Despite the hype and hopes surrounding the use of predictive analytics, a relatively small number of enterprises consider it a critical element of their business intelligence (BI) strategies today, new research shows.
Only 13% of businesses say they use predictive analytics, ranking it dead last among a group of 10 BI capabilities, well behind spreadsheets (60% of businesses), BI (49%), analytics databases (41%) and custom-built systems (34%).
Worse news for CIOs? Traditional BI teams rank behind both data scientists and business analysts in their ability to deliver predictive analytics, according to a new study from Ventana Research Corp.
“Predictive analytics remain a specialist tool,” said David Menninger, former research director at San Ramon, Calif.-based Ventana Research and author of its Business Analytics Benchmark. He presented the study’s findings, which were based on a study of 2,600 organizations and the types of analytics they perform, at a recent Mass Technology Leadership Council (MassTLC) seminar, Data Science — A Practitioner’s Perspective.
“I have some theories as to why [analytics] is dead last. Personally, I think it is very hard, and the math involved is beyond the capabilities of many people or their training today,” said Menninger, who recently left Ventana to head business development at EMC Corp.’s Greenplum data analytics division.
The study does suggest that the potential payoff of predictive analytics is high. Of the 13% of the study’s respondents using predictive analytics capabilities, 80% ranked its capabilities as “important or very important” to their organizations. Not surprisingly, much of the work using predictive analytics homes in on revenue-related activity. Among the top five uses of predictive analytics, forecasting and marketing ranked first (72%), followed by marketing analyses (70%), customer service or support (45%), product recommendations (43%), and fraud detection (34%). Within a year, however, the largest growth area for predictive analytics will be around social network analysis, the study showed.