Predictive analytics is a way to predict future events by discovering patterns in historical data. This advanced form of analytics could involve data mining, algorithms, statistical modeling techniques and even machine learning. These can help CFOs identify trends for more accurate planning, forecasting and decision making.
How predictive analytics benefits businesses
Incorporating predictive analytics into quarterly or annual goal setting can benefit businesses in a variety of ways. The biggest, overarching benefit is giving greater insights that lead to making faster, more informed decisions. Predictive analytics can also leverage data to determine outcomes before they happen. This is especially useful in installing safeguards against intentional fraud and suspicious activities or innocent errors.
Where to apply predictive analytics
Predictive analytics can be used in a variety of ways. Here are just a few instances of where you can utilise predictive analytics to lead to better, more accurate outcomes:
- Fiscal planning
- Risk assessment
- Forecasting sales
- Market analysis / optimising marketing campaigns
- Resource management