Why Predictive Analysis Tools are Important for your Business
BY: NEISHA SANTIAGO
Predictive Analysis is the use of data, statistical algorithms, and machine learning procedures to identify the likelihood of anticipated results based on historical data. The purpose is to provide the best assessment of what will occur in the future. For organizations, predictive analysis is valuable because this technology gives significant potential to their business performance. Nowadays, more and more organizations are using predictive analytics to increase their productivity and competitive advantage. With this interactive and user-friendly software, predictive analytics is no longer just the domain of mathematicians and statisticians. Business analysts are employing these technologies, as well.
Why is Predictive Analysis So Important for Your Organization?
Organizations are using predictive analytics to help solve challenging problems and uncover new opportunities. Most common uses include:
- Fraud Detection
Combining multiple analytics processes can improve specific pattern detection preventing criminal behaviors.
- Optimizing Business Campaigns
Predictive analytics determine all customer responses or purchases, promoting sell opportunities. Predictive designs help businesses retain, attract, and grow their most valuable customers.
- Improving Business Processes
Companies use predictive models to manage resources and forecast inventory. For example, Airlines use predictive analysis to set ticket prices. As well, Hotels predict the number of guests to maximize occupancy and boost revenue. Predictive analytics allows organizations to operate more efficiently.
- Reducing Potential Risks
Analytics aids an organization in deciding on adequate actions to prevent or minimize the losses incurred. Predictive analysis is changing risk management as it encourages organizations by notifying what they can expect in the future.
How It works?
Predictive models use actual results to develop a model to predict values for different or new data. Modeling stores results in the form of predictions that represent a likelihood of the target variable of the company based on estimated significance from a set of input variables. With predictive analytics, you can go beyond discovering what happened and why to learning insights about the future. Any industry or can use predictive analytics to increase revenue, reduce risks, and optimize operations.
Predictive Analysis has the potential to improve what businesses do and how they do it. Yet many companies are equipped with the best technology, but most need the organizational capability to take full advantage of predictive analysis. Also, many organizational processes are not built to make use of analytics and make it a competitive advantage. High-performing businesses leverage the power of analytics by channeling their efforts in four areas: focus, adopt, adapt, and activate. Predictive Analysis embraced a new paradigm that promotes agility, fast execution, and lasting organizational change in your company.