So many reports to run through and scrutinize just to get an idea about the operational status of the business enterprise, What has happened? (Descriptive) obviously leads to know why it has happened? (Diagnostics) and if you are able to diagnose why things happened that way in the past and present then your next may be, What is likely to happen? (Predicting). You are ended with too many options, then next obvious question may be, What is best option to choose or best course of action to prescribe? (Prescriptive)
How successful would be your business if you could make decisions about the future with certainty? What would be turn of event if your customers’ needs were known with enough lead time to exploit that information before your competitors had any inkling? This is the truth in case of all forward looking business manager, leaders, and entrepreneurs.
Today the expectation of traditional BI systems has extended into a new area, the analytics BI. The organization wants to get a 360-degree view of their customers’ behavior, and control as much future uncertainty as possible. The effect that predictive analytics has on a business is largely determined by the fact as to how widely and how aggressively the business uses it.
The central element of predictive analytics is the predictor, a variable that can be measured for an individual or other entity to predict future behavior. For example, an insurance company is likely to take into account potential driving safety predictors such as age, gender, and driving record when issuing car insurance policies.
Multiple predictors are combined into a predictive model, which, when subjected to analysis, can be used to forecast future probabilities with an acceptable level of reliability. Predictive Analytics is used in wider area that has the greater the potential impact on the business goals.
If Predictive Analytics indicates what will happen; Prescriptive Analytics describes what should happen to change the course of business. Ideally it says what can be done to make it happen?
Simply put it while predictive analytics helps model future events, the prescriptive analysis aims to show users how different actions will affect business performance and point them toward the optimal choice.
The technique of the Prescriptive Analytics is to translate a forecast into a feasible plan for the business, and helps users to identify the best steps to implement. There are two primary approaches – simulation and optimization.