What is Predictive Analytics?
Predictive analytics is an approach that uses data, statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data. The goal is to go beyond knowing what historically happened to providing an assessment of what will happen in the future (prediction). This method empowers executives and managers to take a more proactive, data-driven approach to business strategy and decision-making. Businesses can use predictive analytics for anything from forecasting customer behavior and purchasing patterns to identifying sales trends Predictions can also help forecast such things as supply chain, operations and inventory demands. Predictive analytics can be used to answer questions such as:
- How many units of product X will be sold next month?
- Which asset will fail within the next 75 days?
- Which customers will likely churn in the next 30 days?
- Is this transaction fraudulent?