Predictive analytics is revolutionizing the global business landscape, giving unprecedented capabilities to decision makers. It provides them with a decisive advantage while striving to achieve a varied range of business outcomes, such as; higher customer satisfaction, productive websites and efficient operations. It is now widely being used by marketing, sales and finance teams to achieve maximized business performance.
Predictive analytics is where methods and technologies are used to spot trends and patterns in the data collected from various resources, enabling the creation of predictions, so that businesses can respond to them in advance and identify new opportunities in a timely fashion. Predictive analytics makes use of both structured and unstructured data.
It is true that predictive analytics has been in the background for several years. However, now this technology has become mainstream and has turned decisive, enabling companies to predict trends and achieve heightened business performance.
Predictive analytics has thus, become a technology that augments both data discovery and business intelligence, and it definitely goes beyond all the nuances of online analytic data processing. Pecan makes Predictive Analytics accessible and common after years of having been reserved to high-end companies.
To fully understand the power of predictive analytics, let’s compare it with business intelligence and analytics, which dominated the business arena for the last 20 years.
Many companies often confuse business analytics with predictive analytics or think that once they’re using business analytics for data analysis, then they’re doing all they can to get data insights from it. They are wrong. They are not exploiting the full potential of the data they have.
Your Business Analytics tools provide a summary of your existing/historical states. It can tell you which of your products is currently selling best and show you historical trends in your product sales over time up to a particular point. However, what if you want to know how well a particular product is going to sell in the future?
Perhaps you’re planning an advertising campaign. What effect will this campaign have on future product sales? Which of your customers are most likely to respond to the campaign? This is what predictive analytics can tell you.
Predictive Analytics is a hot topic in today’s business world as well as governmental and non-governmental organizations. Predictive Analytics goes beyond these backward-facing views and uses the data you already have on hand to look forward and help you to predict the future. Not only that, but Predictive modeling allows you to predict the future probability. Moreover, advanced predictive analytics tools will use deep learning neural networks, so that your business decision making becomes truly data-driven and based on accurate and reliable likelihood predictions, rather than based on subjective hunches and biased judgments.
Predictive analytics uses various statistical models when analyzing the data. The most common use cases are focused on predicting individual customer behavior. The model is trained using variables that describe the customer and its historical behavior and following training, can analyze newly-arriving data and predict the new customer’s behavior. This process can thus be used to predict how the customer might behave next, under various scenarios and situations.
Conclusion – Business Analytics vs Predictive Analytics
Predictive Analytics takes Business Analytics to the next level, moving from a retrospective set of answers based on historical data to a set of future-looking answers focused on predicted business outcomes. More so, Predictive Analytics can provide insights into which business variables are most relevant for predicting the expected outcomes, and how those variables can influence the expected outcomes had they been changed. This is exactly what positions decision makers in the best vantage point to make judgment calls and prescribe the next best actions.
In any case, you still need business analytics in order to understand what happened in your business and visualize your historical business data to make sense of it. Predictive Analytics, however, takes you one step further to make forward-looking decisions based on analysis of best-case outcomes, and their likely impact.