Predictive Analytics vs Descriptive Analytics vs Prescriptive Analytics
Here’s a three-minute guide to understanding and choosing the right descriptive, predictive, and prescriptive analytics for use across your business chain.
With enormous data available to businesses concerning the supply chain, companies are now adopting analytics solutions to extract meaningful and insightful volumes of data to help enhance decision-making.
Deeming all the analytics solutions can be a challenging task. Fortunately, these analytics alternatives are categorised extensively into three different types. None of them is better than another they co-exist and complement each other. For businesses to have a holistic view of the market and how a firm competes effectively within the market need a dynamic analytic environment which encompasses the:
Predictive Analytics: Predicting & Understanding the Future
Predictive analytics follows its roots to “predict” what might occur. These analytics are all about understanding the future. Predictive analytics is useful in providing firms with actionable insights based on real-time data. It also offers estimates concerning the likelihood of a future outcome. Note: no statistical algorithm can “predict” the future with 100 percent assurance. Businesses use these stats to forecast what might occur in the future. Because predictive analytics is based on probabilities. Predictive analytics combines historical data discovered in ERP, CRM, HR, and POS systems to identify data patterns and apply statistical models and algorithms to seize the relationship between multiple data sets. It can be used by companies to forecast customer behaviour and buying patterns to identify emerging trends in sales activities.
Descriptive Analytics: An Insight into the Past
Descriptive analytics does precisely what its name implies: they “describe,” or summarize, raw data and create it into something interpretable by humans. They’re merely the analytics that demonstrates the past. Descriptive analytics is helpful as they enable us to learn from past behaviours, and understand how they can influence future outcomes. This underlying data is a count or aggregate of a filtered data column to which typical math is applied. Leverage descriptive analytics to understand at an aggregate level what is happening in your firm, and when you are willing to summarize and describe multiple business facets.
Prescriptive Analytics: Aforethought on Possible Outcomes
This relatively novel stream of prescriptive analytics enables users to “prescribe” different possible actions and instruct them towards a solution. In short, these analytics are all about advice and suggestions. This analytics attempt to quantify the impact of future decisions to suggest possible outcomes before the decisions are made. At its best, prescriptive analytics not only predicts what will happen but also suggest why it will happen, offering suggestions concerning actions that will benefit from predictions. If implemented appropriately, they can greatly impact business decision-making as well as the company’s bottom line. Biggies in the market have already adopted prescriptive analytics to optimize production, scheduling, and inventory to ensure they’re providing the right products at the right time as well as optimizing the customer experience.
Still, in business, the most compelling areas sakes, marketing, operation, and finance departments are pedestals on descriptive and predictive analytics. Reach out to Smartinfologiks to optimize your business with the analytics solution, today!
