Visual Analytics - An Interaction of Sight and Thought - JMP

Predictive analysis is one of these
challenges.
U.S. Dollars
(thousands)
4,000
Sales Revenues
Sales Revenues
3,500
3,000
2,500
2,000
1,500
1,000
500
0
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2012
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013
One of the analytical challenges that requires a high degree of statistical training is its
use for predicting what might happen in the future. Let’s clarify the meaning of
predictive analytics. Like many terms that get tossed around by software vendors and
even by thought leaders in the field of business intelligence, predictive analytics seems
to mean whatever’s convenient at the moment. It might be useful for marketing
purposes to keep definitions loose and adaptable to the occasion, but it doesn’t help us
at all. We’ll start by turning to everyone’s favorite dictionary these days: Wikipedia.
Predictive analytics encompass a variety of techniques from statistics and data
mining that analyze current and historical data to make predictions about future
events. Such predictions rarely take the form of absolute statements, and are more
likely to be expressed as values that correspond to the odds of a particular event or
behavior taking place in the future.
In business, predictive models exploit patterns found in historical and transactional
data to identify risks and opportunities. Models capture relationships among many
factors to allow assessment of risk or potential associated with a particular set of
conditions, guiding decision making for candidate transactions.
Wikipedia entry for “predictive analytics” as of December 15, 2008.