Excel’s Advantages for Predictive Analytics

83

Predictive analytics uses statistics, modeling, machine learning, and other methods to analyze current data to make predictions about future.Predictive Analytics is one of 4 Technologies That Are Reshaping Business Intelligence, according to an article in Information Week.

“Predictive analytics,” the article said, “is a white-hot growth segment that got hotter with IBM’s $1.2 billion deal to buy SPSS, a company that uses algorithms and combinations of calculations to spot trends, risks, and opportunities in ways not possible with historical reporting.”

I’ve not used SPSS for many years. But I’m sure that it’s still a great product with tremendous power. Even so, from an 80-20 perspective, Excel can give you several advantages over SPSS and other “real” tools for Predictive Analytics:

  • Your Excel models can use data from any source, because — one way or the other — you can open, copy, or enter any data into Excel.
  • You can use a wide variety of built-in statistical functions to analyze your data. And you can buy Excel add-ins that offer even more analytical power.
  • You don’t have to get the IT department involved with your Excel work.
  • You have infinite flexibility in how you report your results.
  • You already own Excel, so the software is free.
  • You already know how to use Excel.

You might question the last advantage in this list, because you might only be an Excel beginner. However, if you buy an analytics program you would have to spend a lot of time to learn about it. This would make you a beginner in two programs, Excel and the analytics package. On the other hand, if you spent the same effort learning a lot more about Excel, you probably would be a lot more useful to your current or future employers.

If you’re using Excel for predictive analytics, let me know.