Investment in Business Intelligence (BI) ventures continues to be a main focus for companies, and developing fields like predictive analytics are growing rapidly. Businesses are looking to utilize their ever-expanding data resources, in order to deduce market trends more competently, enhance product superiority, and gain ground on the competition.
Traditional BI solutions use ad hoc query, reporting tools and dashboards to look at current and past company information. Historically, BI only answered questions related to what has already happened, or why this particular event might have occurred. On the other hand, predictive analytics examines large quantities of current and former information, and then builds a model to project what could happen in the future, based on past trends. Even in a cash-strapped economy, with meager IT budgets, companies are spending a portion of their profits on Business Intelligence, and predictive analytics.
The future of BI lies in predictive analytics
Predictive analytics tools are not new concepts, and have been around for many years from conventional sellers, such as SPSS and SAS Institute, and subsequently, other vendors broke into the predictive analytics market. However, widespread adoption of this business tactic was delayed, largely due to the level of specialization and the complex nature of available tools.
As a result, finance experts and statisticians have now welcomed predictive analytics tools. These professionals use them as a way to assess possible credit risks, and recognize fraudulent actions. In the retail sector, predictive analysis tools are used to predict opportunities to cross-sell and up-sell within the current customer base. Additionally, telecommunications businesses use these tools to predict customer activity, like payment rates.
Today, sectors typically not associated with predictive analytics, such as manufacturing, are beginning to see the potential of progressive analytical resources. Industry experts are now recommending that businesses invest in predictive analytics tools. If the business has a repeatable process, and produces large quantities of data, then a minor improvement in the implementation of the process could potentially save money, or create added revenue.
For instance, manufacturers could use this technology to determine the mean time between failure (MTBF) rates for any number of processes, helping them to optimize quality efforts. In addition, manufacturers can use these tools to forecast supply chain holdups and aid in managing materials.
BI dealers boost abilities in advanced analytics
BI vendors are responding to increased customer demand, by offering predictive analytic tools paired with other progressive analytic resources. Certain companies, like SAP, have joined with established industry leaders, while others, such as IBM, have made crucial acquisitions (IBM acquired SPSS in July 2009).
Companies who have adopted BI solutions are still developing their applications and expanding their deployment, and some have more work to do before their BI technology is fully integrated. However, BI tools have been made more accessible and are now better suited to everyday business users.
Once predictive analytics grows past its primary audience, then there will be additional challenges, like preparing staff. Whoever is responsible for advanced analytics for a company now needs to have a thorough understanding of the processes and data involved, as well as an experimental mindset. The majority of businesses will not be required to hire professional statisticians. Instead, they can use specially trained business analysts, or BI experts.
These dedicated teams will spend the majority of their time preparing and cleaning data. Data analytics, scoring models, regression models, and data mining logic all need to be moved to the enterprise data warehouse. This way they can be accessed throughout the entire organization.
Should you want more information on how BI and predictive analytics can help you achieve better business outcomes, please contact us today for more details.