With the growing popularity of predictive analytics, many organizations are seeking to partner with a predictive analytics company.
But unlike other types of professional services, predictive analytics is often misunderstood due to a lack of familiarity with what the process involves. This leads to misconceptions about what to expect from a potential vendor.
As an organization that has been at the forefront of popularizing predictive analytics, Buxton has seen our share of questions from companies seeking to integrate analytics into their decision-making processes. If you are thinking about partnering with a predictive analytics company, here’s what you can expect.
Be Ready to Provide Your Data
Many companies are excited about the prospect of using analytics to make business decisions, but overlook one important factor.
Analytics providers need your data in order to work their magic.
Step one for any data modeling process is always to understand the data that will be used in the project. The more granular and complete your data set is, the more interesting insights that the vendor will be able to provide by marrying your data sets with their internal data sets.
For companies that lack customer data, there is good news. Advances in technology have yielded new types of data sets that can be used to proxy your customer data. Your predictive analytics vendor may recommend using one or more of the alternate data sources if these data sets will be helpful in providing the answers that you seek.
Develop Predictive Analytics Models
While the word analytics conjures up images of smart technology spitting out answers to complex questions, there is a human element involved in making this possible.
In order to develop a predictive model, which is the tool used to provide “automatic” answers, a human analyst starts by understanding your company and the questions you would like to answer using the model. This helps the analyst to identify relevant data features and to select data variables that are likely to be “causal” (meaning they have a cause-effect relationship) to the outcome.
The analyst then tests each variable in combination with the others, using various statistical methods, to determine the combination and weighting of variables that yields the greatest predictive power.
Once the predictive model is developed, it is tested to see how well it holds up in real life before being automated and deployed into a user-friendly tool. The output depends on what the model is supposed to forecast, whether revenue, patient visits, or another performance metric.
Understand and Apply the Results
A good predictive analytics company won’t simply hand you the results of your analysis, wish you luck, and then disappear. Instead, the company will help you to understand the analysis and apply it to your business on an ongoing basis.
Throughout the relationship, your vendor will periodically evaluate your predictive model to ensure it is still performing as expected. If your business has undergone changes that affect the model’s performance, the company may recommend recalibrating or even rebuilding the model.
The Bottom Line
Having the right expectations regarding analytics is an asset when evaluating predictive analytics companies. Buxton offers a variety of analytic solutions designed to meet different needs. Explore our products today.