I’ve updated a slide I created I created a while back and included on an old blog titled The Intelligence of Business. It depicts how Information Technology expands the potential for businesses. Originally, it only had four bars; the missing one being the “Predictive Analytics” bar. When I created the original version of this slide a few years ago, I thought Predictive Analytics would play an immediate fundamental role in the notion of “Business Intelligence for the masses”. At this moment, it plays a niche role, with “BI for the masses” still not really much more than ad-hoc reporting. I describe this in my recent blog, Why Isn’t Predictive Analytics a Big Thing?
Today we are at the “Cheap and Readily Accessible Reporting and BI Capabilities” bar. Most large companies have a “BI” system, the “intelligence” (as depicted by the small amount of rules represented by light green) is lacking. It’s mostly ad-hoc reporting than “decision support”. The small amount of “rules” consist of some constructs such as KPIs and maybe some logic in the ETL.
However, as the “BI with Predictive Analytics” bar illustrates, implementation of nuggets of Predictive Analytics throughout an enterprise (depicted as a larger area of light green) results in much greater potential for a business. In this bar, the greater amount of rules include the automatically derived rules from data mining models.
Figure 1 – Predictive Analytics today can significantly expand the scope of a business.