According to research done by Forrester Consulting, almost half of the financial executives around the world still rely on conventional tools such as spreadsheets and PowerPoint for deriving data-related insights. At the same time, about 28% of them have reported employing advanced tools such as machine learning as the primary means of gaining data insights along with using predictive analytics, ERP, and CRM tools as well. Data visualization technology has opened up new possibilities for enterprises for understanding complex information in an easy and digestible way. Organizations are slowly realizing the value and the vast potential offered by data visualization tools and by employing some of the best practices, they can reap huge rewards for their business in return.
Let’s take a close look to learn more about data visualization and how it can be used effectively by companies to boost their growth prospects:
What is Data visualization and why is it important?
Data visualization enables presentation of quantitative data into graphical format. It helps in turning small and large datasets into a visual format, which is easier to grasp for humans.
Human brains are programmed to assimilate visual information far more quickly and easily as compared to text-based information. The findings by researchers from the Pennsylvania School of Medicine suggest that human retina has capabilities of transmitting data up to 10 million bits per second. Almost 65% of the population are highly receptive to visual images and spatial relationships when compared to textual information.
Here are some of the top reasons why enterprises are choosing data visualization:
To enable processing of large amounts of data
Data visualization makes it possible to comprehend information easily and quickly through a graphical representation of information. As a result, businesses are able to view large amounts of data clearly and derive more meaningful insights and conclusions using this information as well as gain better understanding into the working of their business operations.
To provide actionable insights on business
With the changing market conditions and the challenges posed by the business environment, business executives can no longer rely on traditional methods such as spreadsheets-based reporting to take decisions. They need real-time and actionable insights on financial, operational, customer, and market data to take quick decisions and stay ahead of their competitors. Data visualization tools allow decision-makers to view dynamic correlations among data sets while providing them the ability to manipulate and discover data more directly and at a deeper level.
For quick and easy assimilation of information
Using unique ways of data viewing through heat maps, bullet charts, and other forms of graphical presentation, data visualization tools allow to view large amounts of information about existing business and operational conditions. This enabled business decision-makers to view the relationship between multi-dimensional data sets. Managers that use data visualization tools are much likely to find relevant data easily as compared to static dashboards or reporting.
To help in identifying the latest trends
Data visualization offers unique possibilities to view historical trends in business for measuring core performance metrics such as monthly sales for business. Companies can assess and compare their present performance in relation to the past performance and find out areas for improvement. With data visualization, it’s possible to identify the dynamic changes in customer behavior and market behavior and quickly respond and adapt to the new business trends.
Top Data Visualization Best Practices to Ensure Business Success
Assess and understand your audience
Data visualization must be able to drive targeted users and inspire them to take meaningful actions. Identify the right persona whom you are targeting while creating dashboards and think who might be looking at your data in the first place. Make sure that your visualization has meaningful and actionable content and define the resulting actions that you expect the end users to take after viewing your dashboard.
Choose the right dashboards
At a high level, there are primarily three types of dashboards – operational, strategic and analytical which may be classified based on their specific traits. Choose the most appropriate one which can help in guiding the decisions for your dashboard designs.
Make visualizations and dashboards simple and engaging
For creating the maximum impact on the users, the content of the dashboards needs to be appealing and easily understood by your target audience. By doing this, the users will be able to grasp even high-level and complex information easily with quick access when needed. At the same time, choosing the right visuals based on your data might be helpful in sharing the information. For example, simple things like line charts may be used to track trends over a period of time and bar charts may be used for comparing quantities in different categories.
Use effective storytelling for better representation
Effective communication for correct interpretation of data is essential for conveying the right information to your end users. Symbolic representation needs to be clear and concise for human brains to perceive visual information. Besides, the type of visualization used for communicating the story also needs to be powerful. Multiple visuals along with commentaries may also be used for telling a deeper story than using single visuals alone to create a greater impact on the users.
Use an interactive approach for designing
Data visualization requires a thorough understanding of the visual concepts that your end users have perceived and the ability to fulfill their needs. In reality, it is quite challenging to accomplish this task so the best approach would be to get the bulk of requirements and design proofs of concept along with prototypes and get the feedback from the users through direct interaction.
Incorporate future changes and innovation in technologies
Businesses need to constantly explore new, accurate, and meaningful ways of representing stories using new forms of media, emerging technologies, and visuals. For example, Google used radial spoke graph to display cyclical patterns representing food patterns using an interactive diagram – Rhythm of Food that enabled users to explore data which was of specific interest to them and get more information on it. Similarly, you can find out new ways to present the data in a different format to capture the interest of your viewers.