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

 

Analytics Blog

Electoral College put to the math test


With the campaign two months behind us and the inauguration of Donald Trump two days away, isn’t it time to put the 2016 U.S. presidential election to bed and focus on issues that have yet to be decided? Of course not.


Save



Headlines

Study: Salaries for early career data scientists decrease for first time

Salaries for early career data scientists decreased year over year for the first time in four years as did the percentage of early career data scientists with a Ph.D. while demand for data scientists continued to increase, according to a recently released Burtch Works’ 2017 salary study of data scientists. Salaries for more experienced data scientists generally held steady or increased slightly depending on an individual’s focus area, responsibility and geographic base, according to the report. Read more →

Generous health insurance plans encourage overtreatment, but may not improve health

Offering comprehensive health insurance plans with low deductibles and co-pay in exchange for higher annual premiums seems like a good value for the risk averse, and a profitable product for insurance companies. But according to a forthcoming study in a leading scholarly marketing journal, the INFORMS journal Marketing Science, such plans can encourage individuals with chronic conditions to turn to needlessly expensive treatments that have little impact on their health outcomes. This in turn raises costs for the insurer and future prices for the insured. Read more →

UPCOMING ANALYTICS EVENTS

INFORMS-SPONSORED EVENTS

CONFERENCES

2017 INFORMS Healthcare Conference
July 26-28, 2017, Rotterdam, the Netherlands

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.