When businesses collect data, they do so with the ultimate goal of making better decisions. The data collected typically undergo multiple levels of analysis, including analyzing historical information and making predictions of future outcomes.
Prescriptive analytics is 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, customers' price when booking a flight or an Uber is based on real-time data analysis. Historical price information and customer demand levels take actionable steps to benefit the business.
What is prescriptive analytics?
Prescriptive analytics is the process of analyzing business data to take a specific course of action. While other data analysis techniques are used to define an event or predict a future outcome, prescriptive analytics takes 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 make decisions. 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 you can implement at a moment’s notice. Some computer programs can even implement 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 supported by data means that you’ll be able to respond to customer expectations quicker, solve problems faster, and understand risk levels.
Getting started with a prescriptive analytics approach
Using prescriptive analytics in your business requires a strategic approach. You need to know your goals and how much data analysis will add value to your current business processes. The key steps that you would need to take when implementing data analytics include:
- Setting specific goals: Before setting up complex algorithms for data analysis, you must first 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.
- Developing and implementing key data analysis processes: The next step is developing a data analysis framework after having your vision and goals in place. This process starts with designing appropriate models, creating 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 may choose to enact.
Benefits of prescriptive analytics for your business
- Make real-time, data-driven decisions: Prescriptive analytics streamlines the decision-making process using a data-driven approach. This way, you can remain one step ahead of the competition and take advantage of new opportunities.
- Solve issues that may impede 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 product prices.
- Create a highly customized user experience: Prescriptive analytics 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 real-time website recommendations.
Prescriptive analytics through Mactores
As a leader in data analytics, Mactores offers prescriptive analytics solutions for small and large businesses. We provide scalable, 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. Lets Talk