Predictive vs Prescriptive Analytics

What are Predictive Analytics?

Predictive Analytics is analytics that deals with prediction of future outcome. These predictions are based on several techniques like data mining, data analysis, machine learning and so on.

What are Predictive Analytics Tools?

For a business to have creative use of data, they need predictive analytics tools with already existing data to make predictions about unknown future outcomes to help improve business decisions, patient health, and risk management.

These predictive analytics tools help in prediction but not 100% accurate. They also help in quantifying probabilities of possible outcomes. These probabilities can help improve methods or strategies needed to be implemented by any business to improve their systems.

Types of Predictive Analytics Tools

There are several tools out there used for Predictive analytics such as IBM SPSS, Rapid Miner, SAP, SiSense and so on.

What are Predictive Models?

Predictive Models are meant for assessing historical data, discover patterns, observe trends, and use same information to predict future events.

Types of Predictive Models

  1. Forecast model
  2. Classification model
  3. Time Series model
  4. Clustering model
  5. Outliers model

In this video I talked about the best data modelling tools most suitable for building data models.

Why do we Predict with Data?

We predict to manage risk, and improve processes in business communities, states, countries and so many other reasons.

Prediction is important and is done based on historical data which can be customer data, weather data, fraudulent activities and so much more.

Example of Predictive Analytics

In Healthcare, predictive analytics is used in predicting the spread of contagious diseases like Covid-19, and probability of person-to-person ratio spread.

In Finance, predictive analytics is used to predict fraudulent transactions and risk assessments in giving loans.

What are Prescriptive Analytics?

Prescriptive Analytics is analytics process where data is analyzed and instant recommendations on how to improve business practices are provided.


Simply stated as an area of business analytics dedicated to finding the best course of action for a given situation.

Example of Prescriptive Analytics

Is Tesla’s self-driving car and Waymo are analytics in action because they recommend best course of action for any pre-specified outcome.

Another example is in Marketing and Sales. These agencies have access to enormous amount of customer data to help them determine best marketing strategies, such as what types of products pair well together and how to price products.

Prescriptive analytics is very valuable in optimizing operations, growing sales, and managing risk.

In Healthcare industry, prescriptive analytics is highly used in specific recommendations on patient care delivery.


In summary, the difference between both is predictive analytics utilize collected data to produce future outcome while prescriptive analytics utilize data beyond prediction to provide results and make suggestions to improve outcome.

Predictive analysis is a wider set of data analysis. Other aspects of data analytics include descriptive analytics, which helps you understand your data. Diagnostic analytics which help in identifying the causes of what happened.

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