What is the power of Predictive Analytics?
Predictive analytics has been called the next big thing. Appreciating the technology and what it can do for decision makers will help businesses determine how to take advantage of its remarkable capabilities.
Predictive analytics extracts information from large data files, or Big Data, to uncover patterns in the data and forecast outcomes. Built-in predictive models enable computers and data scientists to understand and predict the behavior of individuals and products to make informed decisions.
In business, predictive analytics is used to look at past and current data to identify opportunities, analyze risks and understand customers. Marketers use this to optimize campaigns and determine next steps. Credit scoring is perhaps the best-known predictive analytics application.
The answers generated by predictive analytics affect all of us. Increasingly vital applications include clinical decision support in healthcare and fraud detection in banking, credit and insurance. Customer relationship management (CRM), government, law enforcement and manufacturing all benefit from this technology.
The practical applications for predictive analytics tools are endless, and to some degree, remarkable. For example, a major wealth management company might use it to deduce that you are about to relocate and that your daughter is getting married, and then offer you investment advice on how to adjust your portfolio based on those future events before you ask.
According to Eric Siegel, a former Columbia University professor and founder of predictive Analytics World, the practice of predictive analytics has “The Power to Predict Who Will Click, Buy, Lie or Die.”
Putting Predictive Analytics to Work
For a business focused on day-to-day operations, the opportunity to analyze existing data to develop more of a strategy may seem very attractive. However, capitalizing on the power of predictive analytics may require some assistance.
With a wide variety of providers and offerings promising to harness Big Data to light the path ahead for your business, the need for experienced guidance is evident. For example, companies working to incorporate predictive analytics into business decision making must first clean up and assemble the data being collected so it can be mined accurately and consistently to generate useful answers.
Unconnected applications may be creating islands of information that don’t always agree. Creating a data warehouse to gather and prepare the data might be required to develop an effective predictive analytics capability.
Building a Data Warehouse
Data warehouses are constructed to answer tough business questions like:
- Why don’t we understand the customers we have?
- Why are we not converting more quotes to sales?
- Which prospects are most likely to buy this quarter?
The addition of business intelligence logic such as predictive analytics makes the data warehouse extremely useful to decision makers. Putting together a good data model is the most difficult piece of building a data warehouse, and it cannot be automated.
Professional consultants have the real-world experience to create a practical, successful data model. Off-the-shelf products can’t integrate everything from all of your data sources so it’s wise to choose a consultant you can trust with an excellent track record to guide the process.
For a closer look at the data warehouse rationale, download the informative white paper,
Who Needs a Data Warehouse and Why
eMazzanti can Help
Big Data and increasingly powerful business intelligence tools are transforming business processes. Expert assistance is available to guide development and implementation of the technology in your organization.
To learn more about how to apply data warehouse and business intelligence technologies to make better decisions and grow your business contact us at [email protected] or call 1-866-EMAZZANTI.