Data is one of the most valuable resources for businesses. Businesses typically utilize data to understand their performance and improve it, but it is essential to communicate, display, or visualize the data flawlessly. Data visualization is the visual representation of data through various techniques. Businesses are now adopting top data visualization software tools to achieve perfect data visualization and take full advantage of this vital asset. This News Story explains how data visualization can transform businesses in years to come.
The News:
- The total amount of data created, captured, copied, and consumed globally will grow to more than 180 zettabytes by 2025.
- Poor data quality annually costs the US economy up to 3.1 trillion USD.
- Numerous studies have confirmed that around 65% of the world’s population are visual learners, and humans can process visuals 60,000 times faster than text.
- According to various popular studies, visual language improves problem-solving effectiveness by around 19% and produces 22% higher results in almost 13% less time.
- According to Forbes, 95% of businesses cite the need to manage unstructured data as a problem for their business.
- The global big data market is forecasted to reach 103 billion USD by 2027.
- The global big data analytics market will grow at a compound annual growth rate (CAGR) of almost 30%, with revenue reaching over 68 billion USD by 2025.
- By 2025, the big data analytics market in healthcare alone will reach $67.82 billion USD, and in banking, it will reach $62.10 billion USD.
- 97.2% of organizations are investing in big data and artificial intelligence (AI).
- A well-known study by Cornell University found that when a scientific claim is presented in pure words or numbers, 68% of people believe that the information is accurate and truthful. In contrast, if you put a simple graph with the claim, this number rises to 97%.
- The total global data visualization market revenue will rise to 7.76 billion USD by 2023; by 2027, the data visualization market worth is forecasted to be $19.20 billion USD.
- According to Gartner, data storytelling will be the most widespread means of consuming analytics by 2025.
How did we get here?
#1. Top Data Visualization Challenges for Businesses
Data is a precious asset for businesses if managed and leveraged properly. Here are the common data visualization challenges that reduce the efficacy of valuable business data.
- Business managers find it challenging to maintain data integrity and accuracy while presenting voluminous data as manual representation is prone to errors that can modify data, impact its accuracy, and prove detrimental to business.
- When dealing with volumes of data, the human brain finds it difficult to identify patterns and errors. It directly impacts the results of data analysis. Excellent data visualization through top tools like Zoho Analytics can help identify these patterns, find the errors/anomalies, and achieve better analysis.
- Textual data is not easy to understand and remember. Managers thus need to ensure that the information is presented or visualized in the most comprehensible manner to achieve the desired results.
- Voluminous data needs to be represented in a contracted form, which is not possible with textual or statistical representation.
- Time is money for businesses. Business data is complex and difficult to compile and discuss during meetings and presentations that too in a limited time frame. So, managers typically struggle to share and present more and more data in the least time.
- Another big challenge that presenters face is finding the perfect way of presenting data that the audience can remember and retain correctly. If presented data cannot be retained well, it cannot result in intelligent decision-making.
- Presenting the correct data is not enough; if the data representation is not engaging, the audience will not find it interesting and valuable enough to generate insights from the same.
- Different data types have different visualization needs; for example, for expressing/visualizing percentage data, pie charts are more explanatory and suitable, but these may not be suitable for complex data comparisons, for which bar charts are the best. Similarly, map representation is ideal for analyzing and displaying geographically related data. In the absence of software tools, managers thus struggle hard to learn and leverage the right data visualization technique.
#2. Why Is Data Visualization Important for Your Business?
Data visualization helps businesses resolve the numerous challenges discussed above. It offers enormous advantages to businesses. Here are the top ways data visualization can benefit businesses.
Better Data Representation
Data is better perceived when presented in visual form than textual. Data visualization thus helps the presenter communicate information most effectively and in less time. Data visualization also helps maintain data integrity and accuracy when done through software tools.
Enhanced Data Capture
Data can be well utilized only when the audience perceives, captures, understands, and remembers it. Data visualization aids in not just presenting the data better, but also enables the target audience to better grasp or capture the presented data so that it can be effectively leveraged.
