Predictive Data Analysis
After knowing and understanding what happened and the root cause of what happened, one needs to answer the question of what is likely to happen. Predictive analysis is used to predict future outcomes using the previous data.
We can think of it as the next step to take after diagnostic analysis that uses the past summarised data to make predictions of the outcomes of different events. However, in this type of analysis, we majorly perform statistical modelling, which needs technology with manpower to predict. Before applying predictive data analytics to any system, it is important to know results from this analysis are just an estimation, and their accuracy depends on the quality of the data and modelling.
While the above-discussed analysis is common in many businesses, predictive analysis is where many organisations face many difficulties. Many organisation has the potential data, but they lag in skills and manpower to apply predictive analysis. However, there are many Business applications of predictive data analysis:
- Demand Forecasting
- Fraud Detection
- Risk Management
- Workforce planning
This analysis plays an important role in making informed decisions. By being informed about future trends and events, businesses can optimise their operations more accurately and improve their bottom line, and gain a competitive edge in their industry.
Prescriptive Data Analysis
Here, the final type of data analysis is prescriptive data analysis, which goes beyond descriptive and predictive analysis by recommending a course of action based on the analysis results. This approach uses machine learning algorithms and other techniques to analyse data and provide decision-makers with actionable insights.
In the very basic, it combines data from various sources (historical, real-time, future) to determine patterns and relationships. It can be automated and involves simulations and optimisation techniques to determine the best course of action for a particular scenario. There are many different fields like healthcare, finance, and manufacturing where this analysis is involved and helps in optimising operations, pricing strategies, and marketing campaigns.
The application of prescriptive data analytics includes
- Supply chain optimization
- Fraud detection and prevention
- Customer service
- Energy management
However, When we look across various industries, only a few organisations are truly able to implement it. We can consider it as the frontier of data analysis because it combines results from all previously explained types of data analysis, different tools and technologies, which makes it most complex to implement.
Conclusion
The different types of data analysis — descriptive, diagnostic, predictive, and prescriptive — are interconnected and rely on each other to varying degrees. While each type serves a unique purpose and provides valuable insights, moving from descriptive and diagnostic analysis to predictive and prescriptive analysis requires greater technical ability. However, it also unlocks deeper and more valuable insights for your organisation. By leveraging predictive and prescriptive analysis, you can gain a greater understanding of trends and patterns, make more accurate predictions, and ultimately make better decisions that drive growth and success.
We at DSW | data science wizards are focused on helping organisations implement predictive and prescriptive data analytics in the easiest ways possible and reap the benefits of this transformative technology. Our solution platform UnifyAI gives the power to implement any AI use cases easily by combining the right tools and technologies.
About DSW
DSW, specializing in Artificial Intelligence and Data Science, provides platforms and solutions for leveraging data through AI and advanced analytics. With offices located in Mumbai, India, and Dublin, Ireland, the company serves a broad range of customers across the globe.
Our mission is to democratize AI and Data Science, empowering customers with informed decision-making. Through fostering the AI ecosystem with data-driven, open-source technology solutions, we aim to benefit businesses, customers, and stakeholders and make AI available for everyone.
Our flagship platform ‘UnifyAI’ aims to streamline the data engineering process, provide a unified pipeline, and integrate AI capabilities to support businesses in transitioning from experimentation to full-scale production, ultimately enhancing operational efficiency and driving growth.