Predictive Analytics is the discipline that deals with various fields such as Predictive Modelling, Statistics, Machine Learning, and Data Mining. Predictive Analytics is the practice that enables to predict future outcomes based on the patterns, relationships, and trends from the historical data. The analysis of Data, whether is is small or big data, can be descriptive, predictive, or prescriptive.
Descriptive Analytics answers the question - "What has happened?" . This kind of analytics provides insights into the past. It performs data mining on historical data - analyzes past events - understands the reasons behind past performance and provides insights that guide organisations to approach the future. Most of the organisations management reporting be it sales, marketing, finance or operations are based on descriptive data analysis.
Predictive Analytics answers the question - "What could happen?" . This kind of analytics helps to understand the future. It applies various statistical techniques and machine learning algorithms to past data - identifies the patterns and understands the relationship between various factors and predicts the likelihood of future outcomes. No predictions are 100% accurate, but the predictions provide the certain probability of a possible outcome.
Prescriptive Analytics answers the question - "What should we do?". This kind of analytics empowers analysts to prescribe or recommend the best course of actions to determine solutions that optimize outcomes or minimize risks . It is a step forward to predictive analytics as it suggests actions and decision options for the derived predictions. Prescriptive Analytics uses tools and techniques such as optimization, simulation, decision-analysis, game theory, business rules, and machine learning algorithms to prescribe better decision options.
Organizations should adopt the desired analytics based on their requirement. But, in general, all the above types of analytics should co-exist and should work consecutively in-order to leverage the power of data analytics and thereby achieve improved decision making.
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