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Art deco aesthetic, minimalist image depicting a chaotic mix of musical notes, numbers, and time signatures scattered randomly on the left side, gradually transitioning to an organized, complete musical score on the right side with evenly spaced notes and structured time signatures. Surround the musical score with small data charts, binary code, and sleek glowing lines symbolizing data flow and AI intervention. The background features a gradient with subtle musical notes and circuit patterns, illustrating the transformation from disorganized data to a harmonized state.—What is data normalization by Talbot West

What is data normalization in data preprocessing?

By Jacob Andra / Published July 16, 2024 
Last Updated: July 30, 2024

Data normalization is a step in data preprocessing that involves adjusting the values of data attributes to a common scale, without distorting differences in the ranges of values.

Enterprises have data in diverse formats and sources: databases, spreadsheets, documents, APIs, and more. These data sources may have different formats, units, and scales.

Normalized data is also compressed, meaning that your AI can ingest more substance and less fluff, which makes for improved performance.

For example, Wang, et. al. demonstrate that 2NF normalization can reduce a sales database by more than 79%.

Main takeaways
Normalized data improves AI model accuracy.
Standardizing text ensures consistent interpretation.
Normalization speeds up data analysis.
Normalization reduces bias for fairer AI predictions.
Normalization gives you increased ROI on your enterprise AI investment.

What is the purpose of data normalization?

Data normalization lays the foundation for balanced AI analysis, fair feature comparison, and overall improved model performance. Think of it like tuning instruments and adjusting microphones before a concert: skip it, and some elements will overpower others, distorting the overall output.

There are many different use cases for enterprise AI implementation, and most of them rely on the AI's ability to interpret data accurately and without bias. All features need to be standardized for maximum fairness in the AI's interpretation.

Data normalization is how we prepare your entire dataset, including numbers, text, and categorical data, to be interpreted equitably by the AI system. This includes scaling numerical features, standardizing text formats, and ensuring consistent terminology usage across your knowledge base.

The basics of data normalization

At its core, data normalization is about creating a level playing field for all your data. It's like establishing a common language across your entire knowledge base.

Here are the "3 S's" of data normalization:

  1. Scaled: we want to bring all numerical features to a common range. This prevents features with larger scales from dominating the analysis and ensures each feature contributes proportionally.
  2. Standardized: we unify the format of textual data across all documents. This includes consistent capitalization, punctuation, and special character usage. Standardization ensures the AI interprets similar information consistently, regardless of its original format.
  3. Streamlined: we focus on creating a unified vocabulary and terminology across the knowledge base. This involves standardizing acronyms, industry terms, and naming conventions. Streamlining helps the AI recognize and relate similar concepts, even when expressed differently in various documents.

Our data normalization process

Here are our basic steps to effective data normalization:

  1. Assess feature scales: we evaluate your knowledge base to identify numerical features with varying scales. We determine which scaling method (e.g., min-max normalization, z-score normalization) is most appropriate for each feature.
  2. Standardize text formats: we analyze textual data across your documents, identifying inconsistencies in capitalization, punctuation, and special character usage. We then apply uniform formatting rules to standardize all text entries.
  3. Unify terminology: we create a comprehensive list of terms, acronyms, and industry-specific language used throughout your knowledge base. We then standardize these terms to ensure consistent usage across all documents.
  4. Apply numerical scaling: we implement the chosen scaling methods to bring all numerical features to a common range, usually between 0 and 1. This prevents features with larger scales from dominating the analysis.
  5. Normalize categorical data: we address categorical variables by applying techniques such as one-hot encoding or label encoding, depending on the nature of the data and the requirements of the AI system.

If you’d like to explore how data normalization can drive efficiencies in your workplace, request a free consultation with Talbot West. We can discuss specific tools, implementations, and risk management strategies.

Get in touchAn art deco-styled image showing a chaotic mix of raw data elements on the left side, including numbers, letters, and geometric shapes scattered randomly. As the image transitions to the right, these elements gradually transform into neatly organized forms and tables, symbolizing the different forms of data normalization. Sleek glowing lines symbolize data flow and AI intervention, organizing the data into 1NF, 2NF, and 3NF forms. The background features a gradient with subtle grid and circuit patterns, representing the structured, orderly nature of normalized data.—Data normalization form examples by Talbot West

Data normalization examples

Here are ten examples of how data normalization ensures balanced and accurate AI analysis.

