Understand Prescriptive Analytics in 20 Minutes

Summary

In this webinar, Laura Van Dijken and John DeLong discuss the importance of prescriptive analytics, its value to businesses, and practical applications. John highlights the evolution from descriptive to prescriptive analytics, emphasizing the shift from data interpretation to actionable insights. He showcases how companies are leveraging optimization and predictive modeling to improve decision-making, increase efficiency, and drive business growth. The presentation also covers the increasing adoption of prescriptive analytics, its potential in various industries, and the challenges businesses face in becoming more agile and data-driven.

Takeaways

• 📚 Prescriptive analytics is a field that has gained significant interest and value for companies, with a forecasted growth from 10% to 35% by 2020.
• 🔍 The field of analytics has evolved from standard reporting to more advanced forms such as predictive modeling and optimization.
• 📈 Optimization is distinguished from other analytics by focusing on what could be the best outcome rather than just interpreting data.
• 🚀 Companies are moving towards using prescriptive analytics to gain a competitive edge, improve margins, and enhance customer satisfaction.
• 📈 Google Trends data shows an increasing interest in analytics, including prescriptive analytics, over time.
• 📊 The transition from descriptive to prescriptive analytics often starts with simple tools like Excel, but grows to more complex and integrated solutions.
• 💡 Prescriptive analytics allows for modeling the business as it is, providing flexibility and the ability to innovate beyond predefined processes.
• 🔄 Companies using prescriptive analytics can make decisions more frequently and with greater effectiveness, leading to improved performance.
• 📈 The application of prescriptive analytics is widespread, but notable in industries like sales, network optimization, oil and gas, and retail.
• 💼 Organizations are seeking agility and the ability to quickly test and implement new strategies, which prescriptive analytics can facilitate.
• 🔗 As companies adopt prescriptive analytics, they may need to reevaluate traditional business processes and roles to fully realize its benefits.

Q & A

What is the main focus of the webinar?

The main focus of the webinar is to provide an overview of prescriptive analytics, explain why companies find it valuable, and share examples of its application.

Who is the presenter of the webinar?

The presenter of the webinar is John DeLong, who has over two decades of experience in the prescriptive analytics space and works closely with research organizations like Gartner.

What is the significance of Tom Davenport's book 'Competing on Analytics' mentioned in the script?

Tom Davenport's book 'Competing on Analytics' is significant because it was one of the first books to connect the analytics side of business with the business side, emphasizing the importance of analytics leverage.

What does the analytics ladder mentioned in the script represent?

The analytics ladder represents the degree of intelligence and data utilization, starting from the basis of data to more advanced analytics like statistical analysis, forecasting, optimization, and ultimately prescriptive analytics.

How does optimization differ from the other forms of analytics mentioned in the script?

Optimization differs from other forms of analytics in that it focuses on recommending the best possible outcomes by modeling the business, rather than just analyzing data or predicting trends.

What is the forecasted growth of organizations using prescriptive analytics according to Gartner?

Gartner forecasts that the percentage of organizations using prescriptive analytics will grow from about 10% to 35% by 2020.

What does the script suggest as the starting point for businesses interested in prescriptive analytics?

The script suggests that businesses often start with tools like Excel for analytics, but as they understand the value, they look for solutions that can be configured to their business needs.

What is the importance of modeling in prescriptive analytics as discussed in the script?

Modeling is important in prescriptive analytics because it allows businesses to model their operations accurately, providing decision support tools that give answers based on the business model rather than general assumptions.

What are some common applications of prescriptive analytics mentioned in the script?

Some common applications of prescriptive analytics mentioned in the script include sales and operations planning, network optimization, and scheduling in industries like oil, gas, and chemicals.

How does the script describe the transition from traditional business planning to using prescriptive analytics?

The script describes the transition as moving from traditional tools like Excel to more advanced, configurable solutions, and eventually to embedding prescriptive analytics technologies that are not limited by specific business processes.

What challenges does the script identify with using spreadsheets for complex business planning?

The script identifies that spreadsheets become inadequate for complex situations and recurring planning issues, as they are limited in scalability, transferability, and the number of users that can interact with them.