Your company is most likely already making use of Descriptive Analytics, which is often described as the simplest form of analytics as it is essentially your raw data in interpreted and summarized form. It is your sales counts, social engagement metrics, customer statistics and other data that lets you know what has happened in your organization.
The next two forms that will help transform your organization are predictive and prescriptive analytics. This will turn the data gained from descriptive analytics into optimal decisions and valuable insight. When used together, both analytic options can help your organization form the most robust and effective business strategy available.
In today’s increasingly fast-paced landscape, predictive analytics alone may not be enough to keep up with your competition. With prescriptive analytics, gain valuable recommendations for the best next steps for almost any business process in order to accelerate success or arrive at your desired outcome. While predictive analytics forecasts possible outcomes, prescriptive analytics can help you change it to your benefit.
Prescriptive analytics complements predictive by providing insight to key decision makers about varying available choices, and their forecasted impact on several KPIs (key performance indicators). A popular example is a traffic navigation app that allows you to pick a start point and end point, before presenting you with different available routes and the likeliest ETA for each.
Another example is how a nationwide clothing store might use both predictive and prescriptive analytics together to forecast that the sales of lighter clothing will increase as warmer weather slowly arrives. Based on this insight gained from predictive analytics alone, most companies might increase inventory for warm-weather clothing at every store. But the reality is that the spike in sales won’t happen at once all over the country—it will most likely begin in the southern parts of the country before moving upwards based on seasonal patterns. With prescriptive analytics, you can input sources like climate and weather data to implement a better action based on analytical recommendations.