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Predictive Analytics with SAP

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Investment manager analyzes financial reports and KPIs of the stock market using graphs on his computer and business intelligence analytics.

Predictive analytics makes developments predictable and lets users make better or at least data-based decisions. With SAP Predictive Analytics and the SAP Analytics Cloud, there are two software solutions from SAP that offer such functions.

Definition: What is Predictive Analytics?

Predictive analytics belongs to the field of data science. It uses methods from mathematics, computer science and statistics to find patterns in large data sets. Based on this historical data, algorithms can then generate predictions about the future. The more extensive the "training material" (i.e., the database), the more precise the forecasts. 

Predictive analytics provides companies with accurate forecasts of future developments and events. Forecasts can be made for a wide variety of issues. These include, for example, customer behavior, general business development and market demand. Companies can use this enriched information to adapt to situations much earlier and in a more targeted manner, before they have to take concrete action.

How does predictive analytics work?

Predictive analytics uses prediction models (or predictive models). Using methods from mathematics and computer science, such models can predict an event or outcome with high probability. Historical data is used to train a model that predicts an outcome based on changes to the inputs. Tests and checks can be used to determine the accuracy of the prediction models and then improve them.


Managers can use historical data from annual financial statements and perhaps enrich it with data from the entire industry. Properly applied, revenues and expenses can then be extrapolated to create a valid plan for business development in the following year.

What are the benefits of predictive analytics?

The great advantage of predictive analytics is that companies no longer have to base their decisions solely on the past. Instead, they can include the current situation and predictions. This enables them to plan more precisely, use resources more efficiently and identify trends at an early stage.

If a software solution is used for such analyses, the creation and administration is simplified. Predefined models can be used directly and analyses can thus be automated. Required forecasts are available in a short time (possibly in real time). Users can quickly apply the clear dashboards in planning.

For whom is predictive analytics suitable?

Predictive analytics is relevant for virtually every company, unless there is enough available data, that can be analyzed. This is also referred to as Big Data, because the amount of data must be extensive in order for predictions to be made. If enough data is available, a company can use predictive analytics in any area, for example in logistics for the anticipated development of inventories or in marketing for purchasing behavior.

What software is available from SAP for predictive analytics?

Currently, two solutions from SAP are in use, the older one is called SAP Predictive Analytics, the successor solution is SAP Analytics Cloud.

SAP Predictive Analytics

What is SAP Predictive Analytics?

As the name suggests, SAP Predictive Analytics is a software for predictive analyses from SAP. Unlike classic analyses, which deal with events of the past, predictive analytics looks into the future. The approach answers not only the question of what has happened, but what is likely to happen.

What functions does SAP Predictive Analytics offer?

SAP Predictive Analytics includes many functions. Here we mention only the individual categories:

  • Automated Analytics
  • Expert Analytics
  • Model Management (Predictive Factory)
  • Data Management
  • Predictive Scoring
  • Social Media Analytics
  • Product recommendations
  • Visualization


What are the advantages and disadvantages of SAP Predictive Analytics?

SAP Predictive Analytics has allowed users to create comprehensive analyses and make forecasts about future developments. However, it is important to know that due to SAP's cloud-first strategy, SAP Predictive Analytics will no longer be developed further. Companies that want to use predictive functions should therefore switch to the SAP Analytics Cloud.

SAP Analytics Cloud

What is the SAP Analytics Cloud?

SAP Analytics Cloud (SAC) is a solution from SAP that provides analyses, including those on future development. The cloud- or web-based software is characterized by the fact that it can use and analyze external data sources - even non-SAP systems - in addition to internal data.

What features does the SAP Analytics Cloud offer?

The functional scope of the SAP Analytics Cloud is very large, but can be roughly divided into three areas:

  • With the functions in the Business Intelligence (BI) users can collect, evaluate and visualize data. An important advantage here are the self-service dashboards that users can put together themselves.
  • With the new planningfunctions, users can directly use data in planning versions. According to SAP, this enables a simple step from reporting to planning without changing media.
  • The functions in the area Predictive Analytics are used to predict developments. Forecast models can be created here with the help of machine learning or artificial intelligence. In addition, alternative courses of action can be simulated. 


What are the advantages and disadvantages of SAP Analytics Cloud?

With its flexible integration of data and rapid analyses, SAP Analytics Cloud is a comprehensive solution. For companies using SAP solutions (especially in conjunction with the HANA database), the software offers comprehensive analysis and evaluation options. Questions about the company's current situation and future development can thus be answered quickly.

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