Predictive or Prescriptive Analytics? Your Business Needs Both
Your business is probably using analytics to predict trends and plan for the future. But don’t forget about prescriptive analytics, which leads to concrete decisions.
Predictive and prescriptive analytics are two important parts of a data strategy.
Predictive analytics helps find potential outcomes, while prescriptive analytics looks at those outcomes and finds even more paths of options to consider.
Both types of analytics can help any small business get ahead of the curve.
This article is for small business owners who are considering implementing predictive and prescriptive analytics practices but don’t yet understand the concepts in a meaningful way.
Big data gets a lot of buzz in the business world. It’s true that data analytics can give you deep, useful insights about your business and its customers, but to benefit from those insights, you have to know how to interpret the data and apply it to your business strategy.
There are three main components of business analytics: descriptive, predictive and prescriptive. Descriptive analytics, the “simplest class of analytics,” is the raw data in summarized form, Michael Wu, chief scientist at Khoros / Lithium Technologies, wrote in a blog post. It includes social engagement counts, sales numbers, customer statistics and other metrics that show you what’s happening in your business in an easy-to-understand way. The other two types of analytics, predictive and prescriptive, take that data and turn it into actionable information.
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