Big Data, Data Mining, and Machine Learning: Value Creation for Business

Leaders and Practitioners. Jared Dean.

2014 SAS Institute Inc. Published 2014 by John Wiley & Sons, Inc.

PA RT
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Turning Data into

Business Value
54 BIG DATA, DATA MINING, AND MACHINE LEARNING

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his second part of the book shifts from the storage of data, preparation
of data, hardware considerations, and the software tools needed to
perform data mining to the methodology, algorithms, and approaches
that can be applied to your data mining activities. This includes a proven
method for effective data mining in the sEMMA approach, discussion
about the different types of predictive modeling target models, and un-
derstanding which methods and techniques are required to handle that
data effectively. From my experience, most business environments use
several people to perform each of the tasks. In larger organizations, the
tasks might be split across many groups and organizationally only meet at
the executive level of the organization. A quote from Shakespeare that I
have always appreciated to introduce this topic is:

If you can look into the seeds of time, And say which
grain will grow and which will not, Speak then to me, who
neither beg nor fear Your favours nor your hate.
Macbeth, Act 1, Scene 3

This verse shows an appreciation and understanding from hundreds

of years ago that those people who can predict future behavior have a
distinct advantage regardless of the venue. In sports, this is often call field
presence: the talent some players have to effectively anticipate where the
ball will be played and be there before the ball arrives. On Wall Street,
fortunes are won by correctly anticipating the movement of the market
in advance. In your business, correctly anticipating customer behavior or
reducing future expenditures has a real impact. The goal in this section is
to explain a methodology for predictive modeling. This process has been
in place for over a decade and proven useful for thousands and thousands
of users. I also discuss how this methodology applies in the big data era,
which reduces or makes optional the need for data sampling.
Part Two discusses the types of target models, their characteristics,
and information about their specific uses in business.
In addition, I discuss a number of predictive modeling techniques
to help you understand the fundamental ideas behind these tech-
niques, their origins, how they differ, and some of their drawbacks.
Finally, I present a set of methods that you might be less familiar
with that address more modern methods for analysis or analysis on
specific types of data.