Business Analytics is broken down into three distinct phases.
- Descriptive – What happened? This phase involves traditional BI tools to help organizations process and report on historical data. Trends are analyzed and decisions are made. The majority of management reporting uses this approach.
- Predictive – What will happen? This phase uses machine learning algorithms to build models from historical data and then uses those same models to predict a future outcome or its likelihood.
- Prescriptive – What action should be taken? This phase prescribes actions to achieve the best possible outcome based on the predictions made. Actions that lead to the highest chance of success are prescribed.
Prescriptive Analytics predicts and compares the likely outcomes of any number of actions, and then chooses the very best action to help advance an organization’s objectives.
Consider implications for the healthcare industry. Healthcare predictions are most useful when that knowledge prescribes clinical action for each predicted outcome.
Similar insights can help organizations improve decision making and have more control of business outcomes. Prescriptive analytics is an important next step on the path to insight-based actions and recommendations.