Scaling numerical features

  • Industry: retail
  • Scenario: an e-commerce platform is training its AI expert with customer purchase data.
  • Issue: purchase amounts vary widely, from a few dollars to thousands, and the high purchases skew the model.
Order IDProduct NamePrice ($)

1

Novelty keychain

3.25

2

Designer handbag

2415.00

3

Smartphone charger

15.99

4

Wireless earbuds

129.99

5

Smart watch

299.00

6

Laptop sleeve

24.50

  • Solution: scale all purchase amounts to a common range.
Order IDProduct NameNormalized Price

1

Novelty keychain

0.0000

2

Designer handbag

1.0000

3

Smartphone charger

0.0053

4

Wireless earbuds

0.0525

5

Smart watch

0.1226

6

Laptop sleeve

0.0088

  • Implementation: used min-max scaling to normalize purchase amounts.

Standardizing text formats

  • Industry: marketing
  • Scenario: a marketing agency is training an AI system on customer feedback.
  • Issue: inconsistent spelling or formatting of product features (e.g., "face-id", "FaceID", "face id") can result in the AI missing important trends or issues related to specific features.
  • Solution: apply consistent text formatting rules, spelling, and capitalization across all feedback.
  • Implementation: use text processing tools to standardize capitalization and punctuation.

Unifying terminology

  • Industry: healthcare
  • Scenario: a hospital is preparing patient records for AI analysis to improve treatment plans.
  • Issue: different departments use different terms for the same medical conditions.
  • Solution: standardize medical terminology across all records.
  • Implementation: create a unified terminology database and update records accordingly.

Handling categorical data

  • Industry: human resources
  • Scenario: a company is fine-tuning an LLM on employee performance data.
  • Issue: job titles are recorded inconsistently (e.g., "Software Engineer," "SWE," "Dev").
  • Solution: normalize job titles to a standard set of categories.
  • Implementation: map out all variations to a single standard title.

Normalizing dates

  • Industry: finance
  • Scenario: a financial institution is preparing transaction histories for ingestion into a RAG.
  • Issue: dates are recorded in a variety of formats (e.g., "MM/DD/YYYY," "DD-MM-YYYY").
  • Solution: convert all dates to a single standard format (e.g., "YYYY-MM-DD").
  • Implementation: use a date normalization tool to reformat all dates.

Addressing missing values

  • Industry: education
  • Scenario: a university is training an AI on anonymized student performance data.
  • Issue: some records have missing grades or lack attendance information.
  • Solution: normalize missing values by imputing them or omitting the associated records.
  • Implementation: use statistical methods to fill in or flag missing data, or delete the records.

Transforming logarithmic data

  • Industry: environmental science
  • Scenario: a research team is training an AI with data about pollutant concentrations.
  • Issue: concentration levels vary exponentially.
  • Solution: apply a logarithmic transformation to normalize data.
  • Implementation: use log normalization to scale pollutant concentration levels.

Normalizing geographical data

  • Industry: real estate
  • Scenario: a real estate company is training an internal AI on property values.
  • Issue: property addresses are recorded in many different formats.
  • Solution: standardize address formats and geocode locations.
  • Implementation: use an address normalization and geocoding tool.

Equalizing survey responses

  • Industry: market research
  • Scenario: a market research firm is inputting survey data into an AI.
  • Issue: survey responses use different scales (e.g., 1-5, 1-10).
  • Solution: normalize all responses to a common scale.
  • Implementation: rescale all survey responses to a unified range.

Normalizing units of measurement

  • Industry: manufacturing
  • Scenario: a manufacturing company is preparing production data for an internal AI monitoring system.
  • Issue: measurements are recorded in different units (e.g., inches, centimeters).
  • Solution: convert all measurements to a single unit.
  • Implementation: use unit conversion tools to standardize all data measurements.

Need help with data normalization?

Need help with data normalization? Book a free consultation and let us show you how we can tackle your data preprocessing and document preparation challenges. Check out our services for a full rundown of what we offer.

Work with Talbot West

Data normalization FAQ

Here’s an example of using min-max scaling and other methods to normalize data with a wide variance.

Original data:

Order IDProduct namePrice ($)Order date

1

Widget A

2500.00

01/15/202

2

Gadget B

35.99

03/01/2023

3

Widget A

2400.50

2023-04-20

4

Tool C

150.75

05-10-202

Normalized data:

Order IDProduct namePriceOrder date

1

Widget A

1.00

2023-01-15

2

Gadget B

0.00

2023-03-01

3

Widget A

0.96

2023-04-20

4

Tool C

0.05

2023-05-10

Here are the normalization techniques we used to solve this:

Scaling numerical data:

  1. Price: prices are scaled to a range between 0 and 1.
  • Max price: $2500.00
  • Min price: $35.99
  • Normalized price = (price - min price) / (max price - min price)
  • Widget A: (2500.00 - 35.99) / (2500.00 - 35.99) = 1.00
  • Gadget B: (35.99 - 35.99) / (2500.00 - 35.99) = 0.00
  • Widget A (2400.50): (2400.50 - 35.99) / (2500.00 - 35.99) = 0.96
  • Tool C: (150.75 - 35.99) / (2500.00 - 35.99) = 0.05

Normalizing dates:

  1. Order date: all dates get formatted consistently as "YYYY-MM-DD."
  • 01/15/2023 becomes 2023-01-15.
  • 03/01/2023 becomes 2023-03-01.
  • 2023-04-20 remains unchanged.
  • 05-10-2023 becomes 2023-05-10.

