Image Source: HBS |
Prescriptive analytics helps the enterprise leaders to build powerful strategy to get more profits and save cost providing best services with customer satisfaction.
Just think how much data are being generated every day in today’s digital age! The raw data does not provide value without it being processed in a way to get insight. Pattern recognition and knowledge discovery from large-scale data set or big data make data-driven solutions for your business enterprise. To get valuable insight from big data we need to analyze data with the help of several methods and techniques using several data analytics and business intelligence platforms and tools. Data Analytics is a process of analyzing row data to build models for prediction and prescription of a scenario. If we categorize data analytics in three major categories then we can get them as bellow-1)
Descriptive Analytics
2)
Predictive Analytics
3)
Prescriptive Analytics
While descriptive
analytics provides the scenario that has occurred, predictive analytics
forecasts possible outcomes by analyzing historical and present data. On the other
hand, prescriptive analytics finds the best possible solutions from a variety
of options. Prescriptive analytics works by optimizing data from descriptive
and predictive analytics. It creates advanced algorithms or models that help to
find best solutions for decision-making. IBM stated three major benefits of
prescriptive analytics as below-
1)
Improve Operations
2)
Manage Resources more Efficiently
3)
Mitigate Risks
Source: IBM |
How Prescriptive Analytics Work
Prescriptive
analytics works with predictive analytics which works based on statistics and
modeling to predict the future scenario based on historical and current data. Generally,
prescriptive analytics mostly depends on artificial intelligence more
specifically machine learning. Scientific disciplines that include prescriptive
analytics are as below:
-
Machine Learning
-
Operations Research
-
Computer Vision
-
Natural Language Processing
-
Applied Statistics
-
Mathematics
-
Signal Processing
-
Image Processing
Machine learning is an ability of a computer program that works automatically without additional human input. It has the ability to analyze a large amount of data called big data and get insight very faster, comprehensive and error free than a human could manage. Prescriptive analytics works to identify best actions to be taken based on the every single outcomes getting from predictive analytics.
Prescriptive Analytics Applications
Prescriptive analytics helps so many data-intensive business and government organizations. Where cost of human error is very high prescriptive analytics is the main weapon there.
IBM reported
that prescriptive analytics improve operations, manage resource efficiently,
and mitigate risk.
-
Customer satisfaction, profits and cost savings
-
Use cases spanning strategic planning
-
Operational and tactical activities
The use and
value of prescriptive analytics are increasing day by day. Sometimes business models of startups at the beginning are not well fitted for profit.
Consequently, the entrepreneurs fall into financial losses. Prescriptive
analytics help to think about new business moves for generating new business model.
No one wants financial losses so business leaders avoid the risky business
moves and reduce the financial losses. Prescriptive analytics help the enterprise
leaders to build powerful strategy to get more profits and save cost providing
best services with customer satisfaction. Several financial sectors, medical
and healthcare, airlines, oil and gas companies, transportation, electronics
companies, tech companies and so many business enterprises are using
prescriptive analytics to accelerate their activities faster and make high
profits with customer satisfaction.
Author
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