I highly recommend that you all read the new TDWI (The Data Warehousing Institute) BEST PRACTICES REPORT, published on December 20th by Fern Halper: Predictive Analytics for Business Advantage.
You can download the report for free from the TDWI website here.
Key takeaways from the report are:
Predictive analytics is a game changer
“To compete effectively in an era in which advantages are ephemeral, companies need to move beyond historical, rear-view understandings of business performance and customer behavior and become more proactive.”
Predictive analytics is going mainstream
“Although it has been around for decades, predictive analytics is a technology whose time has finally come. A variety of market forces have joined to make this possible, including an increase in computing power, a better understanding of the value of the technology, the rise of certain economic forces, and the advent of big data.”
Marketing users are becoming most important
“TDWI Research finds a shift occurring in the predictive analytics user base. No longer is predictive analytics the realm of statisticians and mathematicians. There is a definite trend toward business analysts and other business users making use of this technology. Marketing and sales are big current users of predictive analytics and market analysts are making use of the technology.”
The top use cases of predictive analytics are all marketing related
Most used direct marketing (58%)
Cross-sell/upsell/propensity to spend (55%)
Retention analysis (55%)
Operationalizing predictive analytics means giving everybody access
Operationalizing any use case for predictive analytics, like cross-sell or upsell predictions, means giving more people in the organization access to the data and analysis. Specifically you need to give customer-facing personnel, like marketers and call center agents access to the outcomes of predictive analytics in order to drive business outcomes.
KEY TAKEAWAY: knowing the business trumps knowing math
When asked: “what skills are necessary to perform predictive analytics”, “knowledge of the business” and “critical thinking” ranked first and “training on the software” and “a degree in math” ranked last. At AgilOne we strongly agree that predictive analytics should be the domain of those who know the business best and for predictive marketing analytics these are marketers, not statisticians. This is why we allow marketers to outsource all predictive modeling to the cloud, so marketers can focus on how to use the data and predictions (not how to create it).