Summary
This chapter is dedicated to the definition and description of predictive analytics and its most prevalent enabler, data mining. As shown in the illustrations of the simple taxonomy for business analytics in Chapter 1, predictive analytics is positioned between descriptive and prescriptive analytics, with the aim of answering the question “What will happen?” Whereas descriptive analytics takes a retrospective view, predictive analytics takes a prospective approach to foresee what is most likely to happen in the future so that the incipient problems can be identified and prevented before they happen and potential opportunities can be recognized and leveraged before they become apparent to everyone (especially the competition). This chapter presents these seemingly complex concepts using several illustrative examples and application cases.