When preparing your data for AI uptake, normalization is a crucial step in the preprocessing stage. Anyone training an AI on their knowledge base or otherwise developing AI models should normalize data in the preparatory stages.

  • Machine learning algorithms: algorithms that rely on distance measurements, such as K-nearest neighbors, support vector machines, and clustering algorithms, need normalized data for accuracy. This ensures no single feature dominates due to its scale.
  • Gradient descent optimization: for neural networks that use gradient descent for optimization, normalization helps achieve faster convergence. It balances the gradients across features, leading to more efficient training.
  • Comparative analysis: when features have different units or scales, normalization makes them comparable. This allows for more accurate analyses and insights.
  • Improving model performance: normalization can enhance the performance and stability of machine learning models, reducing the risk of numerical instability.
  • Equal contribution of features: normalization ensures that each feature contributes equally to the analysis, which is crucial in multivariate analysis.
  • Dealing with outliers: normalizing data can mitigate the impact of outliers on model performance, making the model more robust.

Not Only Structured Query Language (NoSQL) databases are designed to handle large volumes of unstructured or semi-structured data, offering flexibility, scalability, and high performance.

Unlike traditional relational databases, NoSQL databases do not rely on a fixed schema and can store data in varied formats such as documents, key-value pairs, wide-column stores, and graph structures. Because of this flexibility, NoSQL databases are not typically normalized. Instead of adhering to normalization rules to minimize redundancy, NoSQL databases use denormalization to optimize read and write performance.

Neither SQL nor NoSQL is universally faster; the performance depends on the specific requirements and characteristics of the application.

SQL databases excel in structured data environments with complex queries, while NoSQL databases offer superior performance and scalability for large, unstructured datasets and high-throughput scenarios.

The best normalization form depends on your specific needs:

  • 1NF: ensures data is stored in atomic units.
  • 2NF: removes partial dependencies, best for composite keys.
  • 3NF: eliminates transitive dependencies, suitable for most general use cases.
  • BCNF: a stricter version of 3NF, ensuring more rigorous constraints.
  • 4NF and 5NF: used for handling very complex data relationships and ensuring minimal redundancy.

For most practical purposes, achieving 3NF is sufficient and balances data integrity with efficiency. For highly complex systems, BCNF or higher normal forms might be necessary. In performance-critical applications, strategic denormalization might be employed to optimize read operations.

After data normalization, we may need to apply other methodologies to your knowledge base.

These include, but are not limited to, the following:

Once the entire data preprocessing task is completed, your knowledge base is ready for AI ingestion.

Resources

  1. Wang, T. J., Du, H., & Lehmann, C. M. (2010). Accounting for the benefits of database normalization. American Journal of Business Education, 3(1), 41-50. Retrieved from https://files.eric.ed.gov/fulltext/EJ1060329.pdf
  2. Eessaar, E. (2016). The database normalization theory and the theory of normalized systems: Finding a common ground. Baltic Journal of Modern Computing, 4(1), 5-33. Retrieved from https://www.proquest.com/docview/1785391026
  3. Mingers, J., & Meyer, M. (2017). Normalizing Google Scholar data for use in research evaluation. Scientometrics, 113(3), 1203-1225. https://doi.org/10.1007/s11192-017-2415-x
  4. Izonin, I., Tkachenko, R., Shakhovska, N., Ilchyshyn, B., & Singh, K. K. (2022). A two-step data normalization approach for improving classification accuracy in the medical diagnosis domain. Mathematics, 10(11), 1942. https://doi.org/10.3390/math10111942
  5. Muhammad Ali, P.J. (2022). Investigating the impact of min-max data normalization on the regression performance of K-nearest neighbors with different similarity measurements. ARO-The Scientific Journal of Koya University, 10(1), 85-91. Retrieved from http://dx.doi.org/10.14500/aro.10955

About the author

Jacob Andra is the founder of Talbot West and a co-founder of The Institute for Cognitive Hive AI, a not-for-profit organization dedicated to promoting Cognitive Hive AI (CHAI) as a superior architecture to monolithic AI models. Jacob serves on the board of 47G, a Utah-based public-private aerospace and defense consortium. He spends his time pushing the limits of what AI can accomplish, especially in high-stakes use cases. Jacob also writes and publishes extensively on the intersection of AI, enterprise, economics, and policy, covering topics such as explainability, responsible AI, gray zone warfare, and more.
Jacob Andra

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