It’s hard to miss the constant conversations surrounding the prevalence and importance of big data. We’re particularly interested in unique applications of data to improve the way people and businesses work. Predictive analytics are somewhat akin to a crystal ball, with savvy users tracking past and present behaviors to identify and strategize around potential future outcomes. These stories highlight the steady increase of predictive analytics with fascinating business implications.
Prediction: Predictive Analytics to Impact Every Industry
We’re about to see a noticeable spike in real-world applications of predictive analytics, according to IT Pro Portal. Data scientists are in increasingly higher demand as organizations search for opportunities to improve efficiency and business results using the massive amounts of information they are storing. IT Pro Portal highlights use cases across the shipping, manufacturing, financial and healthcare spaces. By analyzing patterns and applying available knowledge to unique situations, predictive systems can identify inefficient shipping routes, malfunctioning manufacturing equipment, signs of insider trading or a patient in need of critical care, and all in fraction of the time. This story identifies just a few of the fields that can benefit from predictive platforms.
Improving Venture Capital Investments
In a piece on Fortune, venture capitalist William Hambrecht shares that just one in ten new venture-backed businesses becomes a big success. His firm, WR Hambrecht Ventures, has started using predictive analytics to improve those odds. The venture capitalist works with Growth Science, a think tank that tests investment candidates against a predictive engine to determine what chance a business model or technology has of success. Its engine is somewhat similar to other firms’ manual attempts at analyzing new businesses’ chances of success, which have been accurate about half the time. Thus far, Growth Science has been accurate almost seventy percent of the time. Venture capital funds typically take 10-15 years to return a profit and Hambrecht has been employing this method for the past eight years, which means we’re close to seeing if an analytical approach really pays off.
Properly Pricing Fine Wines
Data analysis and a glass of wine may not be the best pairing, but one researcher has applied his analytical expertise to the fine wine market. Dr. Tristan Fletcher, an academic at University College London with a background in artificial intelligence and hedge fund trading, embarked on a research project meant to gain insight into the behavior of the unpredictable fine wine market, according to TechCrunch. Fletcher used some cutting-edge machine learning approaches — Gaussian process regression and multi-task feature learning — to predict the likelihood of a particular wine gaining or losing value. In some cases the research was even able to accurately predict next-day prices for wine based on prior sales. While the research was labor intensive and the results are hard to apply to other industries, it proves that even niche industries can benefit from predictive analytics.
Helping Human Resources
Human resources departments are now catching up with marketing teams in terms of data and analytics adoption. Effective use of analytics can predict which candidates will be the best fit for a role or when an employee might resign. The key to success for HR analytics, however, is the quality of the data collected, according to Smart Data Collective. By analyzing everything from social media to performance reviews, with an emphasis on qualitative instead of quantitative data, HR professionals can come to identify valuable recruitment leads and unexpected performance trends. Proper use of predictive analytics ultimately enables them to draw more intelligent conclusions about their current and potential employees.