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Building the Business Case
Uncovering the Needs for Data
Mining in your company
• There may be many places within your company
where data mining can be used. The first step in
building a business case for data mining is to find
an opportunity to use it. Here are the possible
– Poorly executed CRM or Simple Campaign
– Poorly matched Customer Investment to Customer
– Inability to Transition Customers to Higher Value States
Defining the Business Value
• The most important part of the equation in creating your
business case will be the definition of business value that
you use or how you will measure the value of the data
mining project. There are many ways to measure the value
besides a profit or return on investment:
Increased Revenue
Decreased Costs
Return on Investment (ROI)
Competitive Advantage
Early Adopter
The Costs
• From the business side, the value can be varied and can be measured in
a variety of different ways – some of them quantitative and factual;
others harder to measure and more strategic in nature.
• The cost side of the equation is more straightforward and its
components less likely to change from implementation to
– The Data ( collecting, storing, processing, cleansing, and paying for the
– Pricing the Infrastructure (data mining software)
– Pricing the Personnel (Data miner, Web Interface designer, Data
Designer, Project Manager, Marketing Interface and Database Interface)
– Costs to sustain
– Containing Costs: Leveraging Existing Investments