Predictive analytics – the process of determining patterns from existing data sets to predict future outcomes – is an effective way to create a competitive advantage. From the “shift” in major league baseball where a team bases the location of their fielders on the hitter’s tendencies to NFL stadiums mining data to sell more concessions, merchandise and tickets, the professional sports industry has become an early adopter of analytics.
Businesses should take a page out of this playbook to achieve their own success. As technology continues to advance, organizations that learn to harness their data to predict future trends or risks will have a competitive advantage.
Begin with the end in mind
New initiatives involve many players and moving parts. Predictive analytics is no exception. Think about the end goals when developing your strategy, and don’t be afraid to start small. Consider what your stakeholders want to accomplish. Do they want to increase sales? Detect fraud? Cut costs? Demonstrating a return on investment for one or two areas of invested interest helps win them as advocates. With stakeholders as fans, your program has a better opportunity to expand.
Set realistic objectives
From your end goals you’ll need to plan how you’ll achieve them. Identify the data available, where it’s located and who has access. Use this data inventory to set your objectives. This inventory differs from organization to organization. By considering what is possible for you specifically, you’ll create objectives you can realistically achieve and manage expectations along the way.
Manage your investment
Managing your investment is important, especially when you’re getting started. Assigning a specific cost center brings visibility to associated cost. Meeting with your analytics team frequently keeps your program on track. Are you effectively using resources? Do you have the appropriate tools? What’s your feedback? Even with tenure, analytics programs should be re-evaluated during annual planning at a minimum.
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Plan for potential roadblocks
Access to data creates inevitable risks. Inappropriate queries expose you to a potential security incident or breach. Include your organization’s information security professionals in your analytics program from day one. They can help you employ strong security controls around accounts with critical or confidential data, especially non-public information. Determining data validity is key to demonstrate your information is complete and accurate. Periodically review your queries and use a change control process. If you’re pulling from a data warehouse, conduct an audit to make sure data wasn’t altered when it was offloaded from production.
Analytics for the future
The need to collect and understand data isn’t going away any time soon. Organizations that play a little moneyball can beat out their competition. Implementing a predictive analytics program translates the data you already know into insights that help you get to market first or quickly act on threats. Whatever your play, capitalizing on predictive analytics is a win.