Prescriptive Analytics: Meaning, Benefits, Best Practices

Prescriptive Analytics helps organizations make better decisions by understanding and optimizing data for strategic intelligence.

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Prescriptive analytics is a type of predictive analytics that can provide recommendations to meet a goal. This analytics can help businesses make better decisions based on the data they have.

We can use prescriptive analytics for many things, including predicting customer behavior, optimizing marketing campaigns, and improving supply chains.

prescriptive analytics

What is Prescriptive Analytics?

Prescriptive analytics is a type of analytics that uses machine learning and statistical analysis to make predictions. We can use it to predict outcomes. Such as what products customers will buy or how much inventory you will need.

The main difference between prescriptive and predictive analytics is that prescriptive takes past data and historical trends into account to make predictions. These systems are designed to use historical information to take action based on current trends or events. For example, if an employee has high customer satisfaction scores from previous years and has been working with customers for several months without any problems. Then it would be safe for them to be trusted to handle more complex tasks. Then other employees with a history of serving clients poorly or making mistakes when dealing with clients.

How to use Prescriptive Analytics

We use prescriptive analytics to predict the future. It uses historical data analytics, information, statistical models, and algorithms to make predictions. As a result, we can sue it to make business predictions. For example, we can use prescriptive analytics to help doctors determine the best treatment for patients diagnosed with a particular condition or disease.

In addition, it is also helpful in helping businesses understand what kinds of products they should develop based on consumer trends. For example, suppose prescriptive analytics shows consumers are more interested in eco-friendly products than traditional ones (such as plastic bottles versus glass bottles). In that case, this information could help companies decide which kind of product they want to focus on developing next year or beyond!

Benefits of Prescriptive Analytics

  • This analytics helps you make better decisions.
  • It can help you make better business analytics decisions.
  • This analytics can help you make better product decisions.
  • Analytics can help you make better marketing decisions.

Disadvantages of Prescriptive Analytics

  • It requires a large amount of data.
  • The required computing power is high.
  • It can take a long time to implement prescriptive analytics.
  • Not always accurate

How to implement a Prescriptive Analytics solution

The process of implementing a prescriptive analytics solution can vary greatly depending on your organization's unique needs. The following is an overview of what you can expect to encounter along the way:

  • Key steps include identifying business problems and determining how to address them. And selecting data-driven analytical techniques to help you achieve your goals. This includes choosing appropriate tools for collecting and analyzing data and understanding how data quality affects decision-making.
  • Essential tools may include analytics software (such as statistical packages), visualization tools like Tableau or Qlikview, and machine-learning technologies like H2O or RStudio's Shiny package. We can use all of these independently or in conjunction with one another, depending on your specific needs.
  • Data quality refers to whether multiple sources have verified the information provided by users before being entered into a database so that it accurately reflects reality. This is especially important when working with large datasets found within healthcare systems. People often enter different values for seemingly similar information, such as birth dates. Because they're still determining if they have correct details from old records stored elsewhere (e.g., medical bills).

Real-World examples

  • Healthcare
  • Marketing and Advertising
  • Retail: Understanding how a retailer can use prescriptive analytics to target customers with specific offers or coupons based on past purchases. This reduces time-to-delivery for the retailer and increases revenue for the brand.

Prescriptive Analytics vs. Predictive Analytics

Prescriptive Analytics is a more advanced form of Predictive Analytics. While we use Predictive Analytics to determine the probability of events occurring in the future. Prescriptive Analytics uses data and analysis to decide what to do to increase the likelihood of the desired outcome.

Predictive analytics can help you identify customers most likely to churn. Still, prescriptive analytics will tell you what you need to do with that information—for example, sending them personalized offers or cross-selling related products. Similarly, predictive analytics may show that certain demographic factors correlate with higher customer retention rates (e.g., younger customers tend to leave more than older ones). Prescriptive analytics could make recommendations based on these correlations (e.g., sending targeted emails offering discounts for new accounts).

Overcoming common challenges

Prescriptive analytics software has been around for quite some time. However, like many other technologies, prescriptive analytics is not a magic bullet: it requires careful planning and execution to realize its full potential.

The first significant challenge of prescriptive analytics is that data collection can be complicated. As with most data-driven initiatives, data collection must be carefully planned to avoid redundancy or missing information that could lead to incorrect conclusions. With thorough planning, you can know whether your results are accurate enough to make changes based on them!

A second common challenge is the poor quality of data itself — even if all sources are available and organized correctly (which may require an immense amount of work), if collected improperly, then the accuracy of your analysis will suffer significantly as well.

The future

Prescriptive Analytics is a powerful tool, but it's still in its infancy. Many challenges must be overcome before they can be used in various applications. The future will likely see the use of Prescriptive Analytics increase as we continue to figure out how best to apply this technology and make it more accessible for people outside of data science teams.


Prescriptive analytics is a powerful tool for businesses and organizations to use to improve their decision-making processes. However, many challenges must be overcome before this technology can be used on a widespread scale. The future of prescriptive analytics will depend on overcoming these obstacles and finding new ways to use it effectively to achieve success.

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