Chart your future with predictive analytics

Transcription

1 IBM Analytics Feature Guide IBM SPSS Modeler Chart your future with predictive analytics Finding hidden trends in your data can give you tremendous insights into your business.

2 2 Chart Your Future Contents 3 Produce accurate sales and demand forecasts 4 Predict revenue with precision 4 Innovate faster 5 IBM SPSS Modeler: Your toolkit for more effective planning and forecasting 5 Try IBM SPSS Modeler today for more accurate forecasts tomorrowy Introduction Predictive analytics uses historical and existing data to predict what will happen next. These data-driven predictions can bring value to organizations in all industries by adding an extra layer of confidence to decision-making. What will your revenue be next year for the company as a whole, and for individual products? What will raw materials likely cost to manufacture our products? All of these activities require decisions or actions now that will have consequences in the future, making accurate forecasts about uncertain future events an essential source of information for management. Finding hidden trends in your data can give you tremendous insights into your business. Hone your competitive edge by mining your existing data to extract insights that can enable you to assess the impact of future scenarios. Harness the power of IBM SPSS Modeler s advanced predictive capabilities to optimize strategic business decisions and processes that will help you speed growth and innovation and outperform your peers. Forecasting, also known as time-series analysis, can be applied in every functional area or level of your organization. A time series is a set of observations obtained by measuring a single variable regularly over a period of time: In a series of inventory data, the observations might represent daily inventory levels for several months. A series showing the market share of a product might consist of weekly market share taken over a few years. A series of total sales figures might consist of one observation per month for many years. What each of these examples has in common is that a variable was observed at regular, known intervals over a certain length of time. The form of the data for a typical time series is a sequence or list of observations representing measurements taken at regular intervals. IBM SPSS Modeler provides the tools to help you develop reliable forecasts using time-series data in hours instead of days, significantly boosting productivity and ROI in your most critical applications. SPSS Modeler is unique because it simplifies forecasting through its Expert Modeler feature. You don t need to know which forecast to use the software will help you decide which technique to use while building your model.

3 IBM Analytics 3 Produce accurate sales and demand forecasts This type of forecast provides information on capacity planning, product mix, budgets, advertising and promotion. Seasonal fluctuations in demand can have a significant effect on production, inventory and demand. Forecasting capabilities in SPSS Modeler can take into account holidays, weather, and other external events or data and combine that information with time series data to arrive at an accurate prediction. The software actually adjusts for seasonal ebbs and flows, so you get a clearer picture of what demand will be at a specific point in the future. SPSS Modeler also provides classification techniques that can be applied when you know that certain factors trends, aggregate numbers, historical trends will impact a particular decision or data point. You can use this information to make predictions about a number of events that are likely to happen in the future. The results of your forecast or prediction can be viewed in a graphical format that makes it easy to see the ebb and flow throughout the year and share your analysis with other decision-makers or stakeholders in your organization. Demand forecasting typically relies on historical and transactional data, including dates and times that the transactions or events occurred. Social media data can also be integrated to provide even greater insight. Using SPSS Modeler, a U.S. beer brewer developed a demandforecasting solution that helps it meet retailers needs promptly and precisely. The solution analyzes historical sales information, current stock levels and factors such as weather and holidays to create forecasts that give the sales and operations teams a glimpse into the future. As a result, the brewer can nimbly adjust production and distribution, helping ensure that the right amount of beer gets to the right market at the right time, driving up sales and profitability.

4 4 Chart Your Future Predict revenue with precision Financial managers and executives need to produce accurate forecasts of projected revenue and profitability. If revenue forecasts are below targets, a company may need to recalibrate products or services to attract new customers or keep current customers from leaving. With a model-based approach to forecasting, marketers can perform what-if analyses to test new product or service initiatives that examine impact by customer and customer segment. In turn, sales team members can evaluate these scenarios to adjust their sales strategy, such as maximizing time spent with the most profitable customers. Say you are a product manager responsible for forecasting next month s unit sales and revenue for each of 100 separate products, and have little or no experience in modeling time series. Your historical unit sales data for all 100 products is stored in a single Excel spreadsheet. After opening your spreadsheet in SPSS Modeler, you use the Expert Modeler and request forecasts one month into the future. This helps you find the best model of unit sales for each of your products to produce your forecasts. Since the Modeler can handle multiple input series, you only have to run the procedure once to obtain forecasts for all of your products. By choosing to save the forecasts to the active dataset, you can easily export the results back to Excel. Innovate faster Which new corporate strategies or policies should you put in place? What kinds of new projects are you going to pursue? Where should you locate new branches or locations? Predictive analytics can help you answer these strategic questions and quickly take action. A large fashion retailer learned its customers were highly interested in a mobile shopping experience. So the company focused its efforts on designing and deploying mobile applications for all its brands, including a recommendations engine built with SPSS Modeler that presented customers with the right products at the right time. Learning how and when their customers buy allowed the retailer to turn those insights into new products that opened new revenue streams and increased customer loyalty.

5 IBM Analytics 5 IBM SPSS Modeler: Your toolkit for more effective planning and forecasting You have a wealth of information about your business, stored across multiple enterprise systems: sales data, production and inventory data, research and development data, strategic planning and other critical data about your business. SPSS Modeler enables you to pull all of this data together to create a complete view for analysis. This allows you to take advantage of all the data available regardless of its format spreadsheets, databases, text, web, transactional, geospatial and extracts value from it by discovering untapped insights about your organization. Typically, much of this data will not be ready for analysis, and will need to be prepared and cleaned before you can work with it. In order to speed up a usually time consuming process, SPSS Modeler provides automatic data preparation capabilities, so that you can spend more time on analysis and communicating results to your key marketing decision-makers and stakeholders. IBM SPSS software has a broad range of capabilities that can improve your marketing and sales decisions and outcomes. Here are a few of the techniques that are valuable to financial and business planners: Classification algorithms: This is a data mining function that assigns your customers to target categories or classes. The goal of classification is to accurately predict the target class for each case in the data. For example, a classification model could be used to identify customers or prospects with a low, medium or high probability of making a purchase. Segmentation algorithms: These techniques group people or detect unusual patterns in your customers or prospects. Marketers frequently use segmentation algorithms to divide a broad target market into subsets of people that have or appear to have common needs, interests, and priorities, and then design and implement strategies to target them. Association algorithms: These techniques look for relationships between fields for example, a certain percentage of customers who have purchased both product A and product B also have purchased product C. Time-series modeler: This technique creates models for time series and produces forecasts. It includes an Expert Modeler that automatically determines the best model for each of your time series. SPSS Modeler includes the most popular types of classification, segmentation and association models, in addition to forecasting and many other advanced analytics techniques for solving just about any business challenge. SPSS Modeler software can import and analyze data from a broad range of systems, small and large, by using APIs to integrate with other data systems. With a graphical approach that requires no programming, IBM SPSS Modeler is designed to be used by a wide variety of professionals, whether or not they are trained programmers or analysts. You don t even need to know which technique to choose; the software will suggest options that are applicable to your project. Try IBM SPSS Modeler today for more accurate forecasts tomorrow Now that you have a clearer idea of the many ways you can use predictive analysis to chart a more profitable future for your business, you are ready to try IBM SPSS Modeler. Download our 30-day trial to discover how you can transform your data into new possibilities for your business.

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