predictive analytics roadshow
TRANSCRIPT
© 2015 Software AG. All rights reserved.
PREDICTIVE ANALYTICS
OVERVIEW
© 2015 Software AG. All rights reserved.
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THE ANALYTICS SPECTRUMALL ANALYTICS ADD VALUE BUT ANSWER DIFFERENT QUESTIONS
Difficulty
Value
DescriptiveWhat
happened?
PredictiveWhat will happen?
DiagnosticWhy did it happen?
StreamingWhat is
happening?
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STREAMING ANALYTICS AND PREDICTIVE ANALYTICS
…while they can still change the outcome
BOTH TECHNIQUES COMPLEMENT THE OTHER
Predictive Analytics allows organizations to build models that represent patterns of behavior
Streaming Analytics uses these models to enable organizations to respond intelligently
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PREDICTIVE ANALYTICS FOUNDATIONS
All predictive analytic methods and models are based upon one common premise:
What has happened in the past will likely happen again
So once we learn from the past, we know what to look for in the future
And all of this is driven by the data itself, so:
The more data you have, the more you need Predictive Analytics
A FEW SIMPLE PRINCIPLES MAKE THIS POSSIBLE
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BUILDING A PREDICTIVE MODEL
Primarily, we are looking for whether a relationship exists between two variables
THE DATA DRIVES THE INSIGHTS
Dark Clouds Clear sky0
20406080
100
77
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UNEven DIS-TRIBUTION
% did it rain
There is a likely relationship between dark clouds in the sky and whether it rained
Monda
ys
Tuesd
ays
Wed
nesd
ays
Thurs
days
Friday
s
Saturd
ays
Sunda
ys0
20
40
60
23 22 22 24 23 24 26
EVEN DISTRI-BUTION
% did it rain
No relationship between the day of the week and whether it rained
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BUILDING A PREDICTIVE MODELTHE LOGIC CAN BE SIMPLE OR COMPLEX
An example of a decision tree showing whether it is likely to rain
8 |Time
BusinessValue
Business event
High valueresponse
Time to act
Low valueresponse
Forrester Research calls this “perishable insight”
TIME VALUE OF DATATHE LONGER THE REACTION, THE LOWER THE VALUE
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PREDICTIVE ANALYTICS IN USE TODAY
Entertainment: recommendations suggest new movies based upon your viewing history
– Leverages your tastes and the tastes of others like you
ALGORITHMS ARE ALL AROUND US
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PREDICTIVE ANALYTICS IN USE TODAY
Finance: consumer credit scores model the likelihood of your paying the loan back– Models your probable behavior based upon the defaults of many, many others
ALGORITHMS ARE ALL AROUND US
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PREDICTIVE ANALYTICS IN USE TODAY
Health: heart monitors warn of undiagnosed heart problems– Watches for known pulse irregularity patterns
ALGORITHMS ARE ALL AROUND US
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THE BUSINESS VALUE OF PREDICTIVE ANALYTICS
Fraud detectionBank detects unusual spending pattern on your card Retail
Making relevant offers at the right time
Predictive MaintenanceDiagnosing a failing pump
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SMART LOGISTICSSUPPLY CHAINS CAN RUN MORE EFFICIENTLY
• Enable shippers to plan activities efficiently in the harbor
Objective
• Change Transport Mode or lane
Automated action
• Arrival time
• Route failure prediction
Predictive Analytics
• Position, Status, ETA
Always On Analytics
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SMART STORE MONITORINGMERCHANTS CAN MAXIMIZE REVENUE
• Traffic density
• POS data
• Shelf sensors
Always On Analytics
• Increased revenue
• More effective merchandising & service
Objective
• Proactive staff re-deployment
• Offer updates
Automated action
• When offers adjusted
• When queues appear
• When shelves need replenishing
Predictive Analytics
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PREDICTIVE MAINTENANCEFIELD SERVICES CAN PREVENT OUTAGES
• Real-time conditions
Always On Analytics
• 99.999% uptime
• Increased 1st Call Repair Rates
Objective
• Technician Dispatch
• Field Service Automation
Automated action
• Failure prediction
• Remaining useful life of components
Predictive Analytics
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PREDICTIVE MAINTENANCE EXAMPLEPREDICTIVE ALERTS ALLOW MORE TIME TO REACT
CLEAR SIGNAL LEADING UP TO FAILURE…
– But reliant on human intuition to interpret in real time?
CONDITION MONITORING CAN ALERT ON THRESHOLDS:
– Tells you something might be wrong, but not what or how urgent
– Ignores machine-specific differences
Condition Monitoring Alert
Predictive Alert
Visual Identification
FAILURE
TIME $
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OPERATIONALIZING PREDICTIVE ANALYTICSREAL-TIME PREDICTIONS NEED TO BE EASY TO DEPLOY
Data-bases
Event Feed
Event Feed
Event Feed
Actions
Alerts
Notifications
ApamaApplications
Dev
elop
men
tR
untim
e
PMMLPredictive
Models
DataManagementApplications
USE CASES ANDCUSTOMER EXAMPLES
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SOFTWARE AG USE CASES FOR PREDICTIVE ANALYTICSSolution Industries Predictive Use Cases Enhancement Core
EnablerPredictive Maintenance • Manufacturing • Failure Prediction
• Remaining Useful Life x
Connected Customer
• Retail• Hospitality• Financial Services• Telecom
• Next Best Offer• Churn Detection• Queue Prediction• Path Analytics• Facial Recognition
x
Smart Metering & Manufacturing
• Utilities• Manufacturing
• Electricity Theft Detection• Quality Anomaly Detection x
Smart Logistics • Logistics• Manufacturing
• Route Failure Prediction• Arrival Forecasting x
Fraud Detection • Financial Services• Retail • Probabilistic Models x x
PARTNERING
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THE SOFTWARE AG STRATEGY
• Partnering with organizations with data science skills– This stuff isn’t impossibly complex– But it does need specialist modeling skills
• We are building on the Software AG platform– Gives us a fantastic integration message– Includes new OEM components such as Predictive Analytics for Apama– Along with components we resell such as KNIME and Predixion
• Open approach means we can work with the customer’s preferred modeling tools
© 2015 Software AG. All rights reserved. For internal use only
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GO-TO-MARKET OPTIONS BY CUSTOMER TYPE
Standardized on SAS/SPSS/etc
Export models in PMML and execute via
Apama
No preferred tools yet, R
Propose KNIME or Predixion as
a platform
Willing to build DS skills
Offer KNIME’s or Predixion’s
simple, graphical
approach along with trainings
Unwilling to build DS skills
Introduce services
partners like Mosaic
Customer has in-house data science skills
Customer does not have in- house data science skills
OPPORTUNITY BRAINSTORMING
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MARKET OPPORTUNITY
• Streaming Analytics worth $2 billion* by 2020 (Markets and Markets)
• Predictive Analytics worth $7 billion by 2019 (Transparency Market Research)
© 2015 Software AG. All rights reserved. For internal use only
PREDICTIVE ANALYTICS IS EVEN BIGGER THAN STREAMING
*Arguably, the value of streaming analytics has been underestimated as predictive analytics drives growth of streaming analytics Transparency Market Research © 2012
Market size by type of application:
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HOW TO SPOT AN OPPORTUNITY
Anywhere where an organization could benefit from knowing an event is likely to happen before it happens!
– Are they using SAS, SPSS, or R?– Are they using Apama?– Do they have a Big Data initiative?
© 2015 Software AG. All rights reserved. For internal use only
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ACCOUNT DISCUSSION
© 2015 Software AG. All rights reserved. For internal use only
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