Why Predictive Analytics Matter For A Business?
Predictive
analytics, a branch of advanced analytics, predict future outcomes and trends.
It encompasses the use of statistical algorithms, machine learning, data
mining, and predictive analytics for extracting information to determine and
provide the best assessment of how the market will unfold in the future.
There are
no tools available in the market which can anticipate the future 100%, but a
business can estimate its risk and take action to deal with it. Predictive
analytics is useful in various business activities like foretelling consumer
behavior and purchasing pattern, inputs demand from the supply chain,
inventory and operations.
There are
various predictive analytics software available in the market, some of them
are:
·
IBM’s
SPSS Statistics
·
SAS’s
Advanced Analytics
·
RStudio
·
RapidMiner
FEW EXAMPLE OF HOW INDUSTRIES ARE USING
PREDICTIVE ANALYSIS TO OPTIMISE OPERATION, INCREASE REVENUE AND REDUCE RISKS.
1.
Banking
and Financial services sector use predictive analytics for detecting fraudulent
activities, measuring credit risk, increase business opportunities and retain
old clients.
2.
Retail
sector utilizes predictive analytics for optimizing prices and merchandise
planning, ascertaining which offers and promotional events are effective in
garnering consumers.
3.
Energy
industry embraces it for forecasting the future equipment and resources,
reducing reliability and safety risk, and for enhancing the overall
performance.
4.
Like
many other sectors, the Government uses it for predicting consumer behavior
and to strengthen the cybersecurity.
5.
The health insurance industry uses predictive analytics to know which patients are
more vulnerable to chronic disease and are not adhering to the prescribed
treatments.
6.
In the manufacturing sector, predictive analytics serves in recognizing the factors
affecting the quality leading to a production failure, and ways to improve the
service resource and distribution.
IMPORTANCE OF PREDICTIVE ANALYTICS FOR A
BUSINESS
v It is highly effective in dealing with the
growing cybersecurity threats. As a high-performance, multiple analytics tools
analyze all the action of clients to spot the abnormalities in real-time and
prevent it in the future.
v Predictive analytics help to retain and
attract, increase the consumers of a business. It is used for ascertaining the
consumer's purchase or response and for promoting cross-sell opportunities.
v It increases the efficiency of daily
business operation by forecasting the inventory and manages resources or predicts
the demand in a particular season.
v Predictive analytics is incredibly valuable
for anticipating any unfortunate contingency and how it will impact the
business.
v It also benefits in forecasting ways for
how to promote the goods and services to the customers and which tactics will
best suit for marketing in a particular region or location.
v To envision how an investment in one area
will impact the overall business performance.
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