Predictive Analytics - An overview

Vijaykumar Adamapure
MachinePulse.
Agenda

Introduction to Big Data.

What is Analytics?

Overview of Predictive Analytics Techniques.

Business Applications of Predictive Analytics.

Predictive Analytics Tools in Market.

Gartner Hype Cycle
Things That Happen On Internet Every Sixty Seconds
Things That Happen Every Sixty Seconds
The 5 V's of Big Data
Big data is high-volume, high-velocity and high-variety information assets
that demand cost-effective, innovative forms of information processing for
enhanced insight and decision making.
Survey on Big Data Adoption Stages
What is Analytics?
Data Analysis: OSEMN Process
OSEMN is an acronym that rhymes with awesome

Obtain Data

Scrub Data

Explore Data

Model Data

iNterpret Results
What is Predictive Analytics?

Predictive analytics is the practice of extracting insights from the existing

data set with the help data mining, statistical modeling and machine
learning techniques and using it to predict unobserved/unknown events.

Identifying cause-effect relationships across the variables from the

historical data.

Discovering hidden insights and patterns with the help of data mining
techniques.

Apply observed patterns to unknowns in the Past, Present or Future.

Predictive Analytics Process Cycle
Common Predictive Analytics Methods

Regression:
Predicting output variable using its cause-effect relationship with
input variables. OLS Regression, GLM, Random forests, ANN etc.

Classification:
Predicting the item class. Decision Tree, Logistic Regression, ANN,
SVM, Nave Bayes classifier etc.

Time Series Forecasting:

Predicting future time events given past history. AR, MA, ARIMA,
Triple Exponential Smoothing, Holt-Winters etc.
Common Predictive Analytics Methods (Contd.)

Association rule mining:

Mining items occurring together. Apriori Algorithm.

Clustering:
Finding natural groups or clusters in the data. K-means, Hierarchical,
Spectral, Density based EM algorithm Clustering etc.

Text mining:
Model and structure the information content of textual sources.
Sentiment Analysis, NLP
Evaluating Predictive Models
Need to check predictive models out of sample performance.
Model Assessment: Hit Rate, Gini Coefficient, K-S Chart, Confusion
Matrix, ROC Curve, Lift Chart, Gain Chart etc.
Business Applications of Predictive Analytics
Multi-channel Renewable
Smarter Healthcare sales Finance Energy

Factory Failures Traffic Control Telecom Spam Filters

Manufacturing Trading Analytics Fraud and Risk Retail: Churn

Business Applications (Contd.)

Supply Chain:
Simulate and optimize supply chain flows to reduce inventory.

Customer Profiling:
Identify high valued customers and retain their loyalty.

Pricing:
Identify the optimal price which will increase net profit.

Human Resources:
Best Employees selection for particular tasks at optimal
compensation. Employee churn retention.
Business Applications (Contd.)

Renewable Energy:
Energy forecasting, electricity price forecasting, Predictive
Maintenance, Operational cost minimization.

Financial Services:
Approval of credit cards/ loan applications based on credit scoring
models, Options pricing, Risk analysis etc.

E-Commerce:
Identify cross-sell and upsell opportunities, increase transactions
size, maximize campaign's response based CRM data.
Business Applications (Contd.)
Product Quality Control:
Detect product quality issues in advance and prevent them.

Revenue Performance:
Identify key drivers of revenue generation and optimization of
revenue.

Fraud and Crime Detection:

Detect fraud , criminal activity, insurance claims, tax evasion and
credit card frauds.

HealthCare:
Identify prevalence of particular disease to a patient based health
conditions.
Predictive Analytics Tools in Market
Thank you!