10 Ways Predictive Analytics Improves Innovation - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Data Management // Big Data Analytics
12:06 PM
Lisa Morgan
Lisa Morgan
Connect Directly

10 Ways Predictive Analytics Improves Innovation

From drug discovery to price optimization, across virtually every industry, more companies are using predictive analytics to increase revenue, reduce costs, and modernize the way they do business. Here are some examples.
1 of 11

(Image: miradeshazer via Pixabay)

(Image: miradeshazer via Pixabay)

Predictive analytics is gaining momentum in virtually every industry. Using predictive analytics, businesses are able to approach opportunities, risks, business partners, and customers differently because they have foresight they lacked previously.

"Historical data can only show you so much," said Arvid Tchivzhel, director of revenue and pricing strategy at consulting firm Mather Economics. "If you're always looking at your historical revenue-to-date data, you're not really seeing where your future customers will be coming from and how much value they'll deliver to you in the long term."

Assuming there is a perfect storm of clean data, adequate data, and the expertise necessary to understand what the data is saying and apply that to a business problem, organizations are doing everything from increasing top-line revenue by a couple of percentage points to reimaging profitable customer relationships. Some are inventing entirely new business models.

Learn to integrate the cloud into legacy systems and new initiatives. Attend the Cloud Connect Track at Interop Las Vegas, May 2-6. Register now!


"When you're talking about corporate strategy, what types of new policies we're going to put in place, and what kinds of new projects we're going to pursue, predictive analytics can help you decide which ones will be impactful," said Ryan McClurkin, chief of business analytics and marketing at handcrafted photo product company PhotoBarn. "Predictive analytics gives you much more insight into what's driving the revenue engine of your business than just about any other tool."

For example, airlines are using predictive analytics to improve profitability and provide customers with better traveling experiences. Using their own data and third-party data, they are able to understand seat-assignment and legroom preferences, how often their customers fly, and how price sensitive they are, as well as what customers are doing at the airport.

Predictive analytics helps them understand "value" from the customer's point of view -- specifically, the mix of convenience and price that will most likely appeal to an individual, according to Lalit Dhingra, president, US, NIIT Technologies.

"The industry is moving from insight to foresight -- knowing what's happening to knowing what may happen or what will happen," said Dhingra. "Predictive analytics can make a good company great and a great company can excel even further."

Here are a few ways predictive analytics is transforming the way companies do business.


Lisa Morgan is a freelance writer who covers big data and BI for InformationWeek. She has contributed articles, reports, and other types of content to various publications and sites ranging from SD Times to the Economist Intelligent Unit. Frequent areas of coverage include ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
1 of 11
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Moderator
3/14/2016 | 12:01:29 PM
Re: Same dangers as always
Often when I talk to people about predictive analytics, they sometimes speak about it in terms of what will happen rather than what *may* happen or will likely happen given some level of uncertainty.  While it may be possible to predict some things with impressive accuracy, it is also possible to place too much faith in Yet Another Silver Bullet, irrespective of all the details that matter.  
User Rank: Ninja
3/14/2016 | 8:56:15 AM
Same dangers as always
I think predictive analytics makes a lot of sense. It has huge potential to not only help businesses perform better, but also offer up some really interesting insight into how we do things as a species and on an individual level.

That said, all data, whether it's used to analyse the past, present, or future, is only as useful as the one making the interpretation. We must be wary to rely too much on raw data, as it can be misleading if you look at it looking for a particular outcome.
User Rank: Apprentice
3/14/2016 | 6:17:55 AM
Predictive analytics for Industrial Internet of Things
This is a great article & it's only the beginning. One of the places where the greatest gains can be made with predictive analytics is in the industrial IoT space.

Imagine the savings if companies can proactively maintain factories, rather than waiting for a breakdown or replacing parts before it is necessary on a scheduled maintenance plan. This can be done by monitoring metrics like temperature, RPM, material consuption, output, etc., learning the normal behavior, and then receiving alerts about abnormal behavior. Of course this type of analysis can't be done manually - it requires machine learning to interpret the Big Data.

The company I work for - Anodot - does real time anomaly detection and analytics and has written about predictive analytics for "Factory 4.0" recently on their blog. 
Why 2021 May Turn Out to be a Great Year for Tech Startups
John Edwards, Technology Journalist & Author,  2/24/2021
How GIS Data Can Help Fix Vaccine Distribution
Jessica Davis, Senior Editor, Enterprise Apps,  2/17/2021
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Flash Poll