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Predictive Analytics.
Why did it happen and What Might Happen -Understanding the future
Descriptive Analytics tells what happened. Predictive Analytics tells what may happen if the historical trends continue. Prescriptive Analytics tell what to do. The process takes the data and then prescribes real-world decisions.
Predictive analytics has its roots in the ability to “Predict” what might happen. These analytics are about understanding the future. Predictive analytics provides companies with actionable insights based on data. Predictive analytics provide estimates about the likelihood of a future outcome. It is important to remember that no statistical algorithm can “predict” the future with 100% certainty. Companies use these statistics to forecast what might happen in the future. This is because the foundation of predictive analytics is based on probabilities.
These statistics try to take the data that you have, and fill in the missing data with best guesses. They combine historical data found in ERP, CRM, HR and POS systems to identify patterns in the data and apply statistical models and algorithms to capture relationships between various data sets. Companies use Predictive statistics and analytics anytime they want to look into the future. Predictive analytics can be used throughout the organization, from forecasting customer behavior and purchasing patterns to identifying trends in sales activities. They also help forecast demand for inputs from the supply chain, operations and inventory.