How Are Predictive Analytics Solutions Helping Businesses Stay Sharp?

1-Sep-2022 by
How Are Predictive Analytics Solutions Helping Businesses Stay Sharp?

As modern enterprises aim to take more data-driven decisions, predictive analytics is expanding possibilities rapidly. With Predictive Analysis, instead of simply responding to events that are occurring or have already occurred, enterprises can look into the future and make well-informed data-driven decisions. Predictive analytics helps businesses examine areas for improvement, strategies to lower risk, and ways to stop fraudulent conduct by studying historical and current data, along with industry patterns. 

Every enterprise has access to a wealth of data, including manufacturing, logistics, customer and operational data. Understanding how to apply it to enhance the growth of the business is the key. According to a study, It is anticipated that by 2028, the market for predictive analytics tools will have grown to $41.52 billion [1] from an estimated value of $5.29 billion in 2020. Utilizing predictive analytics is a cannot-miss strategy that enterprises need to adopt to grow, or even survive. 

Predictive Analysis in plain terms is the process of collecting historical data to create models and analyses, which help project future results. Learning from past failures and triumphs can help us determine what needs to be changed or what should be repeated. All facets of an enterprise can benefit from using predictive analytics. It can reveal what clients want and don’t want and aid an enterprise in operating at its full potential.

What is Predictive Analytics, and how does it work?

process-of-data-analytics

Predictive analytics combines statistical algorithms, data mining, machine learning, and predictive modelling to analyze behavioural and historical data and forecast future results. Thanks to advanced predictive analytics tools, enterprises can now effectively leverage big data to uncover threats and opportunities.

But any enterprise must establish a business goal, such as boosting sales, streamlining processes, or boosting consumer engagement, before it can deploy predictive analytics tools. The enterprise can then sort through enormous amounts of heterogeneous data, create predictive analytics models, and produce valuable insights to help achieve the desired outcome.

A predictive model is based on a mathematical representation of potential possibilities gleaned from data. 

It replicates a real-world situation or idea and scales it down so that only the aspects you are interested in are included, much like a scale or architectural model. The following are the essential steps in any predictive modelling procedure:

  • Choose the prediction you want to make: Select an outcome you’d like your predictive analytics software to keep an eye on, whether it’s customer retention or future trends. 
  • Data Collection: Your predictive modelling will be more accurate the more data mining you can perform, as it is with any data analysis system. 
  • Training & Testing: Test your model and then utilize the results to improve its accuracy as you advance. Applications of predictive analytics should be able to improve themselves over time if they make use of artificial intelligence (AI) and machine learning (ML).

A glimpse into Intelligent Data Analytics

Artificial intelligence, high-performance computing, pattern recognition, and statistics are just a few of the disciplines used in the interdisciplinary field of intelligent data analytics (IDA), which is concerned with extracting knowledge from data. The data preparation stage, the data mining stage, and the outcome validation and explanation stage are the main stages of this intelligent data analytics method.

Challenges for Predictive Analytics implementation and possible solutions

Expertise

Being an expert is difficult because predictive analytics solutions are often created by data scientists with extensive knowledge of statistical modeling, R, and Python. This is naturally restricting. In reality, the majority of application teams are unable even to begin to tackle predictive analytics without first recruiting a specialist data scientist.

Solution: However, you don’t have to accept a limited approach. In recent years, we have seen the emergence of new user-friendly predictive analytics tools for everyone to benefit from practical use.   

Adoption

The more challenging a new technology is to use, the less likely end-users would accept it; predictive analytics solutions are famously challenging in this regard. This is because most of them exist as independent products, requiring users to transfer from their main business app to the predictive analytics solution to use them. Moreover, updating old predictive technologies is tedious because they are challenging to scale and implement. 

Solution: The most effective use of predictive analytics is within programs with which users are already familiar. Your application will have a significant strategic advantage over the competition if machine learning and AI are integrated into it.  

