Today’s businesses are increasingly affected by a convergence of multiple forces: social media, the cloud, business networks, big data, analytics, and more. These bring with them a huge amount of valuable data and information, much of it available in real time. Yet as SAP cloud senior vice president and chief marketing officer Tim Minahan points out, we’re reaching the point when “real time” is no longer good enough. For example, if you hear in real time that your manufacturing plant has gone down, or your biggest customer just defected to a competitor, it’s already too late. Instead, to stay ahead, companies must become predictive businesses.
So what is a predictive business? One able to anticipate future events with a high degree of accuracy, then assess potential responses and implement the best ones quickly and effectively. And while multiple resources can help you attain this goal—such as the cloud, mobility, and business networks—predictive analytics is the most important. At the Ariba LIVE™ 2014 conference, James Tucker, senior director of business network strategy and marketing for Ariba, and Will Caseber, director of value engineering for Ariba, led a session on why predictive analytics matters so much—and how you can use it to drive success for your business.
“In the future, businesses will be expected to possess the talent, tools, processes, and capabilities to analyze past business performance and events to gain forward-looking insight to drive business decisions and actions.” Lawrence Maisel and Gary Cokins, Predictive Business Analytics: Forward Looking Capabilities to Improve Business Performance
What is predictive analytics?
As Tucker explains, “Predictive analytics is like preventative medicine for business.” It uses various techniques from statistics, modeling, machine learning, and data mining to analyze current and historical facts to predict future events. In business, predictive models use the patterns and relationships found in historical and transactional data to identify risks and opportunities, helping companies make informed, intelligent decisions.
Tomorrow: Why does predictive matter for your company?