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WHAT IS PREDICTIVE ANALYSIS

Predictive Analytics: Definition, Concepts, Benefits and Popular Tools

By BhavikPublished 2 years ago 4 min read
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WHAT IS PREDICTIVE ANALYSIS

Predictive Analytics: Definition, Concepts, Benefits and Popular Tools

Predicting business progress is one of the oldest methods to plan a business strategy. Most successful businesses today are the result of strong predictions by their owner and business leaders. The efficiency in the process of developing prediction comes from experience and continuous learning. Now the technique has taken an advanced form in which business leaders use data analysts to make business predictions. It is known as Predictive Analytics. Therefore, Predictive Analytics is considered as a way to use the past events of a business to oversee the future of your business.

Meaning of Predictive Analytics

Predictive analytics is an important analytical method used by many organizations to assess, check the risk, progress and forecast future business possibilities based on data analytics. Today, it is considered as the advanced analytical technique that uses data, algorithms, Artificial Intelligence and Machine Learning to anticipate possibilities and make business projections. Data scientists use past data as their foundation and apply various regression models and machine learning techniques to perceive plans and trends in the data.

Concept of Predictive Analytics

The main goal of predictive analytics is to find out the possible happening in the future with a high degree of certainty to achieve business targets. The technique differentiates predictive analytics from descriptive analytics that facilitates analysts in analysing previously incidents and prescriptive analytics. It further helps in using optimization techniques to detect the best solutions to discourse the developments discovered by predictive analytics.

The concept of Predictive Analytics can be understood by the example that a Cosmetic Company uses Predictive Analytics to check the sale of beauty products in the festive season. Generally, the sales of beauty products get increase during the festive season. Predictive Analytics understands the previous order history and decides whether to increase the production of these products or change some design, strategy and quality. Other companies also use predictive models to identify whether a particular product has a good possibility of sale, reviews and feedback of customer, whether packing of previous products attracted the customers etc. Overall, using predictive analysis helps in the strategic vision for the future, mapping the opportunities and intimidations in the market.

These are some of the benefits Predictive Analytics

· Reduce the possibilities of Risk

· Forecast the next moves in the market

· Predict the future opportunities

· Optimize marketing strategies

· Measure the performance and practices of consumers

· Improve operations and increase efficiency

Predictive Analytics Techniques

Decision Trees- It is an analytical technique based on Machine Learning that uses data mining algorithms to oversee the potential risks and benefits of undertaking certain business options. The decision tree is prepared through a visual chart that resembles an upside-down tree on the dashboard. It shows the prospective upshot of a possible decision. When it is used for analytics, it can solve all forms of classification problems and answer difficult matters

Neural Networks- Neural networks are biologically encouraged data processing systems that use historical and current data to forecast future movements. The design of neural networks permits data analysts to recognize complex links hidden in data in a way that imitates the pattern perceiving systems of the human brain. These are highly used for image recognition, the patient diagnosis that comprises many layers to accept data, compute predictions, and provide output in the form of a single prediction

Text Analytics- Text Analytics is used when a company wants to foresee a numerical digit. It is developed on approaches from statistics, machine learning, and linguistics. It aids in anticipating the design of a document and analyses words used in the supplied documents

Regression Model- A regression method is crucial for the organization when it comes to evaluating a numerical number, such as how long it will take a target customer to repurchase the product. It also facilitates how much money someone would spend on marketing campaigns payments over a specific period

Predictive Analytics Tools

IBM SPSS- IBM SPSS (Statistical Package for the Social Sciences) is a data modeling and statistics-based analytics program. It can handle both organized and unorganized data. It also ensures your security and mobility requirements which are offered in the cloud, on-premises, or via hybrid deployment

SAS Advanced Analytics- SAS is the most commonly used tool in analytics. It is a global leader in analytics, which provides a plethora of predictive analytics products. The new age tool provides multiple options to predict the future possibilities through its option library

TIBCO Spotfire- It is used to work on large data sets. It is one of the simplest tools of predictive analytics. Spotfire includes a feature known as one-click predictions that is pre-programmed methods for classifying and clustering large data. It also provided attractive data displays with visualized dashboards. It can provide real-time data and predict the future. The easy user interface helps to connect with apps

RapidMiner Studio- It is the combination of data arrangement and analysis with unique business implementation. You may use this code optimal application to automate the reporting process. Based on the requirement on particular time intervals, it can facilitate changes in your visualizations. The tool keeps 60+ different native integrations where you can import your own data sets and export them to other platforms

H2O- It is an open-source predictive analytics solution that provides quick, low cost, flexible performance with great flexibility. It provides clear visualization of data insights.

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