They also help forecast demand for inputs from the supply chain, operations and inventory. (Think basic arithmetic like sums, averages, percent changes.) Descriptive Analytics is used when you need to analyze and explain different aspects of your organization whereas Predictive Analytics is used when you need to know anything about the future and fill the information that you do not know. Prescriptive analytics, on the other hand, kicks it up a notch. When implemented correctly, they can have a large impact on how businesses make decisions, and on the company’s bottom line. "It's basically when we need to prescribe an action, so the business decision-maker can take this information and act." These analytics go beyond descriptive and predictive analytics by recommending one or more possible courses of action. It also provides easy-to-follow guidance on how to address the inconsistency, whether further investigation is needed or a clear-cut fix is defined. It also identifies potential cost-saving and growth opportunities within the value chain, making prescriptive analytics a win-win. That is why Zebra Ventures first invested in Profitect in 2014. © 2020 American Software, Inc. All rights reserved. Diagnostic analytics tells you why, but doesn’t provide any further actions. In a nutshell, these analytics are all about providing advice. Prescriptive analytics offers very pointed guidance on what you should do in any event and why, as well as what could happen if you don’t follow recommended actions – and why. Descriptive Analytics tells you what happened in the past. Share it in the Comments section below. It can also be applied to functional roles like Asset Protection. Prescriptive analytics use a combination of techniques and tools such as business rules, algorithms, machine learning and computational modelling procedures. Our customers consistently report sales lift, as well as margin and labor productivity improvement. Typical business uses include understanding how sales might close at the end of the year, predicting what items customers will purchase together, or forecasting inventory levels based upon a myriad of variables. Your Edge Blog Team: That’s interesting. Review Zebra’s Privacy Statement to learn more. Zebra recently announced that it has acquired Profitect, a leading provider of prescriptive analytics for the retail and consumer packaged goods (CPG) industries. Larger companies are successfully using prescriptive analytics to optimize production, scheduling and inventory in the supply chain to make sure they are delivering the right products at the right time and optimizing the customer experience. Prescriptive analytics is the next step of predictive analytics that adds the spice of manipulating the future. Predictive vs Descriptive vs Diagnostic Analytics Manu Jeevan 14/03/2018 There are three main categories when it comes to data analytics: predictive, diagnostic, and descriptive. The relatively new field of prescriptive analytics allows users to “prescribe” a number of different possible actions and guide them towards a solution. Use Descriptive Analytics when you need to understand at an aggregate level what is going on in your company, and when you want to summarize and describe different aspects of your business. Daniel brings more than 10 years of experience in sales, marketing, supply chain planning, and advanced analytics. Prescriptive analytics is also predictive in nature since it tries to estimate multiple futures based on your actions and advise on the outcomes before you actually make a decision. No one type of analytic is better than another, and in fact they co-exist with, and complement, each other. Predictive and prescriptive analytics are two forward-looking tools used by business leaders which overcome these limitations. Predictive analytics provides companies with actionable insights based on data. Ultimately this creates a better overall consumer experience. Guy: Prescriptive analytics also translates the data into a description, this way you eliminate the personal and political biases that affect the way you read a report. The vast majority of the statistics we use fall into this category. Predictive analytics offer a data-driven picture of where your organization is headed while leaving the responsibility for identifying potential solutions to you and your team. Tom: The best way to describe the differences between each analytical approach is to consider how and when the extracted business insights will be used to inform decisions or actions: For example, Profitect’s prescriptive analytics solution will mine a retailer’s data to find inconsistencies that could impact sales or margins and then automatically notify stakeholders of the potentially disruptive issue using a simple description. Except, with prescriptive analytics, you’re in a position to take proactive measures to mitigate the risk or maximize the opportunity. "Prescriptive analytics is a type of predictive analytics," Wu said. Your Edge Blog Team: Is that why Zebra decided to acquire Profitect? You know that Big Data might not be right for you, but the more specific and flexible actionable insights derived from operational data is. You have read studies describing how analytics separates winners from average performers. Guy: You’re right, prescriptive analytics goes beyond predictive analytics to give you the reason for those anticipated events and what to do about them so the outcome is optimized. However, luckily these analytic options can be categorized at a high level into three distinct types. It’s important to catch and weed out supply-chain inefficiencies and sources of waste in near-real time. Analytics is all about course correcting the future. And is prescriptive analytics the same thing as predictive analytics? He provides a unique blend of business and industry knowledge, leading successful efforts to integrate new technologies into effective supply chain solutions. Descriptive analysis or statistics does exactly what the name implies: they “describe”, or summarize, raw data and make it something that is interpretable by humans. Editor’s Note: Learn more about how Zebra’s combined Intelligent Edge Solutions, including the Zebra Savanna IoT platform and Profitect prescriptive analytics solutions, can benefit your business. Under a report-based system, identifying who should perform what task could take a data scientist days, by which time the insight may no longer be actionable. Can you provide an example? Predictive analytics has its roots in the ability to “predict” what might happen. Predictive vs. prescriptive analytics The difference between predictive and prescriptive analytics is made clear when you understand which business question each strives to answer. More recently, we have been seeking new ways to advance our Enterprise Asset Intelligence vision – to have every asset and worker on the edge visible, connected and optimally utilized. Your