Why businesses are investing in predictive analytics
Brought to you by the Villanova School of Business
Every business leader wishes it was possible to see into the future, discovering the best ways to invest capital and resources while positioning an organization for long-term growth. The next best thing is drawing on a detailed understanding of what happened in the past to extrapolate the opportunities that lie ahead. Predictive analytics allows organizations to project the outcomes of current market conditions and business initiatives so leaders can make informed decisions.
With the right models and algorithms in place, a company is able to plan for future success and head off any problems before they put those goals in jeopardy. It takes big-data experts to establish this approach as an integral part of business strategy by collecting the necessary information, interpreting those findings and suggesting the next moves. Earning a master’s in data analytics could be a major step forward in finding a career in predictive analytics.
The basics of predictive analytics
Predictive analytics is not a new concept. However, while mathematicians and programmers have used these statistical methods for many years, it’s only recently that technology has revealed their full potential. A wide variety of organizations now store huge volumes of data, computers have the processing power to quickly sort through the information, and professionals use sophisticated tools to discover relevant insights.
As Harvard Business Review explained, regression analysis is the primary form of predictive analytics employed for business purposes. This statistical process is based in estimating the relationships between two variables, such as income level and visits to an e-commerce site. Based on those relationships, it’s possible to build predictive models and gain a sense of how developments will occur within an organization or industry.
With big data and sophisticated software on their side, experts use predictive analytics to solve problems and spot chances for growth. Advances in automation and machine learning mean that systems can do much of the work of noting anomalies and areas for improvement. The power of big data is driving the future of how people in all fields perform their daily tasks, and professionals who understand the complexities of predictive analytics are in increasing demand.
Putting data at the forefront of business
Predictive analytics has numerous applications within companies, creating a broad range of opportunities for data experts. Among the most common forms of predictive analytics is credit scoring. These models draw on a person’s history to help financial institutions and other organizations assess the risks of providing services to that individual.
Another crucial way predictive analytics can bring benefits to a company is by empowering operations. With a clear awareness of how the need for resources and inventory will evolve over time, an organization can stay on top of demands, and logistics function with greater efficiency. By updating forecasts and adjusting how the business brings goods to retailers or customers, there’s room for ongoing optimization in the supply chain.
Cybersecurity is another area where predictive analytics has proven invaluable. By detecting patterns of behavior, including any suspicious deviations from a normal user profile, systems catch individuals committing fraud or breaching information. Rooting out vulnerabilities and investigating advanced persistent threats makes sensitive consumer information—and business as a whole— safer.
For marketing departments, predictive analytics transforms the ways companies interact with customers. Based on the data they have acquired, marketers determine the best next step in a relationship, sending out appropriate messages or offers. With algorithmic models, it’s becoming more feasible for organizations to detect the phase a potential buyer has reached along a purchase journey and tailor responses accordingly.
Learning to harness predictive insights
Collecting robust stores of data is only the start of a forward-looking strategy. Organizations must have experts who understand how to work with quantitative information and determine the business applications for what they discover. These professionals bring to the table an advanced knowledge of the principles and tools necessary to project what’s coming next.
With the right education, professionals can apply predictive analytics to a tremendous variety of business problems. Earning a master’s of science in analytics provides students with the skills they need to harness big-data insights and guide organizations forward. Villanova University’s online data analytics master’s program provides an education in the latest methods and software, so graduates are ready to make the most of big data on an everyday basis.
Villanova School of Business has designed its curriculum to meet the demands of today’s data-driven companies. Visit the program page to learn more and find out how you can apply.Recommended Readings:
- The increasing importance of data for growing your business
- A look ahead for analytics technology’s place in IT security
- Analytics professionals are critical to successful use of big data