Predictive Analytics! Need we say more… In a constantly changing and increasingly complex business environment, firms are spending millions to engage experts who can reveal trends and patterns in data, especially those associated with human behavior. But are they benefitting from these activities? Does using predictive analytics lead to more focused business strategies? The response seems to be a resounding “YES”, as evident from the huge demand and supply of predictive analysis technologies and solutions worldwide.
Energy companies, for example, are seeking tools to forecast demand fluctuation and predict overload situations, so that they can plan production accordingly. Heavy machinery and industrial goods manufacturers with long lead times have adopted sophisticated analytical tools to find the middle ground between lost sales opportunities and high inventory costs. Companies are also using demand drop or customer churn forecasts to weather disruptive market forces. Our experience shows that predictive analysis can improve demand forecast variances from +/-20% to +/-4%.
On the other hand, some companies are looking to tap the right pricing tools for their products. Our team of data experts has been working with Fortune 100 companies to create optimal pricing mechanisms, by identifying price drivers from historical data. At any given time, companies now have better visibility of various cost factors at play and, consequently, the ability to deal with them in time.
Data experts have also made extensive inroads into predictive maintenance techniques, offering superior solutions to check equipment breakdown, prevent energy wastage, and reduce greenhouse gas emissions. Airlines worldwide are using predictive maintenance solutions to forecast flight delays or cancellations, and save money on refunds. A similar solution is widely used by banks to plan ATM maintenance and avoid losing customers due to outages.
Evalueserve foresees an increasing number of businesses using predictive analytics to shield themselves from sudden headwinds, as well increase profits through highly targeted pricing.
If industry experts are to be believed, these ground-breaking technologies and solutions are just the beginning. We can expect many more disruptive applications, as predictive analysis tools and techniques become more robust, and more businesses come looking for solutions. A recent article in the Harvard Business Review confirms this trend. While it highlights that demand forecasting, better pricing, and predictive maintenance are the most relevant areas for big data analysis, “radical new applications” are the next possible outcome of this phenomenon.
The best, as they say, is yet to come.
For more details on how our teams have leveraged different techniques to drive business decisions, please click here.