Covering the essentials of business intelligence, explore the features & functions for an overview.
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Prescriptive Analytics is the final stage of Business Analytics (BA) that takes insights from descriptive and predictive analytics to identify the best course action for a given situation.
Descriptive analytics give a picture of the past, and predictive analytics tell what might occur in the future, but prescriptive analytics consider the known parameters and come up with a best possible prescription.
Prescriptive Analytics can recommend if the organization should make appropriate decisions or not with the intention to mitigate any future risk that might become imposed upon the organization. This approach explains the significance of every decision and provides a lead into any possible future opportunities that may exist in the situations which are currently available.
Prescriptive analytics can provide decidedly better decision options with improved accuracy of predictions by processing the most recently available data.
For example, using prescriptive analytics, many organizations identify the trends in customer buying habits and make necessary suggestions of the related items based on the past buying patterns of the customer. Also, organizations stock up their inventories based on the customer’s buying patterns.
Prescriptive analytics uses specific techniques including simulation, optimization, game theory and other decision-analysis methods.
Prescriptive analytics is still in the initial stages; but due to its complexity and requirement of large data sets, it is currently being used only in companies using Big Data. In other words, the future of Big Data lies in prescriptive analytics.