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DONE RIGHT,
PREDICTIVE
ANALYTICS POINTS
PATH TO BETTER
BUSINESS FUTURE
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 DONE RIGHT, PREDICTIVE ANALYTICS POINTS PATH TO BETTER BUSINESS FUTURE

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Done Right,
Predictive Analytics
Points Path to Better

P
Business Future

redictive analytics tools let organizations

look ahead in an effort to improve business
strategies and marketing programs. But
there has to be a purpose to the analytics
efforts, and a solid plan behind them.

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 DONE RIGHT, PREDICTIVE ANALYTICS POINTS PATH TO BETTER BUSINESS FUTURE

DONE RIGHT, PREDICTIVE ANALYTICS POINTS PATH TO

BETTER BUSINESS FUTURE
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From recommending additional purchases based on the items that customers
Done Right, place in online shopping carts to pinpointing hospital patients who have
Predictive Analytics
Points Path to Better a greater risk of readmission, the use of predictive analytics techniques is
Business Future
enabling organizations to tap their collections of data to predict future business
outcomes—if the process is managed properly.
Predictive analytics has become an increasingly hot topic in analytics
circles as more people realize that predictive modeling is “the big way to get big
value out of data,” said Mike Gualtieri, an analyst at Forrester Research Inc. As
a result, predictive analytics deployments are gaining momentum, according to
Gualtieri, who said that he has seen an increase in adoption levels from about
20% in 2012 to “the mid- to high-30% range” now.
That’s still relatively low—which creates even bigger potential business
benefits for organizations that have invested in predictive analytics tools.
If a company’s competitors aren’t doing predictive analytics, it has “a great
opportunity to get ahead,” Gualtieri said.

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Predictive analytics projects can also provide those benefits across various
industries, said Eric King, president and founder of The Modeling Agency
LLC, an analytics consulting and training services firm based in Pittsburgh.
“Everyone is overwhelmed with data and starving for information,” King noted.
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But that doesn’t mean it’s just a matter of rolling out the technology and
Done Right, letting analytics teams play around with data. When predictive analytics
Predictive Analytics
Points Path to Better is done well, the business benefits can be substantial—but there are “some
Business Future
mainly strategic pitfalls” to watch out for, King said. “Many companies are
doing analytics to do analytics, and they aren’t pursuing analytics that are
measurable, purposeful, accountable and understandable by leadership.”

DATA SCIENTISTS DON’T HAVE ALL THE ANSWERS

One common mistake is putting too much emphasis on the role of data scientists.
“Businesses think the data scientists have to understand the business,”
Gualtieri said. With that in mind, they end up looking for experienced data
analysts who have all the required technical skills and also understand their
business practices, a combination that he warned can be nearly impossible to
find. “That’s why they say, ‘A data scientist is a unicorn.’ But it doesn’t have to
work that way.”

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Instead, he recommended, business managers should be the ones who

walk through customer experience management operations or other business
processes and identify the kinds of behaviors and trends they’d like to predict,
“then go to the data scientists and ask if they can predict them.”
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King agreed that organizations often give data scientists too much
Done Right, responsibility and leeway in analytics applications.
Predictive Analytics
Points Path to Better “They’re really not analytics leaders in a lot of cases,” he said, adding that
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many data scientists aren’t very effective at interviewing people from the
business side about their analytics needs or defining project plans. Echoing
Gualtieri, King said a variety of other people, from the business and IT, should
also play roles in predictive analytics initiatives. “When you have the right
balance with your team, you’ll end up with a purposeful and thriving analytics
process that will produce results.”

PLAN AHEAD TO GET AHEAD

Companies looking to take advantage of predictive analytics techniques and
tools also shouldn’t just jump in without a plan.
“You can’t approach predictive analytics like you do a lot of other IT
projects,” King said. It’s crucial, he advised, to think strategically about an

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implementation upfront, plotting out a formal process that starts with a

comprehensive assessment of analytics needs and internal resources and
skills. “That’s where we’re seeing not only a greater adoption of predictive
analytics, but far greater results,” he said.
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In addition, companies need to understand the data they have at their
Done Right, disposal and make it easily accessible for analysis, which is “no small task,”
Predictive Analytics
Points Path to Better according to Gualtieri. Without an effective data management strategy,
Business Future
analytics efforts can grind to a halt: “Data scientists consistently report that
a large percentage of their time is spent in the data preparation stage,” he
said. “If they can’t effectively get that data together or it takes too much time,
opportunity is wasted.”
Another mistake that some companies make is turning to inexperienced
workers to get the job done, said Karl Rexer, president of consultancy Rexer
Analytics in Winchester, Mass.
“Predictive analytics requires knowledge of statistics, sample sizes,
regression and other sorts of analytics tools and techniques that isn’t commonly
found inside the current staffs that businesses have,” he said. If hiring
experienced workers isn’t an option, he suggested outsourcing initial pilot
programs to external experts who can help produce some early successes while

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also working to transfer the needed skills to existing staffers.

Once those skills are in place and projects are under way, Rexer said a
key to getting good analytics results is focusing on one business initiative at a
time—for example, customer retention or getting online shoppers to add more
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items to their carts. In some cases, companies think “they can take all the data,
Done Right, throw it in [predictive models] and magically insights are going to come out,”
Predictive Analytics
Points Path to Better he said. “Predictive analytics can be very helpful, but it’s not magic. You need
Business Future
to be tightly focused.”

CORLYN VOORHEES is working as an editorial assistant for SearchBusinessAnalytics and other TechTarget
websites through Northeastern University’s co-op program.

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