There is enormous amount of data that is being generated per second. By 2020 the new information generated will be approximately 1.7 megabytes per second for every human being. Large amount of valuable insights could be derived from the huge volume of data to help businesses take various decisions. Technology has become an enabler for this decision making process with data being an indispensable resource that no company can ignore. However, choosing the right algorithm to derive the best insights become a time consuming process.
Currently there are four types of analytics medium that businesses follow: Descriptive, Diagnostic, Predictive and Prescriptive Analytics.
The descriptive analytics includes looking into the past data to derive insights. They use data aggregation techniques to determine the pattern in the data and thus answering the question “What had happened?”. This includes extracting the data from the CRM’s, ERP, Billing Files using the data extraction tools, apply analytics and derive the insights.
The diagnostic analytics includes data mining strategy to determine the cause of a problem. It uses usability testing to determine where the user struggle through the process.
The predictive analytics focuses on what could happen based on the insights from the data. By using the forecasting methodologies, the next best fit could be identified. Companies like Amazon, Flipkart etc use this to recommend products to users.
The prescriptive analytics takes multiple options for an answer. It then chooses which action could be a best fit.This will have a larger impact on the business as it helps in taking the right decisions.
AI is advancing with prescriptive analytics. AI which includes Machine Learning, helps in learning through the process and the deep learning provides the complex capabilities in understanding the process. AI could help in finding out the best solution by evaluating the past data and deriving the patterns. AI put forth with the prescriptive analytics will change decision making in businesses.