Harnessing the power of big data is leading to greater opportunities for companies to predict market trends, spending, consumer behavior, and supply chain needs. This type of data mining is known as predictive analytics, and it can change the way you make business decisions. By investing in technology that gathers data, having clear objectives and goals, and putting evidenced-based decisions into action, companies can streamline their procurement processes and make smarter business decisions.
Until recently, creating a reliable forecast wasn’t feasible. However, today our computers can store and process massive amounts of data, and our technology to model trends has become an important part of the decision-making process. Rather than making decisions based on a few data points or even just a gut feeling, companies can now look at many different variables and use modeling based on current and previous facts and information to accurately predict future events.
Hundreds of predictive analytics software programs exist at all types of price points. Investing in one can be a daunting task and should take considerable thought. However, investing in the software and technology that allow you to gather the information you’ll need to process is crucial. Make sure you’ve done your due diligence to look for software that has all the features you need.
Before you can know what you’re looking for, you need to know what your goals are. Predictive analytics is only as good as your target. If you don’t have a clear objective in mind, as well as a strategy for collecting data, you won’t be able to get the information you need to make decisions. One of the powerful ways predictive analytics is used in business is to predict spending on a certain category and model different cost variables. This is useful when determining to switch suppliers or brands for all types of spending, including office supplies, car rentals, gasoline or diesel fuel, among others.
Once you’ve gathered your data and your objectives, you can begin creating action plans based on evidence. Not only will you be able to gather and analyze data, you can do it in real time. You won’t have to wait until the next executive meeting to determine where you can cut costs; your software can tell you right away where your best potential lies. And in a business environment where every second counts, you certainly can’t afford to wait.