Enhancing End-User Performance

Without context, no information is helpful. And that’s one of the reasons predictive analytics has fallen short in empowering end users. Predictive analytics systems have the drawback of providing information and insights but stopping short of enabling users to act. As we just established, users need to go to yet another program to take action on the data, which wastes time and disrupts their productivity. 

Solution: You can guide your users to take instant action or start another process by integrating intelligent workflows into your standard business apps. This will help them save a lot of time and hassle

Overwhelming Project Lists

Every predictive analytics project has a long list of steps, which are nearly always managed by a professional data scientist. The problem is that your application team has to perform these processes more frequently with each upgrade and release. These steps broadly comprise: 

#1 Processing of data

#2 Data cleaning

#3 Recognizing crucial columns

#4 Identifying patterns

#5 Knowing how various algorithms operate

#6 Algorithm selection for the appropriate task

#7 Choosing the algorithm’s appropriate attributes

#8 Ensuring the data is formatted correctly

#9 Evaluating the results of the algorithm performed

#10 The algorithm is retrained using fresh data

#11 Managing data imbalances

#12 Model deployment/redeployment

#13 Batch or real-time prediction

#14 Integrating with your main app to incorporate data insights into the program and begin user engagement

Solution: Instead of putting the entire load on your staff, specific predictive analytics systems handle several of these stages. You can reduce a 14-step to 2-3 steps by using one of these more efficient predictive analytics solutions.

How are different sectors utilizing predictive analytics in real time?

Enterprises use predictive analytics solutions from predictive analytics consulting in an almost infinite variety of applications. Here are a few instances of how enterprises are utilizing predictive analytics:

  • Automotive: Plans for producing new vehicles should consider data on product reliability and performance. Driver behaviour needs to be studied to improve driver assistance systems and ultimately lead to driverless vehicular experiences. 
  • Energy: Forecasting ratios for long-term prices and demand. Establish the effect on service costs of weather-related occurrences, equipment failure, governmental restrictions, and other factors. 
  • Financial services: Create models for credit risk. Identify patterns in the financial markets. Analyze the effects of new regulations, legislation, and policies on markets and enterprises.  
  • Manufacturing: Determine the location and frequency of machine breakdowns. Depending on anticipated future demand, optimize raw material delivery. 
  • Retail: Follow online consumer behaviour in real-time to see if offering more product details or incentives will boost the likelihood that a sale will be completed.

How to incorporate Predictive Analytics into your business processes?

Considering integrating predictive analytics into your enterprise’s operations? There are a few steps you must first accomplish.

  • Establish a goal: Setting a business goal is the first step in every predictive analytics project. What is it that you’re attempting to forecast, and what will you do with the knowledge you obtain? 
  • Gather data: Once you have a defined aim or purpose, the following step is to collect data from various internal and external sources, including web archives, databases, and spreadsheets. Before analysis, make sure all data has been cleaned.
  • Analyze the data: You are now prepared to run your dataset via many predictive analytics algorithms. For instance, outlier analysis for fraud detection is a technique that is chosen based on the intended application. 
  • Develop models: Analytical models are made simple by predictive analytics software solutions. Yet, it is helpful to have the assistance of a data analyst and an IT specialist for model development and deployment. Successful proof-of-concept initiatives may produce highly encouraging early findings that could impact business decisions.
  • Process to Product: Without acceptance from users and stakeholders, even the best models won’t be helpful. Expensive prototypes are incorporated into decision procedures to assess performance, return on investment and reliability. When choosing which models to keep enhancing and advancing toward complete automation, the results of the trial phase will be essential.

Wrapping Up

Predictive analytics is regarded as one of the fundamental building blocks of initiatives to enable digital transformation across industries and in global operations. This technology can allow enterprises to tap into their data collection for commercial gain when used appropriately. 

It is crucial to investigate the challenges and possible solutions of integrating predictive analytics into organizations’ critical business applications to help business leaders, administrators, managers, and policymakers make informed decisions. Enterprises willing to take their business to the next level can get in touch with our Data Analytics experts to avail of predictive analytics solutions that can transform operations through the power of data.

Citations

1. Statista