Question

How are prescriptive and predictive analytics different from descriptive analytics?

Answer 1

Descriptive: Standard types of reporting that describe current situations and problems.

Predictive: Simulation and modeling techniques that identify trends and portend outcomes of actions taken.

Prescriptive: Optimizing clinical, financial, and other outcomes.

Descriptive Analytics, which use data aggregation and data mining to provide insight into the past and answer: “What has happened?”

Predictive Analytics, which use statistical models and forecasting techniques to understand the future and answer: “What could happen?”

Prescriptive Analytics, which use optimization and simulation algorithms to advise on possible outcomes and answer: “What should we do?”

Descriptive Analytics: Insight into the past.

Predictive Analytics: Understanding the future.

Prescriptive Analytics: Advise on possible outcomes.

So by the above differences we can clearly say that prescriptive, predictive are different from descriptive analysis.

Descriptive is to Predictive as Accounting is to Economics. Seriously though, the main difference is that Predictive is centered around statistical models allowing prediction of future outcomes and is concerned about confidence in such predictions. While Descriptive is centered around data presentation, slicing&dicing, management oversight. You might say that Descriptive is to tell what is, while Predictive is to answer what if.

Thank you.