Problem understanding and definition

Goal: Understand the problem and how the potential solution would look. Also, define the requirements for solving the problem.

This is the first stage in the process. This is a key stage because here we establish together with the stakeholders what the objectives of the predictive model are—which is the problem that needs to be solved and how the solution looks from the business perspective.

In this phase, you also establish explicitly the requirements for the project. The requirements should be in terms of inputs: what the data needed for producing the solution is, in what format it is needed, how much data is needed, and so on. You also discuss what the outputs of the analysis and predictive model will look like and how they provide solutions for the problems that are being discussed. We will discuss much more about this phase in the next chapter.