If Only They’d Had Predictive Analytics
Predicting the future is tricky business – there’s always the risk that time will exposure your folly. But with every new year, pundits and authorities continue to step out on thin ice and announce their predictions for the future.
While chance alone will favor some forecasts, there are always those that are far off the mark. Take, for instance, these famously false predictions on the future of technology:
1876: This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. — from an internal Western Union memo.
1880: Everyone acquainted with the subject will recognize it as a conspicuous failure. — Henry Morton, President of the Stevens Institute of Technology, passing judgment on Thomas Edison’s light bulb.
1895: Heavier-than-air flying machines are impossible. — Lord Kelvin, President of the British Royal Society, mathematical physicist and engineer.
1909: That the automobile has practically reached the limit of its development is suggested by the fact that during the past year no improvements of a radical nature have been introduced. — ”Scientific American”, Jan. 2, 1909.
1923: There is no likelihood man can ever tap the power of the atom. — Robert Millikan, winner of the Nobel Prize for Physics.
1926: While theoretically and technically television may be feasible, commercially and financially it is an impossibility, a development of which we need waste little time dreaming. — Lee De Forest, U.S. inventor and radio pioneer commenting on the future of television.
1936: A rocket will never be able to leave the Earth’s atmosphere. — The New York Times.
1943: I think there is a world market for maybe five computers. — Thomas Watson, Chairman of IBM.
1961: There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television or radio service inside the United States. — T.A.M. Craven, U.S. Federal Communications Commissioner.
Predictive Power: Then and Now
How could so many experts in their field be so sure and yet so wrong? To be fair, many of the sources quoted above were speaking in terms of what was likely in their present (or, at least, their near-term future.) And all of them pre-date the powerful new possibilities for predictive insight available to today’s businesses.
In a recent benchmark study by Ventana Research, 86% of those surveyed assert that predictive analytics will have a major positive impact on their business, and 68% of the participants currently using predictive analytics report they have already realized a competitive advantage.
So How Are Companies Using Predictive Analytics?
Early adopters of predictive analytics have taken a “customer first” approach to predictive analytics by focusing on new ways to generate revenue and increase customer satisfaction.
43% of the organizations who participated in the study are using the results of predictive analytics to make product recommendations and offers designed to up-sell or cross-sell their current customers. By combining customer information with marketing and sales data, they are able to tap into new trends and opportunities as they emerge.
What’s more, the 40% of companies who are now evaluating or planning to incorporate social media data in their analyses are moving even closer to the goal of real-time insight into customer behavior.
Top 5 Things Predictive Analytics Can Do For You
Predictive analytics can give your organization increased insight across mission-critical areas of the business, from marketing and customer service to supply chain and human resources.
Think of it as x-ray vision giving you the power to see through walls and grasp the bigger picture. Using predictive analytics you can:
1.) Instantly predict market trends and customer needs
2.) Create customized offers for each segment and channel
3.) Predict how market-price volatility will impact your production plans
4.) Foresee changes in demand and supply across your entire supply chain
5.) Proactively manage your workforce
Are You still Steering Through The Rear-View Mirror?
The classic approach to business intelligence has been limited by both the available data and analytical tools. While reports were useful for understanding past business performance and drill-down analyses might unveil important correlations, they remained focused on what was visible in the rear-view mirror.
Predictive modeling takes a forward-looking perspective, giving you a view into what might be ahead. Combine that future perspective with real-time analytical capabilities and now you can move out of the past and into the future with the ability to predict and take action ahead of the curve.
This infographic brings the power of predictive analytics into sharp focus:
- To learn more, download the complementary executive summary of the Ventana Research benchmark study (registration required.)
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