Business Knowledge is central to every step of the data mining process
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Third Law – Data Preparation Law
Data preparation is more than half of every data mining process
“Problem Space Shaping”
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Fourth Law – No Free Lunch for Data Miners
NFL-DM”: The right model for a given application can only be discovered by
experiment
1.
Problem not Defined
2.
Multiple questions
2. Up sell
3.
Data Prep. Impacts
model value
3. Cross sell
4.
Business objectives
change
CUSTOMER TRACKS
1.
Welcome
4. Churn
Prevention
5.
Reactivation
6. Winback
7. Priority
service
8. Seasonal
offers
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Fifth Law – Watkins Law
“Watkins’ Law”: There are always patterns
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Sixth Law – Knowledge Amplification Law
Data mining amplifies perception in the business domain
How Data Mining produces insights
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Seventh Law – Prediction Law
“Prediction Law”: Prediction increases information locally by generalisation
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Eight Law – Value Law
“Value Law”: The value of data mining results is not determined by the accuracy
or stability of predictive models
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Ninth Law – Law of Change
“Law of Change”: All patterns are subject to change
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Thank you
Data House
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Kilmainham
Dublin 8, Ireland
18Formerly
SPSS Ireland
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EMAIL
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