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Fourthly, the reason for predictive analytics is to make improvement which is done by advancing core business capacity competitively.
Objective - Improve
It is of prime importance to predict the future trends which works as a tool to achieve business targets and gain competitions. Changes in customer demands and vitality of social media had made predictive analytics more important. In order to improve operational efficiencies and provide new services one needs to know, understand and use data-analytics.
One need not have to specify analytic algorithms or be a statistics expert, the value lies in leverage of analytics and its applications relating to business goals. As customer demands, market competitions are continuously increasing and budgets reducing there is a real need for proactive management instead of reactive one. Predictive analytics plays a vital role in this context.
To identify warning indicators in advance it is necessary to predict the time of the occurrence of the problems. For example in times of change of operational process pattern it is the analytics which permits the changes to be forecasted and for better understanding which helps in improved operations.
Predictive analytics involves statistical analysis which includes extracting information from data and which is further used for making predictions about future trends and future behavior. But predictive analytics cannot be considered as a crystal ball or a tool which tells everything about the future.
In Predictive analytics the relationships between the past occurrences and variables are captured and this is information is used for prediction of future outcomes. This helps companies to shift to proactive from reactive management.
For expansion of opportunities and revenue protection proactive management plays an important role.
Customers 'expectations and demands are met in terms of quality of products and services through predictive analytics. To maintain performances prediction in the changes of service can be made by the companies through accurate view of services involved in business,etc.
Even if the analytics is capable of building patterns form historical data it sometimes fails to build a newly evolved pattern. Without historical data analytics takes a long time to build patterns. It is the best when predictive analytics is applied so that it takes all the advantages of historical data , topology, adaptive algorithm, etc.
The normal behavior of performance of the resource can be known when data is analyzed. It includes seasonality. This approach helps the system for learning normal behavior. Notification arises at the time when a deviation from the norm occurs in the performance. This relates to deviation from slow to the busiest time. For example advantage is taken by a financial customer ,the advantage is that seasonal trends are quite consistent. It may sometime happen that when deviation occurs from seasonal expectations , notification arises before thresholds are crossed.
Predictive Analytics assists to identify capacity level of infrastructure and to understand customers. In this way degradation can be prevented in advance and also it can be identified where extra capability is needed in the components. Financially speaking, it is of no good to keep stock of unused equipment-connected or unconnected. Such analytics helps to ensure equipment to be ordered in time.
By managing thresholds one can find problems and this has some vital implications. One needs to know the thresholds required and that needs to be managed. Also the relationship between key indicators should also be understood. More thresholds are required when environment turns more complex and dynamic.
Without adding thresholds predictive analytics is capable of enlarging traditional management techniques and also new insights from data is provided. With increasing competitions and complexity of infrastructure and market environment analytics plays a key role.