Looking ahead: Predictive analytics is taking off
Many forecasts are easy to make. One example is that predictive analytics will play an increasingly important role for businesses. But that won’t happen all by itself, as there are still some obstacles to overcome. A recent study shows what these obstacles are, and how companies in the DACH region view the role of predictive analytics now and in the future.
By and large, predictive analytics isn’t really widely appreciated yet at companies, but its importance will grow significantly. That sums up two results of the study “Predictive Analytics 2018,” for which 390 decision-makers from the DACH region were asked about their plans and projects within the field of predictive analytics. Currently, only 47% of the participants rate the importance of predictive analytics as very high or high, and about a third rate the relevance of the topic as low or very low. However, two thirds of companies expect that predictive analytics will become important or very important for them within the next three years. Only 14% of companies rate the future importance as low or very low.
Large companies in particular see the value of predictive analytics: 53% of companies with more than 1,000 employees currently consider predictive analytics to be of great or very great importance, and 68% believe the subject will be of great or very great importance in the next few years. Among small companies with up to 99 employees, that view was shared by only 27% (currently) or 54% (in the next three years).
Clear planning ensures success
More than a third of the companies that took part have already implemented analytics projects, half of which were in the area of predictive analytics. These projects were implemented primarily with the aim of making better business decisions based of the results. Additional objectives include improving processes and products or services, as well as increasing sales and lowering costs. The majority of the companies are satisfied or very satisfied with their previous predictive analytics measures and the cost-benefit ratio. However, a clear business case with a defined project objective is required for this. It is worth noting that the current most important analytics process is descriptive analytics.
In the next twelve months, 87% of the participants in the study will invest more heavily in predictive analytics. The focus is on two areas: firstly on IT infrastructure (buying software and hardware, implementing analytics, data preparation and migration), and secondly on developing and promoting in-house skills. This includes investing in the development of the company’s own organizational unit with its own budget, creating new jobs, or continuing the training of existing staff. At the moment, however, the vast majority of companies bring external expertise from service partners on board for analytics projects, especially for strategic and technical consulting.
Obstacles to predictive analytics
Companies that want to successfully implement predictive analytics still need to overcome some obstacles. The greatest challenges are a lack of resources in the area of expertise or in IT, the complexity of the analytics solutions, insufficient analytical skills within companies, and poor data quality.
Additional barriers include the high cost of implementation for analytics solutions and for the training of employees as well as data protection and data security. Furthermore, 15% of the participants also mentioned a lack of support from the management.
There is still some way to go, but DACH region companies – especially the large ones – are on the right track with predictive analytics. Informed business decisions, optimized processes and higher profits are on the horizon.
The full study “Predictive Analytics 2018” is available here.
Author: Editorial team Future. Customer.
Image: © Andrey Popov – AdobeStock