Predictive analytics – what is the benefit for business?
An organization's ability to anticipate the future and optimize its business processes are key capabilities in the midst of major changes.
What is predictive analytics?
Predictive analytics refers to methods in which, with the help of the data in the organization's possession and various methods, either future events can be predicted or information can be obtained about what could have happened based on past data if the distribution of certain background variables had been a certain way.
Predictive analytics can be used very widely in different industries or for an individual organization in relation to its different business processes.
In practice, predictive analytics is just one new tool in business development and management.
What does predictive analytics offer?
In the financial sector, areas of application include risk-based pricing, various compliance requirements to understand customer behavior and, on the other hand, risk management.
For financial processes, predictive analytics enables the automated and risk-based processing of purchase invoices and, for example, the automated production of various cash flow forecasts.
In the energy sector, pricing, risk management and proactive maintenance of assets are typical applications.
These are just a few examples of predictive analytics applications.
How is predictive analytics developed?
The development of predictive analytics is an entity that requires business expertise, information management and method expertise. Often the necessary data sources are fragmented, their integration and harmonization into modelable data can take time.
Organizations may lack resources, especially in terms of information management and integrations, so getting started with a competent partner is easier than trying to do everything alone.
Business expertise is needed when defining what is to be developed, the prediction of the usefulness of the end result of a predictive analytics project is bad if this business starting point is not taken into account. Modern cloud services make a lot of things possible, but every investment should still produce benefits.