Predictive analytics is not exactly a new technology. These solutions have been around in one form or another for years. However, as several industry experts recently highlighted, advances in predictive analytics capabilities have made these solutions far more applicable, and valuable, for organizations in many sectors.
Speaking to SiliconANGLE's theCUBE, James Taylor, CEO and principal consultant for Decision Management Solutions, explained that analytics is now widely accepted by the broad business community. This marks a significant change from just a few years ago, when there was a high degree of skepticism. These technologies have proven their utility. In particular, he emphasized that predictive analytics are now moving to the forefront for companies as these organizations respond to an increasingly demanding consumer base.
To highlight this shift, Taylor pointed to his own son's experiences purchasing auto insurance.
"When he gives you his data, he expects a quote. If you say you'll let him know what the quote is, he'll just go somewhere else. He wants the answer now," said Taylor, SiliconANGLE reported. "You have to use analytics to determine how risky he is and you have to answer now."
Consumer-facing businesses that fail to embrace predictive analytics will be unable to perform such on-the-spot calculations and will therefore miss out on many opportunities.
This trend was further emphasized by ITWeb Africa. The news source noted that the combination of several recent technological advances, including the rise of cloud computing, mobility and big data, have made it possible for firms to harness analytics to deliver real-time predictive insight.
"The resulting insight allows businesses to uncover hidden customer, employee, vendor and partner trends, anticipate buying behavior and then take proactive action, and the implications are huge," Merlin Knott, director of business analytics for SAP Africa, told the news source. "Effectively leveraged predictive analytics allows businesses to significantly increase understanding of their customers' behavior, improve response to clients, and deliver tangible business value which will ultimately drive up profitability."
Critically, ITWeb Africa pointed out that predictive analytics has evolved to the point that it can be easily utilized by every employee throughout a company, whereas these tools were previously limited to highly trained data analysts and statisticians. This greatly expands the opportunities for companies to gain value from such solutions.
Like Taylor, Knott highlighted the customer-facing applications of this technology.
"Why just meet customer demands when you can actually anticipate them?" he said, according to the news source. "With the right technology tools, you can now identify new opportunities and provide targeted products and services to your customers to boost their efficiency and client retention."
Making predictive analytics work
However, for all of the potential benefits offered by predictive analytics, it is essential for business decision-makers to follow best practices to see these results.
For example, Taylor emphasized the need to incorporate a variety of data streams, including unstructured data, into the predictive analytics solution. He also argued that businesses must have a sense of how they might alter their operations in light of predictive results.
"Talk to anyone who does predictive analytics and they'll tell you stories of building highly predictive models that didn't change the business," Taylor explained, SiliconANGLE reported. "You have to be clear how it's going to affect the decision you're going to make before you can build the predictive."
Furthermore, it is imperative that organizations take the time to choose predictive analytics tools and other resources that are the ideal match for their unique goals and needs.
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