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6/28/2016
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8 Smart Ways To Use Prescriptive Analytics

Somewhere between blind faith and skepticism is the world of prescriptive analytics. Here, machine-generated action items and potential outcomes meet human decision-making. Finding the right balance between algorithms and common sense can be tricky, so consider these tips.
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Recognize It's A Journey 
Many organizations have added predictive analytics tools to their arsenal after realizing descriptive analytics can only take them so far. What's the difference? Descriptive analytics tools examine business through the rear-view mirror. Predictive analytics can provide a probable view of the future, but users don't always know what action to take. Prescriptive analytics software takes it one step further, offering up action items and potential outcomes.   
'Predictive analytics -- the ability to predict outcomes days, weeks, or months in advance - is getting to be table stakes,' said Doug Henschen, vice president and principal analyst at Constellation Research,  in an interview. 'Prescriptive analytics - the ability to make recommendations or take actions to drive desired outcomes -- is the next step in the road toward analytical maturity. It's not a pervasive capability at this point, but the rise of data-driven insights and [decision-making] is moving many organizations and industries in this direction.'
The higher the cost of a transaction (or the higher the cost of a failure or compliance problem), the more likely one is to see prescriptive analytics tools brought in, Henschen said. That's why it's being applied in industries such as healthcare, life sciences, and financial services.   
(Image: Unsplash via Pixabay)

Recognize It's A Journey

Many organizations have added predictive analytics tools to their arsenal after realizing descriptive analytics can only take them so far. What's the difference? Descriptive analytics tools examine business through the rear-view mirror. Predictive analytics can provide a probable view of the future, but users don't always know what action to take. Prescriptive analytics software takes it one step further, offering up action items and potential outcomes.

"Predictive analytics -- the ability to predict outcomes days, weeks, or months in advance is getting to be table stakes," said Doug Henschen, vice president and principal analyst at Constellation Research, in an interview. "Prescriptive analytics the ability to make recommendations or take actions to drive desired outcomes -- is the next step in the road toward analytical maturity. It's not a pervasive capability at this point, but the rise of data-driven insights and [decision-making] is moving many organizations and industries in this direction."

The higher the cost of a transaction (or the higher the cost of a failure or compliance problem), the more likely one is to see prescriptive analytics tools brought in, Henschen said. That's why it's being applied in industries such as healthcare, life sciences, and financial services.

(Image: Unsplash via Pixabay)

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