It is a data-driven world and almost all forward thinking business organizations are leveraging data to conduct their business. Whether it is internal process improvement or streamlining the supply chain, organizations have realized that in order to function to their optimal capabilities they have to look at the story the data at their disposal is telling. It is because of this that business analytics has established itself as a strong pillar within the walls of organizations and corporations across the globe. The testament to this adoption is the Business Analytics market which is growing exponentially and is expected to be worth approximately USD$$67 Million by 2019.
Why Do We Need Data Visualization?
Given that the sheer volume of information generated every second is enormous, businesses need to learn to leverage this real-time data to improve their decision-making processes. Having said this, it is also true that data is of value only when it can be understood and used actively by all business users irrespective of their technology and data interpretation competence. This is where data visualization comes into the picture.
In order to gain real value from the data, it has to be presented in a format that the average business user can leverage. Business executives, managers, business leaders all should be able to derive meaning from the insights presented by their business analytics tool so that they can use this data to their advantage. Data Visualization takes the numbers from the data and visually translates this data into sophisticated formats such as infographics, pie and fever charts, maps, heat maps and sparklines etc. to communicate the relationship between the data values at play. It is because of these visual representations that data users can identify contexts, patterns, and trends that can easily go unrecognized in text-based data. Data visualization brings a lot of creativity to data and manages to engage the user by helping them grasp difficult concepts faster.
The Business Benefits of Data Visualization
One of the greatest advantages that data visualization offers is that it allows businesses to convey complicated concepts in a universal manner and allows the users to experiment with different scenarios using only slight adjustments. Here’s a look at how data visualization quantifiably helps a business.
It is far easier to process information when it is presented through bars and charts than when it is presented in a spreadsheet. Data visualization takes the complexity of data and presents it in a format that is easier to process by the human brain. Using these visualizations, it becomes easier to find connections between multiple data sets which enable the users to find information that they need in a timely manner and, thus, use it more productively to improve operational and business conditions. Since data visualization adds a narrative to data, it provides more information and insights than the traditional KPI’s such as your net profit margins – it, thus, makes itself useful to a much broader audience which helps in bringing in fresh insights.
Data visualization effectively helps its users to see connections and identify patterns that impact the company bottom line. For example, an organization might use data to see that their sales numbers for the quarter have declined. However, when they employ data visualization they can understand why this incident occurred. A visual representation of this data could project that for this company, the cost of the product might have increased while the price that the customers were willing to pay had reduced. Data visualization helps the organization identify points that impact operating connections which have a direct impact on business outcomes. Using this multi-faceted view, business leaders can identify the root cause of a problem and then take the necessary measures to improve them.
Faster Response Time
Given the dynamic market we exist in, it becomes imperative that businesses have to adopt a proactive and not a reactive approach to market conditions. Using data visualization, organizations can glean intelligent insights about their consumers and the market conditions and change their business propositions accordingly. Data visualization tools have the capability of sorting, filtering and drilling down data collected from disparate sources and provide accurate visual representations to provide insights that can have a tangible business impact. Using these techniques, it becomes infinitely easier to identify shifts in market dynamics, customer behaviors and identify emerging opportunities faster and improve their response time to these conditions.
Make Correlations Between Operations and Business Activities
In a highly competitive business environment, it becomes essential to find connections and correlations between operating conditions and business performance. Timely identification of these conditions helps business executives identify factors that influenced business productivity in a positive or negative way. Data visualization allows for comparison between historical data as collected in key performance metrics and allows the users to compare it with current data – this gives business executives the insights to identify elements that impact business outcomes both positively and negatively.
Increased Level of Data Interaction = Better Business Insights
With the volume of data expected to cross 400 zettabytes by 2020, it is clear that this data is only going to be useful if businesses can derive actionable insights from them. Presenting large data volumes in a tabular format not only makes it exceptionally difficult to identify hidden or emerging patterns but also makes it difficult to manipulate. Data visualization takes this pain out of analytics and not only presents the data in a manner that is far easier to comprehend but also allows the users to directly interact with it using data visualization tools. Using data visualization radius maps, for example, you can easily understand data in relation to its proximity to other data influencers. A heat map could easily show which products or sales locations are performing better than the others and also help the users understand why. When the business users can interact comfortably with data then they are in a better position to not only seek answers to the ‘what’ but also get answers to the ‘why’ ‘where’ and ‘how’. This helps greatly in improving revenue opportunities for the organization.
A study conducted recently by Prysm, Inc. revealed that people retain almost 65% of the information given to them when it is presented in a visual format. Given the rising need for collaboration between teams today, data visualization gives teams the opportunity to present information that is coherent to all its users – right from engineers to the executives. Data visualization insights can also be distributed easily over smartphones which also becomes a driver of collaboration. Once the speed of information flows faster, teams become more equipped to interact with each other faster and in a cohesive manner. All these things help in promoting collaboration and help in improving decision making.
To put it quite simply, data visualization gives businesses the competency to discover solutions faster, explore patterns and improves the decision-making process. After all, a picture is always worth a thousand words.