CELBRIDGE INC.

Predictive Analytics

Definition & Insights

January 31, 2016

Agenda

• Predictive Analytics

• Definition• Process• Phased Development

2

Predictive Analytics

Defined:Brief Examples:Goal driven analysis of

“large” data sets…

To identify an approach for allocating organizational resourcesThat enhances performance on the organization’s self-defined performance metricsTo better achieve the organization’s business objectivesUsing a repeatable consistent strategy

Business

Objectives

DataQuantitative

Analysis

Spread

Sheets

BusinessIntelligence

Data Mining

Predictive

Analytics

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Predictive Analytics:

Opportunity Identification

1. Define Business Objective

2. Define Performance Metrics

3. Identify Behaviors that Impact

Performance

4. Identify Scarce Resources to be

Allocated

5. Confirm Availability of Historical Data

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Pro

cess

Ste

ps

Participants Barriers

Business Expert(s) Data Expert(s) Math Expert(s)

Determine Business Question(s) & Performance Metric(s)

Knowledge of Available Data: Within Internal and External Sources

Access to – or Quick Creation of – Usable Data; Minimizing Replication & Security Issues

Connection to Front-Line Business Issues

Time to Devote to Project; Collaboration with Fellow Data Scientists

Integration with Many Modeling Software Tools

Volume of Data to Validate Models

Data Expert Support to Embed Working Model into System; Business Expert Support to

Implement Business Process Changes

Identify Relevant Data

Pull Relevant Data

Data Preparation

Model Data

Evaluate Models

Deploy Validated Model(s)

Reporting Structure & Access to Expertise

Predictive Analytics Process

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Statistics Focuses on Central Tendency

Statistically Significant Difference, p < 0.05 ?

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Statistics vs. Predictive Analytics

Predictive Analytics Focuses on the “Tails”

Identification of the ExtremesHold-Out Sample Validation

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Statistics vs. Predictive Analytics

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Classification Forecasting

…Determined Largely by Phrasing of “Business Question”

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Predictive Analytics Success

Phase 1: Positive Behavior

Phase 2: Negative Behavior

Phase 3: Conflict Resolution

Phase 4: Ranking Across Continuum

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Predictive Analytics: Phased Execution

Phase 5: Enhance Dimensionality

Phase 6: Refine Precision

Phase 7: Forecasting

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Predictive Analytics: Phased Execution