Predictive Analytics For Dummies, 2nd Edition

Chapter 8

Convincing Your Management to Adopt Predictive Analytics

IN THIS CHAPTER

Measuring the benefits of adopting predictive analytics

Optimizing operational decisions

Developing unambiguous success metrics

Creating a proposal to management

Predictive analytics should be on every company's radar. If it isn't in your company's toolkit, take a good look at the surrounding competitive landscape: Margins are thinner; customers are more demanding and selective; customers have more and more choices. Companies that thrive in this environment are those that adapt to these changes and innovate to get ahead of the competition. They're lean; they're agile; they have embraced predictive analytics.

For examples of the effective use of predictive analytics, consider the success of Amazon, Netflix, LinkedIn, and Facebook. Amazon and Netflix have been around for about two decades, publicly traded for roughly half that time; LinkedIn and Facebook have been around for about a decade, publicly traded for only a few years. Although these companies are relatively new in comparison to blue-chip giants like Walmart or IBM, they are some of the biggest companies in the world. In fact, Amazon and Facebook have both surpassed Walmart and IBM in market capitalization. One major reason: These companies have pioneered the use of data and predictive analytics to make business decisions.

The market has rewarded this new generation of companies with very high stock valuations — and equally high expectations. ...