Prescriptive Analytics
Most of us would be well-aware about the growing adoption of Business Analytics in the decision making of corporates across diverse sectors. However, in order to generate more meaningful insights, companies are going beyond the traditional twin phases of business analytics viz. descriptive and predictive analytics. While ‘descriptive analytics’ aims to provide insights into what has happened and ‘predictive analytics’ helps model and forecast what might happen, the next phase i.e. ‘prescriptive analytics’ seeks to determine the best solution or outcome among various choices, given the known parameters.
As per Digital Journal report, prescriptive analytics market accounted for USD 1.20 billion growing at a CAGR of 30% during the forecast period of 2017 to 2024. Such impressive growth is anticipated due to the potential of prescriptive analytics to ingest hybrid data, a combination of structured (numbers, categories) and unstructured data (videos, images, sounds, texts), and business rules to predict what lies ahead and to prescribe how to take advantage of this predicted future without compromising other priorities.
Variety of companies are specialising in this innovative analytics domain. For example, Ayata, reportedly the first company to develop automated prescriptive analytics capability is helping companies such as Dell, Cisco, and Microsoft to automatically synthesize big data, mathematical sciences, business rules and machine learning not only predict to future outcomes, but also prescribe decision options and the impact of each option.
On the other hand, Profitect is leveraging prescriptive analytics through pattern detection and machine learning to identify areas for improvement like inventory accuracy, out of stocks, pricing accuracy, unsellable merchandise, and assortment discrepancies for companies like Unilever, Abercrombie & Fitch etc. Thanks to prescriptive analytics, these companies have realized 2-5% increase in sales with 10-15% basis point margin improvement.
Even traditional technology companies are partnering with niche companies offering prescriptive analytics solutions. For instance, Wipro has partnered with Lone Star Analysis, a Dallas-based specialist in leading-edge predictive and prescriptive analytics solutions to enhance Wipro’s integrated industrial internet of things (IIoT) platform by predicting future outcomes in real-time and turning that knowledge into action.
Though ‘prescriptive analytics’ has an immense potential to generate better insights, companies need to invest into the right sight of products based on legacy platforms, regulatory requirements as well as future growth requirements in order to reap the maximum benefits.
