by Chandran Saravana, Predictive Analytics, SAP

Businessman analyzing pie chart on digital tabletWe’ve all experienced some form of predictive analytics in our day-to-day lives – each time we check the seven-day weather forecast or price airline tickets for a future trip. And while we’ve become accustomed to this technology in our daily lives, how many businesses take advantage of this power to anticipate the future?

According to a best-practices report by The Data Warehousing Institute (TDWI), “Predictive Analytics for Business Advantage,” not many: Only about 20% of organizations surveyed report having some predictive analytics activity already under way.

That’s not to say companies are completely in the dark. According to a report by Loudhouse Consultancy, “Predicting the Future of Predictive Analytics,” which surveyed more than 300 business decision makers in both the United States and the United Kingdom:

  • 61% of businesses say predictive analytics is currently an investment priority within their organization
  • 74% of businesses say predictive analytics will be an investment priority within their organization within the next five years

Market awareness and adoption of predictive analytics are increasing for a number of reasons. They include the increased computing power and advancements made in in-memory computing technology, a better understanding of and greater desire for better value from Big Data, and advanced solutions that are more user-friendly. If predictive analytics isn’t on your business radar yet, you risk falling behind.

Technology Is Power

Once reserved for data scientists and a few select industries, predictive analytics is now empowering a broader spectrum of users – that now includes decision makers and business analysts – to make faster, more informed decisions. Easy-to-use tools enable them to take advantage of intuitive models to uncover new patterns, predict trends, and respond quickly to change. The introduction of in-memory computing technology has dramatically reduced the time and cost of data processing and makes it possible to analyze vast volumes of data in real time.

As organizations settle into using predictive analytics, they have the opportunity to open the door for new areas of analysis. While structured data remains king for predictive analytics, with 98% of companies getting data from tables and records1, solutions are available that can integrate new data points into the mix. This new data includes geospatial and unstructured data like social media. As a result, businesses can gain new insights into customers and how best to deliver value to them.

According to the report by Loudhouse, leading companies in the United States and the United Kingdom have reported the following key benefits associated with predictive analytics:

  • Better business performance potential (61%)
  • Greater insights into business dynamics (50%)
  • Greater use of data already available (49%)

However, you can expect the value of predictive analytics to ignite other initiatives that can also directly impact the bottom line of your business, such as securing customer revenue or detecting fraud.

A Group Effort

It’s easy to see how predictive analytics can play a key role in the future success of your business. Yet without your entire workforce on board and equipped with the user-friendly tools to turn insight into action, your future plans may come to a sudden stop.

Vendors are developing solutions for predictive analytics that can take full advantage of Big Data to make accurate forecasts, align core lines of business with actionable insights, and drive measurable results. When the power of predictive analytics is accessible by more people within your organization, your company can take full advantage of the data and gain see into – and thereby take control of – the future.

Read the reports by Loudhouse and TDWI. Learn more about how predictive analytics can identify untapped opportunities and expose hidden risks buried inside vast amounts of data – all in real time.

 

1TDWI Best Practices Report, “Predictive Analytics for Business Advantage,” 2014