Prescriptive analytics are the next phase of analytics, after Descriptive, Diagnostic and Predictive.
While predictive analytics point out what will happen in the future, they fall short in explaining why or suggesting possible solutions. That’s where prescriptive analytics offers value. This type of analytics uses two additional areas of data, actionable data and outcome tracking, to recommend possible courses of action, based on the success of prior scenarios.
Using prescriptive analytics, for example, a retailer can not only identify trends in customer buying habits, but also adjust inventory and suggest other items to offer those customers. Healthcare providers use prescriptive analytics to identify patients at highest risk for hospital readmission, then offer treatment options that work best to prevent them.
Because an integral component of prescriptive analytics is a feedback loop that tracks the success of each outcome, the benefits it offers an organization increase with use.