Prescriptive Analytics – The Final Frontier

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Prescriptive Analytics The Final Frontier
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• Back in 2014, Gartner placed the field of
  prescriptive analytics at the beginning of the
  Peak of Inflated Expectations in their Hype
  Cycle of Emerging Technologies. And also went on
  to project the prescriptive analytics software
  market to reach 1.88 billion by 2022, with a
  20.6 CAGR from 2017.
• With a potential that big, it begs the question
  what is prescriptive analytics, and why it has
  such a huge impact in the industry?
• We know, Businesses are now moving towards
  data-driven decisions. Every decision that can
  impact business is backed up with hard data
  rather than making decisions that are intuitive
  or based on observation alone. But it is still
  humans who are devising strategies and thinking
  about a reaction to a situation or a problem.
• Now imagine a situation where you know what will
  happen next and you must make a decision on how
  to diffuse this situation. And a possible
  solution or decision options are suggested by a
  machine or software. This would save hours
  strategizing!

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• This is the entry area of prescriptive analytics.
  It doesnt stop at showing a likely outcome but
  continues to demonstrate suggested actions to
  make the end-users more successful, profitable or
  responsive to situational needs. It is a form of
  advanced analytics which examines data or content
  to answer the question What should be done? or
  What can we do to make it happen?
• With this basic idea of prescriptive analytics,
  lets see how this innovation could be the next
  big thing for any industry.
• The field of data analytics can be categorized
  into three different forms of execution.
• Descriptive Descriptive analytics provides
  insights into the past by answering what
  happened.
• Predictive Predictive analytics takes it a step
  further by forecasting what is likely to happen
  
• Prescriptive Prescriptive analytics prescribes
  an actual solution, as in what we should do
  about it. It recommends the best course of
  action. It will not be an overstatement to say.

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One key implementation of prescriptive analytics
is in the form of decision optimization
solutions. Complement descriptive and predictive
analytics to deliver desired business results by
applying prescriptive techniques to evaluate
millions of possibilities, balancing tradeoffs
and business constraints to find the best
possible solution.
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Prescriptive Analytics Use Cases

• In a pursuit to enable Critical healthcare
  decisions to be evidence-based, transparent and
  real-time data-driven, the industry is investing
  in decision optimization solutions to meet the
  challenges of an aging population, constraint
  budgets, and regulations
• Consider an example of a healthcare insurance
  company that spots a pattern in its claims data
  for the previous year showing a significant
  portion of its diabetic patient, where the
  population also suffers from retinopathy. Using
  predictive analytics, the insurer estimates the
  probability of an increase in ophthalmology
  claims during the next plan year.
• Prescriptive analytics are then used to model out
  the cost impact if average ophthalmology
  reimbursement rates increase, decrease or remain
  the same for the next plan year, then recommend a
  course of action.
• Decision optimization solutions like these
  complement descriptive and predictive analytics
  to deliver desired business results by applying
  prescriptive techniques to evaluate millions of
  possibilities, balancing tradeoffs and business
  constraints to find the best possible solution.

• 1. Travel Industry Pricing Optimization

• Online travel websites, such as airline ticketing
  services, hotel websites or car rental websites,
  have turned to prescriptive analytics to shift
  through multiple complex iterations of travel
  factors, purchase and customer variables such as
  demographics and sociographic, demand levels, and
  other related data sources to optimize their
  pricing and sales.
• Hence recommending what price to be set to gain
  the most out of the transaction.

• 2. Health Care Sector Improving Care, Reducing
  Costs

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• 3. Sales and Marketing Optimizing Campaign
  Spends
• With enormous customer information coming in
  through ever-increasing digital touchpoints,
  sales and marketing are no longer limited to
  predictive analytics. The industry is now
  crossing a barrier by building Prescriptive
  models that help determine which campaigns to run
  to maximize the Return of Investments and
  optimize their target promotions down to a
  specific product category.
• Beyond all these applications, the simplest (to
  comprehend) and the most amazing use case of our
  time is Googles driverless cars. They must make
  multiple decisions about their next step based on
  predictions of future outcomes. Example When
  turning, the car must anticipate everything that
  a normal driver must anticipate pedestrians,
  traffic, and take the action based on the impact
  that decision will have.

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• Prescriptive analytics, with all its power, is
  the future of decision-making. Despite this, just
  10 of organizations currently use some form of
  prescriptive analytics, this also according to
  Gartner, will grow to 35 by 2020.
• There are several factors for this slow adoption
  
• The unfamiliarity of the concept
• Complex understanding (even more than predictive
  analytics)
• Confusion on what value does it bring to the
  table
• Need of enormous data sets.
• With all said and done, Prescriptive analytics is
  still a long way away before it will be a common
  language. With its potential to comprehend
  millions of data points and its intricate
  mathematical complexity to offer a data-driven
  decision choice, it is the next (or the final)
  frontier in the field of analytics. A step in the
  future!
• To look at the larger scenario on how
  prescriptive analytics can assist your
  organization forecast future outcomes based on
  factual data and analytics techniques such as
  machine learning, connect with us on
  marketing_at_anblicks.com.

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Thank you!

• marketing_at_anblicks.com

• www.anblicks.com