Dallas digital summit 2013 - Big Data Session Talk
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Methodical process for improving confidence in predictive analytics for business decision making focused on overall return-on-investment
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Dallas digital summit 2013 - Big Data Session Talk
- 1. Predictive analytics for “Quantitative” ROI-driven decision making Sai Devulapalli Director, Technology Strategy Ericsson North America
- 2. Machines vs. Management Training Machines Management Scoring Score = 0.65 Gut Feeling !
- 3. “Crossing the Chasm” in Predictive analytics • Align business intuition with predictions • Is it the data or is it the inference ? • Quantitative ROI metrics Trust takes time, i.e. Business Cycles Trust takes time, i.e. Business Cycles
- 4. Machines and Management Score= 0.65 Business Cycle 1 Training Scoring Score= 0.75 Business Cycle 2 Training Prediction vs. Intuition vs. Reality Scoring Score= 0.85 Business Cycle n Machines Management Training Scoring Prediction vs. Intuition vs. Reality
- 5. Micro Decisions: Few decisions → Millions of instances For each instance Upgrade Replace Promote Market Customers Equipment Devices Network nodes Products Observed Observed Attributes Attributes Instances Instances Next business cycle Decisions Decisions Predicted Predicted Outcome Outcome Business Business Decision Decision Outcomes after Outcomes after Business Business Decision Decision
- 6. Two Stage Prediction Score Score Outcome Outcome Observed Observed Attributes Attributes Learn Learn Outcome Outcome Real Outcome on Real Outcome on control group control group Predicted Predicted Outcome Outcome Observed Observed Attributes Attributes bd1 * ** bd2 bdt * ** Business Decision bd11 Business Decision bd Learn impact of Business Decision bd11 Learn impact of Business Decision bd Real Outcome after bd11 Real Outcome after bd Experimental Groups (EG) EG1 EGt EG2
- 7. “Quantitative” ROI-driven decision making ROI(in→bda) : ROI in applying business decision bda to instance in = cost savings from change in outcome for in – cost of business decision bda Decreasing order of ROI Business Decisions Budget ROI(ia1→bda1) ROI(ia2→bda2) ROI(ia3→bda3) ROI(ia3→bda3) * * * Instance skipped Out of budget
- 8. Maturing predictions over business cycles Today Num. of Instances Experimentation Experimentation Business Intuition Business Intuition Predictive Predictive Optimization Optimization Control Group Experimental Group 1 Experimental Group 2 Experimental Group 3 Business Cycles and Prediction maturity 1. Pre-paid subscribers Churn analytics 1. Pre-paid subscribers Churn analytics 2. Marketing Campaign management 2. Marketing Campaign management