By: Ravi Gupta, Senior Director, Data Analytics Services
Prediction according to Merrium Webster Dictionary is an art of declaring or indicating in advance especially foretelling based on observation, experience or scientific reason. By harnessing the data and with the help of machine learning techniques, we can make more informed choices and gain a competitive edge. Here are some key steps to effectively predict the future with data using classification model:
DEFINING THE SCOPE
This is important to understand the objective and understanding the problem statement.
This step involves gathering data that is relevant to the objective or the scope. This could include historical data, market trends, customer behavior, or any other information that might be useful.
This step involves identifying patterns, correlations, and trends. This step is to understand the variables, data patterns and consistency.
This step is to clean and transform the data for the model to understand. It’s important to remove errors, missing values, and outliers. This step ensures that the predictions are based on reliable information. This step involves combining data from multiple sources and create an analytical base table having all relevant information in a single data set.
In this step, we select an appropriate predictive model for the data. There are various machine learning algorithms available, such as logistic regression, decision trees, random forest, Gradient boosting and neural networks. The choice of model depends on the nature of the data and the prediction task.
TRAIN AND TEST THE MODEL
Here we divide the data into a training set and a testing set. Train predictive model on the training data and evaluate its performance on the testing data. This step helps assess how well the model can make accurate predictions.
This step is to identify the most relevant features (variables) that have the most impact on the predictions. Feature engineering involves selecting, transforming, or creating new features to improve the model’s accuracy.
This is to Fine-tune the model by adjusting its parameters and applying regularization techniques to prevent overfitting. Optimization ensures that the model generalizes well to new, unseen data. Several out-of-time tests to check accuracy at different time period in the history to finalize the most optimum algorithm.
Once the model is trained and validated, It can be used to make predictions on new data. This could involve predicting customer preferences, or employee attrition.
MONITOR AND RE-CALIBRATION
Continuously monitor the performance of the predictive model. Data and circumstances can change over time, so it’s essential to recalibrate the model as needed to maintain its accuracy.
Predicting the future with data is a dynamic and iterative process that requires a combination of technical skills, domain knowledge, and statistical skills. By following these steps, we can harness the power of data to predict the future based on historical trends to produce probabilities of the likelihood of an event.