Predictive analytics go to work

Contrary to popular opinion, you don't need a huge budget to get started.

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Intuit developed predictive task algorithms to anticipate how users will categorize financial transactions in products such as Mint and QuickBooks. Based on the results of those algorithms, Intuit applications make suggestions as users enter new transactions. They also anticipate questions users might have and proactively provide content and advice that could help them.

"Start with a clearly articulated business outcome, formulate a hypothesis about how the process will contribute to that outcome, and then create an experiment," says Roumeliotis. Through A/B testing, analysts can gain the confidence of business leaders by creating parallel business processes and demonstrating a measurable improvement in outcomes.

Just be sure to start by choosing an existing business process that can be optimized with minimal risk to the business, he advises. Customer support, retention and user experience are great places to get started.

While predictive analytics projects can require a substantial investment up front, studies indicate that they can deliver positive returns on investment, as Cisco's experience shows. Ultimately, even small-scale projects can have an enormous impact on the bottom line. "Predictive analytics is about projecting forward and transforming the company," says Peri.

The risks are high, but so are the rewards, says Robinson. "Take it to the end," she says. "Be successful. And act on what you learn."

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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This story, "Predictive analytics go to work" was originally published by Computerworld.

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Copyright © 2012 IDG Communications, Inc.

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