Predictive analytics sparks sizable bottom line benefits
When businesses face both shrinking profit margins and a rapid expansion—if not an outright explosion—of data, the convergence of the two can fuel innovative applications of predictive analytics that help sharpen competitive advantage and convert data into dollars. Using predictive analytics, perhaps the most transformative of modern technology trends, organizations can discover the patterns buried within their vast stores of data, both structured and unstructured—and the insights drawn from these patterns can then help bolster bottom lines.
The speed of modern business no longer leaves time for poring over monthly reports or analyzing big-picture trends. Rather, businesses must make decisions in the moment, relying on intelligent models that funnel together disparate data sources to recommend next best actions and to extract the insights that can help boost revenue.
Focus your resources for maximum effect
Consider the case of MedeAnalytics, Inc., a leading provider of healthcare performance analytics solutions based in Emeryville, California, which looked to the IBM SPSS Modeler predictive analytics platform to help its clients—900 in both the United States and the United Kingdom—effectively overcome the challenges of collecting payments. Observing that the collections process, though costly and time-consuming, fails 85 percent of the time among self-pay patients—and that collectors were devoting the same amount of time to all patients—MedeAnalytics discovered that 20 percent of self-pay patients deliver 80 percent of the funds collected.
After analyzing 40 indicators of payment behavior, MedeAnalytics used SPSS Modeler to develop an insight-driven, propensity-to-pay score for each patient. Using these scores to guide their efforts, collectors focused on collecting from the 20 percent of patients deemed most likely to pay—and brought about not only a 12 percent increase in collections revenue but also a 30 percent reduction in fees paid to collections agencies.
Transform your position in your industry
Similarly, Andrews Distributing’s implementation of predictive analytics gives an indication of just how many industries—through an equally wide range of applications—are uncovering insights in their data that help them boost revenue by transforming their business. This Dallas-based beverage distributor turned to SPSS Modeler for aid in enhancing its distribution services, hoping to boost retail sales by ensuring the stocking of suitable brands of beer in ideal locations. After mining data on 1,000 SKUs sold at 10,000 retail locations, Andrews Distributing designed a dashboard that presented each retail account with individual recommendations designed to help it boost sales by stocking an ideal product mix.
Thus, using an automated process that operated about 75 percent more quickly than the former spreadsheet-based approach, Andrews Distributing transformed its position in the supply chain, no longer acting only as a deliverer of beer but also as a sales consultant. As a result, Andrews Distributing expanded its partnerships to include two additional brewing companies while achieving a 35 percent compound monthly growth rate for a new beer.
Learn more about how the power of IBM SPSS predictive analytics can help you transform your business while boosting your bottom line.