In today’s hyper-competitive market, it has become a challenge for numerous organizations to tackle the humongous amount of data and to study sales trends, customer behavior, and other factors to get hold of the market to operate in a convenient way to generate more revenue. And, to achieve such goals, enterprises rely on various tools and techniques to obtain accurate data. This is where Predictive analytics comes into the picture. It is basically a tool that utilizes different techniques to predict future events and identify the opportunities and risks for organizations.
According to Gartner, Predictive Analytics is a form of advanced analytics which examines data or content to answer the question “What is going to happen?” or more precisely, “What is likely to happen?”, and is characterized by techniques such as regression analysis, forecasting, multivariate statistics, pattern matching, predictive modeling, and forecasting.
For instance, it not only gives the evaluation from the past data, but you can use it to learn from past experiences, recognizing the trends and patterns to project future possibilities. It takes the level of decision making ahead by providing better predictions that are designed to suggest actions.
Challenges and Solutions
Low expertise- This is one of the biggest challenges when it comes to predictive analytics solutions. It is usually designed for the data scientists with an in-depth understanding of statistical modeling like — R, Python. This limits the teams who lack knowledge of predictive analytics.
So, you no longer need to settle for a limiting solution. In the present scenario, predictive analytics solutions are emerging, and they’re designed in a way that everyone can use it. Most importantly, organizations don’t require expertise in statistical modeling anymore.
Adoption- It is tough for the users to adopt the new technology- and predictive analytics is very difficult to meet the adoption challenge. The reason behind this is- Typically, enterprises use standalone tools, which means users must switch from their primary business application to the predictive solutions to use it. The traditional tools are very tough to deploy and scale, which makes it a hefty process.
So, predictive analytics is more real when it embedded inside the application. Embedded machine learning and AI in your application give you a humongous benefit over the competition. It also provides strategic advantages to businesses.
Benefits of Predictive Analytics
Fraud Detection: With the help of predictive analytics, you can track the changes in the behavior patterns within a network by detecting the anomalies, which may show signs of threat or fraud.
Production Efficiency: Using predictive analytics, industries like manufacturing and production can effectively forecast- required production rates and inventory. The past data can also be used to estimate potential failures. This helps to prevent the same errors and occurring.
Risk Reduction: Predictive analytics can be used to reduce the business risks by getting complete insights into things like- the success of new products, business ideas, the demand for something in the future to identify better opportunities.
Cost reduction: If you are encountering lower risk, then it’s evident that cost would be lower as well. By analyzing future trends, you will be entitled to take a better approach towards working on an optimal level and reduce costs.
Gain Advantage over competitors: Why predictive analytics? It provides you with insights into existing valuable information. It just needs digging up. Tapping into the customer data gives you insightful information, where you can quickly analyze why customers choose you over your competitors, highlighting unique selling points that you can promote to generate leads.
In a nutshell, predictive analytics is recommended for organizational benefits that are dependent on the analysis of the humongous amount of data. The organizations can move ahead with this technology to achieve their goals and generate more revenue on the insights provided by this technique.