Data analytics helps us to understand the past, while predictive analytics is essential for a company to improve its performance and achieve success both at present and in the future.
What is Data Analytics?
Data analytics is a valuable tool for business. Organizations can collect and analyze historical data, thereafter convert it into relevant information and extract useful insight to make informed business decisions and thereby make a significant impact on performance. However, data analytics does have limitations when it comes to forecasting ? that is where predictive analytics takes over.
What is Predictive analytics?
Predictive analytics is a part of advanced analytics for predicting or forecasting unknown future events. Predictive analytics makes use of various techniques for data mining, machine learning, modelling, statistics, and artificial intelligence for analyzing current data and making predictions about the future.
Predictive analytics helps businesses to become foresighted, anticipate outcomes and behaviours based upon fact-based data and not instincts or assumptions. Prescriptive analytics based on predictive analytics goes a step further and suggests the best course of action to benefit from the predictions made. If predictive analytics is successfully implemented, businesses can effectively interpret and analyze big data for their benefit.
How predictive analytics can improve performance?
Predictive analytics can improve the performance of a business by:
Increasing productivity ?
Data that we can readily use for analysis, allows beneficiaries or businesses to become more proactive and do future predictions based on historical data and not on instincts or traditional presumptions.
Cost optimization ?
Cost optimization is that area which can see fast results and good return on investments from the implementation of predictive analytics. Drawing from past pricing information, competitors pricing data, current market trends, and other sources of fact-based data, predictive analytics can help businesses optimize their future pricing for maximizing profit. Predictive analytics helps businesses to have an insight into customer segmentation, purchasing power and situation, product information. By analyzing this data, businesses will get understand about trends and patterns to make informed decisions and optimize pricing for maximizing profit.
Efficient use of resources ?
With the precision of the desired outcome, predictive analytics helps to save on misallocated resources and thereby save on both cost and time.
Faster results ?
Predictive analytics helps to understand future trends and predictions based on customer acquisition models and new developments, this will help to generate results faster and accurate.
Improved operations in terms of quality and functionality ?
Industries likes hotels, airlines offer variable daily pricing, they use predictive analytics in their decision-making process, thus helps in more efficient functioning.
Helps in detecting fraud ?
With the increased cases of criminal activities and cyber threats and attacks, predictive analytics helps in detecting such frauds and eventually prevent such vulnerabilities from happening again.
Helps in risk management ?
With the help of predictive analytics in real-time business, we can respond to uncertainties and challenges even before they appear in reality.
Helps in optimizing marketing campaigns ?
Predictive analytics helps to understand customer behaviour and about their needs and preferences, and helps in retaining profitable and potential users and attract new users from the market place.
Budget setting ?
In this digital era, businesses have more platforms, channels and strategies to reach and connect with their audience. Here there is a challenge for businesses to ensure that they are getting the best return on the investments made in their advertisement and marketing. Predictive analytics uses fact-based data to forecast and refine marketing strategies to ensure the best results and helps in efficient budget allocation.