How companies use real-time Predictive Analytics data to plan for the future.
Fortune magazine reports that in a tough global economy, sloppy decision making and “going with your gut” can get you punished–swiftly. That’s why leading companies are increasingly turning to a new management discipline called predictive analytics to compete and thrive. Rather than relying on intuition when pricing products, maintaining inventory or hiring talent, managers are using data, analysis and systematic reasoning to improve efficiency, reduce risk and increase profits.
In simple terms analytics means using quantitative methods to derive insights from data, and then drawing on those insights to shape business decisions and, ultimately, improve business performance. Thus predictive analytics is emerging as a game-changer. Instead of looking backward to analyze “what happened?” predictive analytics help executives answer “What’s next?” and “What should we do about it?”
Accenture research shows that high-performance businesses have a much more developed analytical orientation than other organizations. They are five times more likely than their low-performing competitors to view analytical capabilities as core to the business. Our research shows that there are big rewards for organizations that embrace analytics decision making.
Some of the most famous examples of analytics in action come from the world of professional sports, where “quants” increasingly make the decisions about what players are really worth. Consider these examples from the business world:
Best Buy was able to determine through analysis of member data that 7% of its customers were responsible for 43% of its sales. The company then segmented its customers into several archetypes and redesigned stores and the in-store experience to reflect the buying habits of particular customer groups.
Olive Garden uses data to forecast staffing needs and food preparation requirements down to individual menu items and ingredients. The restaurant chain has been able to manage its staff much more efficiently and has cut food waste significantly.