In this video, I answer the question, what is Predictive Analytics? And I look at its application to Project Management.
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Descriptive Analytics, Prescriptive Analytics, and Predictive Analytics
Predictive analytics is an approach to figuring out what is likely to happen in the future. It uses statistical data and modeling to provide probabilistic estimates.
We can compare it at one extreme with Descriptive Analytics, which harnesses existing data to describe what has already happened.
At the other extreme, we can compare it with Prescriptive Analytics, which aims for ‘certainty’ in choosing what course of action we should take, using simulations, mathematical models, and machine learning.
So, descriptive analytics is – relatively speaking – easy. Modern data and business intelligence tools like PowerBI and Tableau allow us to collate, analyze, and interpret vast amounts of data to describe events.
And Prescriptive Analytics is clearly the end goal – to approach certainty in our analysis.
With Predictive Analytics, we hope to bridge the gap.
Focus on Predictive Analytics
Predictive analytics starts with current and historical data and searches for patterns. The presumption is that patterns that have repeated, may repeat again.
If we can make a prediction, we can deploy project resources to prepare for future threats and opportunities. This is valuable to us in planning, risk management, and business case evaluation.
Predictive analytics techniques are widely used in industries and disciplines, like financial services and insurance, pharmaceuticals, marketing – particularly in consumer businesses, and weather forecasting.
Predictive Analytics uses methodologies like decision trees, regression analysis, and neural networks. So, although predictive analytics is not the same as machine learning, machine learning software is used in predictive analytics. It was recently reported that Machine learning models are faster and more accurate in forecasting major weather events, and can do so one, two, or even three days further ahead than the vast systems modeling approaches we have been developing over the course of my lifetime.
Predictive Analytics in Project Management
The obvious arena for predictive analytics in the Project Management domain is scheduling. Here, machine learning tools can assimilate data from hundreds or even thousands of project schedules and their outcomes.
From this, they can not only develop viable schedules, but also highlight the places where the schedule is most likely to be at risk.
And, if we collect performance data in real-time, predictive analytics tools can update risk assessments and schedules in real-time too.
But it goes further. In the construction sector, there is a strong dependency between the project schedule and the weather. But we already know that machine learning is getting good at weather forecasting, meaning real-time schedule adjustments can take account of the way weather systems are evolving.
The Deloitte Approach to Managing Project Risk with Predictive Analytics
The other main arena for predictive analytics in project management at the moment is in risk management. Deloitte has a five-stage methodology for managing project risk with predictive analytics at its heart:
- Assess inherent project complexity and risk
- Conduct structured interviews and a full document review
- Carry out a project review using a predictive analytics tool
- Analyze the output and identify improvements to your risk controls
- Report on findings and recommendations
Deloitte claims that Predictive Project Analytics has helped organizations bring over $120 billion of project investment to a successful and effective conclusion.
Recommended Articles and Videos to Help with Using AI in Project Management
Carefully curated recommendations for you:
- What is Artificial Intelligence (AI)? | Video
- How will Artificial Intelligence Impact the PM Profession?
- How can AI Transform Project Management? | Video
- Decision-Making AI for Project Portfolios – with Stuart Easton | Video
- How to Use Machine Learning in Project Estimating, Scheduling, & Planning
- Can AI Really Predict Project Outcomes? Conversation with Lloyd Skinner of Greyfly.ai
- How AI Knowledge will Help Your Project Management Career
- How to Pivot Your Career to AI – Artificial Intelligence Career
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