E-book on Predictive Analytics


Published on

A guide to understand all about predictive analytics & data mining focusing the best practices in Data mining and Predictive analytics.

Published in: Technology
  • Be the first to comment

E-book on Predictive Analytics

  1. 1. Published on : Feb 7, 2012 Hexaware E-book on Predictive Analytics Business Intelligence & Analyticswww.hexaware.com Actionable Intelligence Enabled© Hexaware Technologies. All rights reserved.
  2. 2. Hexaware E-book on Can you name some specific uses of data mining? Some Specific uses of data mining include:Predictive Analytics Market segmentation - Identify the common characteristics of customers who buy the same products from your company.What is Data mining? Customer churn - Predict which customers are likely to leave yourData mining, or knowledge discovery, is the computer-assisted process of company and go to a competitor.finding hidden patterns in data. Data mining tools predict behaviors andfuture trends, allowing businesses to make proactive, knowledge-driven Fraud detection - Identify which transactions are most likely to bedecisions. Hence it is also called predictive analytics. fraudulent.Data mining tools can answer business questions that traditionally were Direct marketing - Identify which prospects should be included in atime consuming to resolve. They scour databases for hidden patterns, mailing list to obtain the highest response rate.finding predictive information that experts may miss because it lies outside Interactive marketing - Predict what each individual accessing a Web sitetheir expectations. is most likely interested in seeing.When and where the data mining and predictive analytics could be Market basket analysis - Understand what products or services areuseful? commonly purchased together; e.g., beer and diapers.The amount of raw data stored in corporate databases is exploding. From Trend analysis - Reveal the difference between typical customers thistrillions of point-of-sale transactions and credit card purchases to month and last.pixel-by-pixel images of galaxies, databases are now measured ingigabytes and terabytes. Raw data by itself, however, does not provide Will sharing data to do data mining raise privacy related issues?much information. What needs to be done in such scenarios?In todays fiercely competitive business environment, companies need to There is a way to deal with sensitive data like credit card numbers,rapidly turn these terabytes of raw data into significant insights into their insurance policy numbers and account numbers. Data need to be maskedcustomers and markets to guide their marketing, investment, and or recoded to maintain the privacy.management strategies.In these scenarios data mining would help you unlock the hidden potentialof your data and deliver actionable insights.www.hexaware.com© Hexaware Technologies. All rights reserved. 1
  3. 3. What are all steps involved in data mining? Name some tools used for Data mining?Data mining process involves predefined steps starting from a. Microsoft BI stack has SSAS as part of SQL Server 2008• Business case understanding or Problem understanding, b. There is an open source tool called R which offers data mining• Data understanding solution• Data extraction c. Rapid Miner is an another open source tool• Pre-processing d. SAS is of course is a highly sophisticated tool with enormous computational power• Mining model building e. IBM has it’s tool called SPSS• Testing and Evaluation f. Oracle’s ODM – Oracle Data MinerIs there any maintenance to be done for the mining model once it is The above list is not exhaustive.deployed? What are all the industries in which Predictive Analytics isYes, the mining model needs to be calibrated at least once in six months. applicable?The frequency varies based on the business need and the volume of data We have recently provided predictive analytics solutions for followingflow Industries:Calibration involves • Insurance• Checking the predicted output with the actual output • Education• Modifying the mining model if required Public • MiningCan data mining solution be offered on the cloud? • LogisticsYes, Data mining solution can be offered on the cloud. • Health & HygieneOrganizations can adopt “Pay per use” method without investing on the In short, predictive analytics can be deployed for diverse industries.infrastructure required. Here the challenge is to upload huge amount ofdata on the cloud.www.hexaware.com© Hexaware Technologies. All rights reserved. 2
  4. 4. What are all the risks involved in using predictive analytics solution? Can you list some of the best practices in Data mining and• Wrong understanding of business problems and data will result in a Predictive analytics? prediction model with complex statistical algorithms, but it will be of no • Executive Support: Support from the decision makers and middle use to the business. management would make a world of difference.• Wrong interpretation of the results would lead to wrong decisions. • Business problem specificity: Identification of correct business problem• Poor data quality would result in poor predictions. to apply predictive analytics is vital to the success of the mining model.• Absence of maintenance of the mining model would make predictions • Availability of historical data: Richer the data, the more robust will be obsolete. the mining model.• Building the predictive analytics solution with resources with less • Good quality data: It is the most important factor for an accurate mining statistical knowledge will lead to less accurate models. model. • Pre-processing: While building the mining model, one of the mainWhat is Text mining? activities is pre-processing where the data is cleansed, sliced, dicedText Mining is the process of deriving high quality information from and categorized to suit to the mining model. Good businessunstructured text data. There are various techniques used to derive high knowledge and a sound data mining knowledge is required to do thisquality information from textual data, such as computational linguistics, as this is the base for the predictive model.information retrieval, statistics, machine learning, etc. • Selection of statistical techniques: Experienced data mining resourceVarious forms of text mining include categorization, classification,clustering, concept extraction, summarization, sentiment analysis, etc. can choose the correct statistical technique and can compare the accuracy of other techniques.Are the open source tools sufficient and robust in providing • Interpretation of output: It is extremely important to interpret the outputanswers to tough business cases? in the correct way and link it back to the business problem statedOpen source tools like R and Rapid miner provide excellent flexibility to initially.build the model. Online R community constantly updates algorithms andindustry specific solutions as packages to R after validating. So far thereare around 3500 packages built in R.R’s popularity has been increasing over the other predictive analytics tools.In a recent survey Kdnuggets.com reports that R has 24% of market shareand R is the most sought after statistical programming language.www.hexaware.com© Hexaware Technologies. All rights reserved. 3
  5. 5. Thank you for reading our E- Book, in case you have any queries please write back to us at corporatemarketing@hexaware.com If you want to keep up with the industrys latest trends, please visit our blog on BI http://blogs.hexaware.com/index/business-intelligenceFor more information on our Business Intelligence & Analytics services please visit http://hexaware.com/business-intelligence-analytics.htm About Hexaware Hexaware is a leading global provider of IT and BPO services. The company has achieved leadership position in domains such as Banking, Financial Services, Insurance, Transportation, Logistics and HR-IT solutions. Hexaware focuses on delivering business result leveraging technology solution and specializes in Business Intelligence & Analytics, Enterprise Applications, Independent Testing and Legacy Modernization. Hexaware has been providing business technology solutions for over 20 years and offers world class services delivery, technology leadership and skilled human capital. www.hexaware.com © Hexaware Technologies. All rights reserved. 4