Data Mining in Excel

Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

Mining implies digging, and using Excel for data mining lets you dig for useful information - hidden gems in your data. In this lesson, we'll define data mining and show how Excel can be a great tool for finding patterns in information.

What Is Data Mining?

Data mining is also known as knowledge discovery, and if we have mountains of data to sift through, it can be a daunting task to make sense of it. How do you analyze so many numbers to look for patterns? How do we better understand our customers and our business based on sales data? You might assume that data mining would be something large companies with sophisticated databases would use, but there's an excellent tool for small-to-medium sized businesses - Microsoft Excel.

Excel is a piece of spreadsheet software developed by Microsoft over 25 years ago and is available on Windows, Mac OS, Android, and iOS platforms. A spreadsheet is basically a grid of rows and columns with cells that store data, and you can perform a wide variety of arithmetic and other functions on the information. Many people use Excel to 'crunch numbers' but it can also be used like a database to store and organize information. You can write automated routines (called macros) for repetitive procedures and you can also interface Excel with other programs to extract data for easier analysis.

Excel spreadsheets are organized in rows and columns
Sample Excel spreadsheet

So, our data mining operation might be looking through things stored in Excel like inventory lists, payroll numbers, info from the accounting system, sales data, etc. We could be looking for associations between different pieces of data, patterns, and trends. Maybe we can better determine who our target customer is and what kinds of things they like to buy so we can tailor our marketing accordingly. If we know what our customers' favorite products are, we can arrange to have more in stock and order them more quickly, so we don't run short. Data mining is widely used today because businesses have become much more focused on the customer - if they don't satisfy the customer, the customer has many more alternatives for sourcing things than before.

Why Excel For Data Mining?

Excel is readily available and is relatively inexpensive, given the capabilities it possesses. Excel training is available from private training companies and community colleges for those who need to enhance their skills. There are also outside consultants who specialize in tailoring Excel to a specific business requirement and Excel add-ons available for special purpose applications such as data mining.

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