Analytics at Work
- Target predicts customer pregnancy from shopping behavior, identifying prospects to contact with offers related to the needs of a newborn’s parents
- Tesco (UK) annually issues 100 million personalized coupons at grocery cash registers across 13 countries. Predictive analytics has tripled redemption
- Netflix predicts which movies you will like based on what you watched.
- Life insurance companies predict the likelihood of an elderly insurance policy holder’s death will die within 18 months
- Con Edison predicts energy distribution cable failures, updating risk levels that are displayed on operators’ screens every 20 minutes in New York
What is BI?
The challenge facing businesses in every industry is not trivial: To effectively derive insights from the deluge of data. How do you structure and execute analytics programs (Infrastructure + Applications + Business Insights) with limited budgets?
Every business recognizes that a better understanding of data (particularly as a predictor of the future or as an identifier of existing issues) can create new opportunities and make a significant difference to managing performance.
We all feel like we are drowning in data. Data obesity, Data Deluge, Data overload, Data Saturation — are real problems to be addressed with business intelligence, business analytics and predictive analytics.
The core business drivers are well understood…. better analytics to acquire, grow, retain customers; do “what-if” analysis, detect fraud and manage risk better?
How do we change status quo and take the next step? As seen in the figure, predictive analytics is the natural evolution of BI processes, tools and technologies to answer these questions. While BI focuses on historical analysis, analytics builds upon this set of technologies and techniques to re-focus on the future; helping predict future trends, opportunities and threats.
The new cycle is “Ingest, Model, Deliver insights”. Ingest continuously large volumes of data, model quickly using pre-built models, and deliver real-time recommendations or predictions.
Some of the well known and lesser known firms that are active in the Predictive Analytics Toolset space are listed below.