Share with your friends










Submit

Analytics Magazine

Predictive Analytics: Reinventing industries – predictive game-changer

July/August 2015

Eric SiegelBy Eric Siegel

Despite all the advanced technology lining your pocket, car, home, workplace and even the proverbial cloud floating virtually above your head, the world is a remarkably inefficient, wasteful place. The organizations that make the world go ‘round, the companies, agencies and hospitals that treat and serve us in every which way, constantly get it wrong. Marketing casts a wide net; junk mail is marketing money wasted and trees felled to print unread brochures. Institutions are blindsided by risky debtors and policyholders. Fraud goes undetected. And, critically, healthcare could use all the prognostication it can get. These are heavy costs that tax both you and I in various ways every day. If only there were some way to run things better, to improve the effectiveness of the frontline operations that define a functional society.

Upgrading the World

Predictive analytics serves that very purpose by driving mass-scale processes empirically, guiding them with predictions generated from data. Millions of predictions a day improve decisions as to whom to call, mail, approve, test, diagnose, warn, investigate, incarcerate, set up on a date and medicate.

In this way, predictive analytics reinvents how our world’s primary functions are executed, across sectors. It boasts an intrinsic universality: A great, wide range of organizational activities can be improved with prediction by way of predicting the behaviors and outcomes of people, including individual customers, debtors, patients, criminal suspects, employees and voters. It’s that generality that makes this technology so potent and ubiquitous.

So it comes as no surprise that predictive analytics is booming. The No. 1 skill on LinkedIn’s “25 Hottest Skills That Got People Hired in 2014” is “statistical analysis and data mining,” and No. 6 is business intelligence. While most of the other skills listed are forms of engineering/development (programming, etc.), the meat of the matter – the stuff of business – is what data itself tells us, rather than the infrastructures built to collect and store data.

Reinventing Industries

Prediction makes our planet rotate a bit more smoothly. For example, click on the links following any of the following six industries to see case studies of this effect:

Each case is executed by way of predicting an outcome or behavior (e.g., click, buy, quit your job, default on a loan or die), and those predictions drive operational/treatment decisions (e.g., remarket to, call, give a raise to, decline credit to, or apply a medical procedure on).

Conclusions

Predictive analytics is a game-changer; it’s like “Moneyball” for money.

As predictive analytics’ adoption widens and deepens across sectors and across organizational functions, an inter-industry synergy emerges. Stories are shared between sectors, and the lessons learned and proof-of-concepts viewed from neighboring industries inspire and catalyze growth, creating a cycliceffect.

And that is what the “big” in big data really means – big excitement and big impact.


Eric Siegel, Ph.D., is the founder of Predictive Analytics World, author of “Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie or Die” and executive editor of the Predictive Analytics Times. For more information about predictive analytics, see the Predictive Analytics Guide.

Note: This is an edited version of a longer article, “How Predictive Analytics Reinvents These Six Industries,” that appeared in Information Management. Reprinted here for promotional considerations.

business analytics news and articles

 



Headlines

Does negative political advertising actually work?

While many potential voters dread campaign season because of pervasive negative political advertising, a new study has found that negative political advertising actually works, but perhaps not in the way that many may assume. The study “A Border Strategy Analysis of Ad Source and Message Tone in Senatorial Campaigns,” which will be published in the June edition of INFORMS’ journal Marketing Science, is co-authored by Yanwen Wang of the University of British Columbia in Vancouver, Michael Lewis of Emory University in Atlanta and David A. Schweidel of Georgetown University in Washington, D.C. Read more →

Meet Summit, world’s most powerful, smartest scientific supercomputer

The U.S. Department of Energy’s Oak Ridge National Laboratory on June 8 unveiled Summit as the world’s most powerful and smartest scientific supercomputer. With a peak performance of 200,000 trillion calculations per second – or 200 petaflops – Summit will be eight times more powerful than ORNL’s previous top-ranked system, Titan. For certain scientific applications, Summit will also be capable of more than three billion billion mixed precision calculations per second, or 3.3 exaops. Read more →

Employee engagement a top concern affecting customer experience

Employee engagement has surfaced as a major concern in delivering improvements in customer experience (CX), with 86 percent of CX executives in a Gartner, Inc. survey ranking it as having an equal or greater impact than other factors such as project management and data skills. “CX is a people issue,” says Olive Huang, research vice president at Gartner. “In some instances, the best technology investments have been derailed by employee factors, such as a lack of training or incentives, low morale or commitment, and poor communication of goals." Read more →

UPCOMING ANALYTICS EVENTS

INFORMS-SPONSORED EVENTS

INFORMS Annual Meeting
Nov. 4-7, 2018, Phoenix

OTHER EVENTS

Making Data Science Pay
July 30-31, 12:30 p.m.-5 p.m.


Predictive Analytics: Failure to Launch Webinar
Aug. 18, 11 a.m.


Applied AI & Machine Learning | Comprehensive
Sept. 10-13, 17-20 and 24-25


Advancing the Analytics-Driven Organization
Sept. 17-20, 12-5 p.m. LIVE Online


The Analytics Clinic: Ensemble Models: Worth the Gains?
Sept. 20, 11 a.m. -12:30 p.m.

CAP® EXAM SCHEDULE

CAP® Exam computer-based testing sites are available in 700 locations worldwide. Take the exam close to home and on your schedule:


 
For more information, go to 
https://www.certifiedanalytics.org.