What is Prescriptive Business Analytics?
Prescriptive Analytics which is seen as the “Future of Data Analytics” stretches its use case beyond explanations and predictions. This business data analytics determines the optimal course of action by focusing on all the relevant business variables. Its Machine Learning algorithms help companies to parse through massive data very easily. As a result, the concept of Prescriptive Business Analytics is revolutionizing the business perspective lately by facilitating data-informed decision-making and giving shape to goal-oriented strategies.
Use Cases of Prescriptive Business Analytics
The combination of Prescriptive and Business Analytics in the business ecosystem is paving the way toward precise and progressive management processes. As a result, a few essential use cases of Prescriptive Business Analytics are as follows.
|Supports Investment Decisions||Being backed by algorithms Prescriptive Business Analytics venture capitalists and other investors weigh associated risks. As a result, this data analytics model plays a complementary role in making an investment decision based on a thorough study.|
|Assists Sales Functions||Prescriptive Business Analytics helps sales personnel facilitate lead scoring/ranking. This refers to the process of assigning a point value to the various actions and forming a sales funnel. The actions talked about here are page views, email interactions, site searches, content engagement, etc.|
|Facilitates Content Curation||The social media platform gets a big boost from Prescriptive Business Analytics through its algorithmic content recommendation feature. This allows the social media experts to analyze the data and develop customized content for the distinct user base.|
|Detecting Fraudulent Activities||The algorithmic analysis drawn using Prescriptive Data Analytics helps businesses like Banks and Financial Institutions to identify fraudulent activities. The transactional data pattern alerts the organization and provides the recommended course of action.|
|Email Automation||Marketers use Prescriptive Business Analytics to deliver the email content based on several categories which are defined using data patterns. This allows companies to facilitate personalized messaging and gain better conversion rates for the businesses.|
Metric Used for Prescriptive Business Analytics
Being a business-focused analysis concept Prescriptive Business Analytics considers three major aspects of the business – Finance, Process, and Customer. As a result, metrics used to evaluate the business performance and practices using Prescriptive Analytics are also based on these three metrics categories.
|Financial Metric||KPIs tied to financials focuses on revenue, cost, and profit margins of the company. This includes measurement of certain ratios such as net profit ratio, current ratio, turnover ratio, activity ratios, etc. These trends and patterns associated with these financials help businesses to take better decisions.|
|Process Metric||The process metric in the Prescriptive Business Analytics measure and monitor the operational performance of the organization. The percentage of defective products, productivity level, and everything that impacts the business process is taken into account here and patterns are analyzed.|
|Customer Metric||The customer-centric KPIs such as Customer Lifetime Value (CLV), Customer Acquisition Cost (CAC), etc, analyze the effectiveness of the efforts put forward by the company to acquire customers.|
Examples of Companies using Prescriptive Business Analytics
The top industrial players have already utilized the features of Prescriptive Business Analytics for creating a better business ecosystem for themselves. Few of the renowned names that have included these advantages in their space are.
|Amazon||This E-commerce giant uses Prescriptive Business Analytics in combination with Descriptive Analytics to predict the probability of the customer making a purchase. The company uses date-time information to understand the behavioral approach of the company.|
|Netflix||By parsing through data and using AI-powered algorithms Netflix tracks users’ watch history, rating, demographics, preferences, etc. As a result, this technological inclusion in Netflix brings 80% accuracy in the data it considers.|
|Starbucks||Starbucks uses data-driven technology to extract information about the purchasing habits of its customers. The company collects data about when, where, and how members buy coffee and based on which the company recommends food and drink items to its customers.|
|Sephora||The company uses a different combination of data analytics including Prescriptive Analytics to guide its customers through the catalog. Based on customers’ interests the company creates personalized profiles of the customer and gives them the most accurate recommendations.|
|Tik Tok||In the social media section, Tik Tok used Prescriptive Analytics to create the “For You” feed. This improves the user’s interactions on the app and further leads to better scoring in sales.|
Tools used for Prescriptive Business Analytics
There are several tools and software available in the market that are boosting the complete ecosystem of Prescriptive Business Analytics.
|IBM Prescriptive Analytics||This trusted data storage and BI provider is also known to offer prescriptive analytics tools to support the decision, schedule, and plan mathematical optimization. Such tools comprise visual data science and data science analytics concepts and address the varying level of data complexity.|
|Alteryx||It is a business intelligence solution that provides the full suite of optimization for making smart business suggestions. These suggestions are based on data variables that are derived from the best set of circumstances.|
|Knime||It is an analytical platform that is open-source in nature and helps data scientists to combine visual workflows to develop enhanced data presentations. As a result, the Knime server web portal custom reports and let businesses take an independent move.|
|River Logic||This prescriptive business analytics tool is broadly designed for supply chain, manufacturing, and logistics companies where it combines the inventory, financial, and environmental data to build strategies. Also, by providing the key financial document for every user program, this tool helps to save time for the team.|
|Avata||It is a Prescriptive Analytics tool that focuses on the insurance and energy industries. The meta-algorithm approach used here monitors the data and helps the team. As a result, it allows companies to manage information obtained from multiple sources with a lesser technical load and problems.|
|NG Data||This is an Intelligent Engagement platform that is specifically meant for retailers, utility industries, and consumer financial brands. Here, algorithmic scoring and formulas are used to understand the customer preferences and build the strategic framework based on the customer lifecycle.|
Prescriptive Business Analytics – A Future of Big Data
Being an automated analytical concept Prescriptive Analytics holds the potential to replace human decision–making to the greatest extent. Automated decision-making for businesses is a need in the era when the competitors’ every approach is way more advanced. As a result, the inclusion of Prescriptive Business Analytics allows the companies to take calculative and well-researched steps toward growth strategy.
The studies suggest that the Prescriptive Analytics market grew by 22% between the years 2014 and 2019 amounting to $1.1 billion. And this number will exponentially grow in the days to come when renowned business ecosystem like Amazon, Netflix, Starbucks, etc has already shown their beneficial impacts on the world.