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Predictive Analytics
“Seeing Around Corners”By
Dean Whittaker, CEcD
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Learning Objectives
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• Not recession but transformation: Edie Weiner at TEDxMidwest
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Time
Event
Linear Thinking in a Cyclical World
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Exponential Rate of Change
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Giving Information Meaning©
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Evolution of Decision-Making
PA
Bus. Intel.
Data Warehouse
Data
Predictive Analytics
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BIG Data
• What is it?• Why should you care?
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Data, Data, Who’s Got the Data?
• Got to have it!• Who’s got it?• How good is it?
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Big Data in Economic Development
• Zoomprospector.com • Sizeup.com
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Business Intelligence
• Predicting Corporate Behavior– Behavior linked to history– Accuracy is a function of data available– Rational Behavior? – Cyclical?
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Predictive Analytics
• What is it that you would benefit from knowing ahead of time?
• Is there data that is plausibly correlated to that which you wish to predict?
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Correlated Vs. Causal
• Is it Causal?– Relationship in which one variable causes
another
• Or is it correlated?– Relationship of two variables and the
degree to which they vary together
• Correlation does not imply causation
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What is Predictive Analytics?
• Predictive analytics encompasses a variety of statistical techniques from modeling, machine learning, data mining, and game theory that analyze current and historical facts to make predictions about future events.
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Predicting Corporate Behavior
• Key Drivers– Change• Leadership• Ownership• New Product/Service• Merger/Acquisition• Changes in Sales• Changes in Employment
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(C) Whittaker Associates, Inc. 2013 16
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The Story of Sir Walter
The evolution of Sir Walter from a simple database into a web-based lead tracking system
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The Story of Sir Walter
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The Story of Sir Walter (cont.)
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The Story of Sir Walter (cont.)
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The Story of Sir Walter (cont.)
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The Story of Sir Walter (cont.)
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The Story of Sir Walter (cont.)
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The Story of Sir Walter (cont.)
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Walter Test Data
Company Recent IPO
M&A
Sales Growth %
Emp. Growth %
Real Estate Requirement
Intellicom, Inc.
No No
54 0 No
Red Hat, Inc.
Yes No
17.2
24.4
Yes
Chimerix, Inc.
Yes No
178.6
N/A
Yes
Fuentek, LLC
No No
110.0
N/A
No
Cicero, Inc.
No No
84.3
0 No
MCNC No No
579.0
N/A
No
PowerSecure
Pending
No
24.6
26.7
No
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Corporate Life Cycle
Phases• Launch• Growth• Maturation• Decline
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Exercise I
• Business at Risk – An Early Warning System– Identify five “leading” factors in their
business environment and five within the company that would indicate a company is at risk of closing or laying off a significant number of employees.
– Weigh each of the factors by their relative importance in being predictive.
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What is Predictive Analytics?
• Predictive analytics is a process by which those who have are compared to those who might to predict those who will.
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Building a Predictive Model
•DIY•11 Ants Analytics Model Builder•Tableau Software•RapidMiner•R and Rattle
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Source: CRISP DM
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Building a Predictive Model
• 11 Ants Analytics Analyzer
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Three Types of Predictions
• Numbers – job growth• Categories – behavior • Propensity – probability to occur
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Number
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Category
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Propensity
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11Ants Analytics
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Exercise II
• Build a Community Economic Barometer– Identify five “real time” factors that could
be measured to create a real time view of the local economy.
– Identify five “leading” indicators that would forecast future economic performance.
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Economic Barometer
• Measuring the Economy– Usage of Resources• Electricity• Gas• People• Raw materials• Transportation
– Movement of goods and people
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Disruptive Economic Development
Disruptive Economic Development
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Putting It All Together
• 1. Gain an understanding of the strategic use of Predictive Analytics to make smarter business decisions.
• 2. See an example of a data mining and analytics model used to predict corporate behavior.
• 3. Learn how an algorithm and social media are used in a predictive model to identify business opportunities.
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Take Away?
• What stuck?• What is useful?• Now what?
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hank You!
Dean WhittakerWhittaker Associates, Inc.1121 Ottawa Beach Road, Suite 200Holland, MI 49424616-786-2500
www.whittakerassociates.com [email protected]
Thank You!
