When businesses collect data, they do so with the ultimate goal of making better decisions. The data collected typically undergoes multiple levels of analysis, including analyzing historical information and making predictions of future outcomes.
You can think of prescriptive analytics as the deepest level of data analysis, as it involves using the available information to implement solutions and carry out specific tasks. When following a prescriptive analytics approach, you will take actionable steps based on the insights that business data uncovers.
Prescriptive analytics is applicable in many different industries. For example, the price that customers see when booking a flight or an Uber is based on real-time analysis of data. Historical price information and customer demand levels are used to take actionable steps that will benefit the business.
What is prescriptive analytics?
Prescriptive analytics is the process of analyzing business data, with the goal of taking a specific course of action. While other data analysis techniques are used to define an event or predict a future outcome, prescriptive analytics is used to take actionable steps towards solving a problem (or exploiting an available opportunity).
During this process, algorithms, machine learning, and data mining techniques are used to examine large amounts of data and to make decisions from it. New technologies have also made prescriptive analytics more accessible to businesses.
In this way, such machines can automatically detect trends and relationships in business data- and recommend decisions that you can implement at a moment’s notice. Some computer programs are even capable of implementing such decisions automatically (this is what happens in the case of airline ticket prices or Uber prices).
Prescriptive analytics streamlines the decision-making process for businesses. Taking actionable steps that are supported by data means that you’ll be able to respond to customer expectations quicker, solve problems at a faster pace, and understand levels of risk.
Getting started with a prescriptive analytics approach
Using prescriptive analytics in your business requires a strategic approach. You need to know what your goals are, and how such data analysis will add value to your current business processes. The key steps that you would need to take when implementing data analytics include:
1. Setting specific goals
Even before setting up complex algorithms for data analysis, you first need to establish a vision for your business. This vision should include a framework of how your company will make decisions, and how these decisions will impact performance.
In other words, you should have an end-goal for how prescriptive analytics decisions will impact your business in the long run.
2. Developing and implementing key data analysis processes
After having your vision and goals in place, the next step is to develop a framework for data analysis. This process starts with designing appropriate models, developing a data management strategy, and implementing specific decisions based on analyzed data.
You may also choose to automate the decision-making process or to receive recommendations/solutions that you can act upon.
Benefits of prescriptive analytics for your business
- Make real-time data-driven decisions
Prescriptive analytics streamlines the decision-making process by using a data-driven approach. In this way, you can remain one step ahead of the competition and take advantage of new opportunities.
- Solve issues that may be impeding growth
Prescriptive analytics is also a way of solving business problems. For example, if your current pricing strategy is reducing sales, using machine learning to measure many different market conditions could result in more effective prices for your products.
- Create a highly customized user experience
Prescriptive analytics also allows you to develop a quality and customized experience for all customers. Businesses can use this approach to recommend products, deliver timely discounts, and provide website recommendations in real time.
Prescriptive analytics through Mactores
As a leader in data analytics, Mactores offers prescriptive analytics solutions for both small and large businesses. We provide scalable and cloud-based solutions that allow your company to make real-time decisions- backed by quality data. Start your journey towards prescriptive analytics with Mactores today.