How predictive analytics can deliver strategic benefits
The technology can help companies quickly identify and respond to new opportunities
Computerworld - PHOENIX -- Enterprises can gain significant long-term benefits by applying predictive analytics to their operational and historical data, said analysts and IT managers at Computerworld's BI & Analytics Perspectives conference being held here this week.
Unlike traditional business intelligence practices, which are more backward-looking in nature, predictive analytics approaches are focused on helping companies glean actionable intelligence based on historical data.
If applied correctly, predictive analytics can enable companies to identify and respond to new opportunities more quickly, they said.
In a keynote address, James Taylor, CEO of Decision Management Solutions, said predictive analytics is especially useful in situations where companies need to make quick decisions with large volumes of data.
Predictive analytics practices can help companies in three key areas: minimizing risk, identifying fraud and pursuing new revenue opportunities, Taylor said.
For instance, predictive analytics can help companies fine-tune their ability to identify risk in areas such as loan and credit origination or fraud in areas such as insurance claims, he said.
Importantly, by embedding predictive analytics into operational data, companies can put themselves in a better position to identify new revenue opportunities, Taylor said. For example, by looking at a customer's historical purchase patterns, companies can make reasonable predictions about the kinds of promotional offers and coupons that are likely to resonate with that customer.
Blue Cross and Blue Shield System (BCBS) is one organization that is already deriving considerable benefits from predictive analytics. As an organization that provides healthcare insurance to nearly one in three Americans, BCBS has amassed a huge amount of claims-related data over the years.
A few years ago, the BCBS Association, the entity that holds the Blue brands, created a single database called Blue Health Intelligence (BHI) to consolidate all the claims information maintained by each of the 39 companies that are part of BCBS. The database is one of the largest repositories of de-identified healthcare data anywhere and contains claims-related information about more than 100 million people.
BHI operates as an independent unit and provides a range of business intelligence services that is enabling better healthcare services for members while also transforming the manner in which BCBS manages its costs.
The impetus for the effort came from the need for BCBS, like other health insurers, to control spiraling costs, said Swati Abbot, president and CEO of BHI, during a presentation.
A disproportionate share of healthcare costs goes toward the care of people with chronic illnesses, Abbot said. In fact, the top 5% of healthcare users account for more than 55% of healthcare costs, she said.
By applying predictive analytics technologies to its vast trove of claims data, BCBS has been getting better at not only identifying the risk factors that lead to several chronic diseases, but also identifying individuals who are at heightened risk of getting such diseases, she said.
- Software Asset Management: Ensuring Today's Assets Today's trends like BYOD and SaaS are new and exciting in terms of how they will help make our jobs more productive but...
- Trends Shaping Software Management: 2014 Most IT executives recognize the relationship between mobile computing and worker productivity, and have long issued notebook computers and other mobile devices to...
- Software Asset Management: Pay Attention or Pay Up There is a wide range of options for managing software assets, from in-house solutions to the cloud to managed services providers. Read this...
- 13 Reasons to Move to Adobe Creative Cloud One of the big advantages Adobe Creative Cloud for teams offers over Adobe Creative Suite 6 perpetual software is the ability to continually...
- It's not too late...Get Your Mobile Questions Answered Live! How can IT provide seamless and secure mobile communications and collaboration for all? Join this live Webcast as IDG asks an expert panel...
- Capturing Data in Motion: Delivering Real-Time Insight from Data Streams This webcast will help organizations of all types and sizes learn about a technology and business strategy for tapping into the wealth of... All Business Intelligence/Analytics White Papers | Webcasts
Our new bimonthly Internet of Things newsletter helps you keep pace with the rapidly evolving technologies, trends and developments related to the IoT. Subscribe now and stay up to date!