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Descriptive vs Predictive Analytics

Descriptive analytics and predictive analytics represent two distinct positions on the analytics spectrum. Descriptive analytics summarises historical data to explain what happened — the foundation of standard management reporting, dashboards, and KPI monitoring. Predictive analytics uses statistical methods and machine learning on historical patterns to forecast what is likely to happen in the future. A third category, prescriptive analytics, goes further to recommend what actions should be taken. Most business reporting environments begin with descriptive analytics before building predictive capabilities on top.

Why This Matters

Understanding where an organisation sits on the analytics spectrum helps define both the current state of its analytical capability and the path to greater maturity. Organisations that rely exclusively on descriptive analytics are limited to understanding their past — valuable, but insufficient for proactive management. Moving along the spectrum toward predictive and prescriptive capabilities represents a qualitative improvement in the organisation’s ability to anticipate challenges and opportunities rather than only recognising them in retrospect.

Where This Fits

This term sits within the BI & AI area of Performance & Control.

To be added when relevant Knowledge Hub articles are published

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