Edge Blog Team: So, in a way, prescriptive analytics is to the future what descriptive analytics is to the past as far as extracting the reason behind an outcome. It is crucial to remember that predictive analysis only forecasts the future and not actually predicts it with hundred percent accuracy. This helps identify any behavioral change which will point to a compliance or fraud issue created by the delivery company. Of diagnostic, predictive, descriptive, and prescriptive analytics, the latter is the most recent addition to … While Profitect’s solution can identify problems and suggest actions, a continuous feedback loop also identifies best practices that can be replicated across the enterprise. Use Predictive Analytics any time you need to know something about the future, or fill in the information that you do not have. Read This! Diagnostic Analytics helps you understand why something happened in the past. Knowing that business analytics can be categorically complex (even for data scientists), we’ve asked our in-house experts Tom Bianculli and Guy Yehiav to explain the benefits and use cases in the most simplistic way possible…. Predictive vs. Prescriptive Sales Analytics. Submit your comments, questions and topic ideas to blog@zebra.com. There are numerous possible applications in the manufacturing, warehousing, transportation and logistics space that we will explore in the coming months. Ask the Experts: How Can We Be Sure Temperature-Sensitive COVID-19 Vaccines Have Not Been Heat Damaged All the Way Through the Last Mile? Learn more about earning an Online Master of Business Administration from Ohio University. Huge ROIs can be enjoyed as evidenced by companies that have optimized their supply chain, lowered operating costs, increased revenues, or improved their customer service and product mix. In simplest terms, descriptive analytics is “what happened”, diagnostic analytics is “why did it happen”, predictive analytics is “what will happen” and prescriptive analytics is “what should I do”. To help Profitect scale their solutions and broaden the reach of prescriptive analytics to customers in other industries? While descriptive analytics is limited to past data, predictive analytics predicts future trends. Common examples of descriptive analytics are reports that provide historical insights regarding the company’s production, financials, operations, sales, finance, inventory and customers. This site uses cookies to provide an improved digital experience. But it doesn’t stop there. It suggests all favourable outcomes and, which courses of action needs to be taken to reach a particular outcome. Predictive analytics or prescriptive analytics alone are not enough for an effective business strategy. They combine historical data found in ERP, CRM, HR and POS systems to identify patterns in the data and apply statistical models and algorithms to capture relationships between various data sets. While this starts with accurate predictions of the future, without resultant actions steering the future toward company goals, knowing that future is academic. By continuing to use this site without changing your settings, you are agreeing to our use of cookies. Wish Your Grocery Store Checkout Lane Could Move Faster? Predictive and prescriptive analytics are co-dependent disciplines that take business intelligence to unprecedented levels. Final thoughts on predictive vs prescriptive analytics. Prescriptive Analytics: Advise on possible outcomes. Use Prescriptive Analytics any time you need to provide users with advice on what action to take. While data scientists use both techniques in partnership with historical data and market trends to enhance business processes, the two are used to answer different questions. Descriptive statistics are useful to show things like total stock in inventory, average dollars spent per customer and year-over-year change in sales. You know all about sales analytics and how it can benefit your business. Your Edge Blog Team: It’s not enough to have a predictive analytics solution then? Barcode Scanners and Data Capture Resources. Looking at all the analytic options can be a daunting task. Prescriptive analytics, goes further and suggest actions to benefit from the prediction and also provide decision options to benefit from the predictions and its implications. Prescriptive analytics, as the name suggests, prescribes a specific course of action based on a descriptive, diagnostic, or predictive analysis, though typically the latter. Have a question for Tom or Guy about analytics? Let’s see what are the key differences between predictive and prescriptive analytics: Predictive analytics aim to predict what is going to happen and aren’t valuable unless they are actionable. Want to learn more about descriptive, predictive and prescriptive analytics? Essentially they predict multiple futures and allow companies to assess a number of possible outcomes based upon their actions. Using a combination of historical data (descriptive analytics), rules and a knowledge of the business, they more accurately predict the future, and, in the case of prescriptive analytics, guide leaders to the best overall decisions. Combining the real-time data that Zebra solutions capture with Profitect's access to operational data, machine learning and analytics, we can now work with our partners and customers to empower front-line workers across all verticals, not just retail, with the focused insights they need to make smarter decisions and take faster, more effective actions. Category: AnalyticsBlog Year: 2020Asset Category: Analytics, Digital Supply Chain. Find more technical discussions on our Developer Portal blog. Predictive analytics allows organizations to become proactive, forward looking, anticipating outcomes and behaviors based upon the data and not on a hunch or assumptions. The promise of doing it right and becoming a data-driven organization is great. With the flood of data available to businesses regarding their supply chain these days, companies are turning to analytics solutions to extract meaning from the huge volumes of data to help improve decision making. Imagine the impact that these analytical tools could make on combating counterfeit drug distribution. Tom: Exactly. This is because the foundation of predictive analytics is based on probabilities. It basically uses simulation and optimization to ask “What should a business do?” Guy: Retailers have been using prescriptive analytics for several years to capitalize on the data they capture in-store and online. Profitect uses machine learning to cluster stores and compare behavioral consumptions and shipments. What Are Prescriptive Analytics? We want to hear from you! At their best, prescriptive analytics predicts not only what will happen, but also why it will happen, providing recommendations regarding actions that will take advantage of the predictions. 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