Whether you’re aware of it or not, predictive analytics—the practice of analyzing past and present data to predict an outcome—is everywhere. Using technology like neural networking, machine learning, and artificial intelligence, predictive analytics firms are forecasting the future in everything from banking and finance to healthcare and child services. And it continues to expand.
Benefits of Predictive Analytics
Predictive analytics is so pervasive because it offers many benefits. With it, organizations can:
- Identify trends and patterns
- Spot anomalies
- Predict behavior
- Increase revenue
- Make strategic decisions
Predictive analytics have many applications. When a potential homebuyer applies for a loan, the mortgage company needs to know if the buyer will make payments on time. Predictive analytics can calculate the odds. When it comes to shopping, retailers want to know what their customers will buy next and what will drive sales. Predictive analytics can help find the answers. Banking. Retail. Healthcare. Education. There are few industries predictive analytics services don’t touch.
According to a study by market research firm Aberdeen, companies that used predictive analytics to better address their customers’ wants and needs increased revenue by 21% year over year. But predictive analytics doesn’t just help businesses make money. Predictive analytics companies also help save lives by flagging potentially dangerous scenarios in healthcare, weather, social services, and more.
Here are a few real-life examples:
Life-Saving Applications of Predictive Analytics
Florida’s Hillsborough County used predictive analytics services to improve child welfare. By analyzing state historical data about neglect and abuse, a data software company developed predictive models to flag high-risk cases. Child welfare officials then reviewed these cases and acted upon those predicted to result in serious injuries or death. As a result, Hillsborough County has seen a significant decline in abuse-related deaths.
The University of Chicago Medical Center (UCMC) used predictive analytics to reduce operating room delays, saving the hospital an estimated $600,000 per year. By combining real-time data with a complex algorithm, UCMC was also able to improve workflows, streamline room handoffs, and reduce patient complications.
Using a predictive algorithm derived from electronic health records, health system Kaiser Permanente flagged high-risk cases and discovered that the top one percent of flagged patients were more likely to commit suicide. With this finding, Kaiser showed how predicative analytics can save lives by identifying urgent cases and spurring preventative actions.
Thanks to predictive analytics, weather forecasting has improved immensely over the last few decades. Satellites orbiting the Earth feed data back down, enabling meteorologists to predict hurricane tracks three days out and issue blizzard warnings several days in advance. As a result, people in affected areas get warnings about severe weather much sooner than in the past and have more time to evacuate or seek shelter.
The Future of Predictive Analytics
Predictive analytics companies use a variety of technologies and techniques to make predictions that aid all sorts of industries. And the practice is only growing. According to Transparency Market Research, the global predictive analytics market will be worth $6.5 billion by the end of 2019, up from $2 billion in 2012. Another study predicts the market will reach $12.4 billion by 2022.
The segments most likely to partner with predictive analytics firms are finance and risk, sales and marketing, customer and channel, and operations and workforce. And as predictive analytics consultants and companies find more uses for big data, the practice will expand further.
Getting Started with Predictive Analytics
Interested in predictive analytics but not sure how to get started? Help is available to organizations of all sizes. Predictive analytics consultants can help businesses better understand their data set, build an effective predictive model, deploy it, and then evaluate its performance. While deploying predictive analytics may seem complex and overwhelming, with the right help it’s more than achievable.
Companies big and small are using predictive analytics to increase sales, improve processes, and save lives. Don’t miss your chance to follow suit.