Filippo Passerini knows that a customer who likes to lather up with Pantene shampoo is probably in the market for Olay moisturizer products too — and as Chief Information Officer (CIO) at Procter & Gamble, a growing part of his job is making sure that the company makes both sales.
“We connect the dots with the information we have,” he says.
After a year of hunkering down and slashing costs, many corporations are growing again — and technology is leading the way. A recent Gartner survey found revenue growth trumped cost cuts as CIO’s’ top priority for 2010.
Data mining is the process of extracting patterns from data.
Humans have been “manually” extracting patterns from data for centuries, but the increasing volume of data in modern times has called for more automated approaches.
“Pattern mining” is a data mining technique that involves finding existing patterns in data. In this context patterns often means association rules. The original motivation for searching association rules came from the desire to analyze supermarket transaction data, that is, to examine customer behavior in terms of the purchased products. For example, associations rule “beer ⇒ chips (80%)” states that four out of five customers that bought beer also bought chips.
Data mining in ERP applications can contribute significantly to the bottom line. Rather than randomly contacting a prospect or customer through a call center or sending mail, a company can concentrate its efforts on prospects that are predicted to have a high likelihood of responding to an offer.
Instead of sending an offer to all people, a company may only want to send offers to customers that will likely take the offer. It may also want to determine which customers are going to be profitable over a window of time and only send the offers to those that are likely to be profitable.
Is your ERP and CRM software helping grow your revenue and profit? Does your staff know how to data mine the tons of the historical customer data you have been accumulating over the years? Do you see your accounting staff and software as just an Expense Center rather than a Revenue Growth Center?
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