Prescriptive Analytics – The Final FrontierPosted by Mary on November 16th, 2021 Back in 2014, Gartner placed the field of prescriptive analytics at the beginning of the ‘Peak of Inflated Expectations’ in their Hype Cycle of Emerging Technologies. And also went on to project the prescriptive analytics software market to reach .88 billion by 2022, with a 20.6% CAGR from 2017. With a potential that big, it begs the question: What is prescriptive analytics, and why has such a huge impact on the industry? We know, Businesses are now moving towards data-driven decisions. Every decision that can impact business is backed up with hard data rather than making decisions that are intuitive or based on observation alone. But it is still humans who are devising strategies and thinking about a reaction to a situation or a problem. Now imagine a situation where you know what will happen next and you must make a decision on how to diffuse this situation. And a possible solution or decision options are suggested by a machine or software. This would save hours strategizing! This is the entry area of prescriptive analytics. It doesn’t stop at showing a likely outcome but continues to demonstrate suggested actions to make the end-users more successful, profitable or responsive to situational needs. It is a form of advanced analytics which examines data or content to answer the question “What should be done?” or “What can we do to make it happen?” With this basic idea of prescriptive analytics, let’s see how this innovation could be the next big thing for any industry. The field of data analytics can be categorized into three different forms of execution.
One key implementation of Prescriptive analytics is in the form of Decision optimization solutions. Complement descriptive and predictive analytics to deliver desired business results by applying prescriptive techniques to evaluate millions of possibilities, balancing tradeoffs and business constraints to find the best possible solution. Prescriptive Analytics Use Cases 1. Travel Industry – Pricing Optimization 2. Health Care Sector – Improving Care, Reducing Costs Decision optimization solutions like these complement descriptive and predictive analytics to deliver desired business results by applying prescriptive techniques to evaluate millions of possibilities, balancing tradeoffs and business constraints to find the best possible solution. 3. Sales and Marketing – Optimizing Campaign Spends Beyond all these applications, the simplest (to comprehend) and the most amazing use case of our time is Google’s driverless cars. They must make multiple decisions about their next step based on predictions of future outcomes. Example: When turning, the car must anticipate everything that a normal driver must anticipate – pedestrians, traffic, and take the action based on the impact that decision will have. Prescriptive analytics, with all its power, is the future of decision-making. Despite this, just 10% of organizations currently use some form of prescriptive analytics, this also according to Gartner, will grow to 35% by 2020. There are several factors for this slow adoption:
With all said and done, Prescriptive analytics is still a long way away before it will be a common language. With its potential to comprehend millions of data points and its intricate mathematical complexity to offer a data-driven decision choice, it is the next (or the final) frontier in the field of analytics. A step in the future! To look at the larger scenario on how prescriptive analytics can assist your organization forecast future outcomes based on factual data and analytics techniques such as machine learning, connect with us on marketing@anblicks.com Like it? Share it!More by this author |