Understanding Customer Behavior and Market Trends
Businesses constantly crave to know what the customers want, and their needs rapidly change. Customer behavior and market trends are crucial for business success. Analyzing these changes in customer preferences and market trends can help businesses improve their product and plan their inventory. Data visualization helps business managers better understand, analyze, and communicate to their relevant teams about the changing customer behavior and market trends and modify their business strategies accordingly.
Relationship Analysis
Data visualization helps present data in a contracted and comprehensible way. This compact data representation helps in identifying data patterns and relationships. Relationship analysis enables uncovering unexpected links and dependencies of certain elements with others; for example, a sales graph indicating that the sales for a business increased exorbitantly as soon as the company launched a particular paid-per-click (PPC) campaign, and the rise was much higher compared to the results of many new initiatives taken.
Scenario Modeling
Data visualization helps in better risk simulation, projection, and scenario building. For example, Experian recently developed a data visualization for Covid-19, the U.S. Business Risk Index, to enable businesses to visualize the impact of the pandemic from various impact scenarios and assess how the crisis could unfold across geographies and industrial sectors.
Improved Decision Making
Data visualization enables better presentation and grasp of valuable data. When the managers and their teams understand the data correctly, they can provide better business intelligence insights and suggestions for decision-making. Thus, data visualization helps in intelligent, reliable, and data-backed informed decision-making. Moreover, software tools like Tableau make data visualization effortless and more beneficial for business analysts.
Fraud Detection
As data visualization enables quicker and better identification of data structures, patterns, and relationships, it helps detect anomalous and suspicious patterns hidden in voluminous amounts of data. Thus, data visualization plays a significant role in fraud detection and works as a remarkable security tool.
Boost in Business Profits
With all the above benefits, data visualization helps businesses utilize data better, save time, reduce costs, and make better decisions, thus enabling a gradual boost in business profits in the longer run.
#3. Top Data Visualization Techniques for Businesses
As discussed, data visualization benefits companies in numerous ways. However, it is crucial to know the trending data visualization techniques and choose the right technique for your purpose to take full advantage of data visualization. Here is a list of the top data visualization techniques that businesses can leverage to enhance their performance.
- Pie Chart is a simple data visualization technique meant to display information like proportions, percentages, or part-to-whole comparisons that are not complex.
- Bar Chart is a trending visualization technique consisting of simple graphs with categories on one axis and values on the other.
- Line Plots or linear graphs are used to depict a trend in data over a time interval.
- Maps, including heatmaps and dot maps, are used to represent intensity, enable better visualization, and classification of geographic data, by highlighting crucial areas using multiple colors, for example, displaying the population density of various countries in a continent.
- Scatter Plots or scattergrams are used to determine and depict correlations/relationships between variables; for example, height increases with weight.
- Histogram data visualization is typically used to portray the frequency of occurrence or data distribution over a defined/continuous interval.
- Timeline is a linear visualization technique used to display a sequence of events on a single line in chronological order.
- Gantt Chart is a complex timeline data visualization technique with a two-dimensional representation of project schedules displaying a sequence of tasks with their dependencies.
- Waterfall Chart or Cascade Chart is used to display positive and negative changes and their overall impact/values over a period of time, for example, to visualize profit and loss statements, inventory, and sales.
- Word Cloud is a visual representation of words, highlighting the importance of words with different fonts, like bigger fonts to highlight more important words and tapering/smaller fonts for less important words.
- Pictogram Chart uses image representations like icons or pictographs to visualize data, for example, a weather forecast displaying the Sun for a sunny day and clouds for the possibility of rain.
- Correlation Matrices display the correlation between multiple variables and the strength of their relationship. These are typically used to summarize volumes of data to identify and visualize the data patterns; for example, to visualize the correlation between how many hours a student spends studying and sleeping with his performance in the exams.
- Network Diagram is used to display tasks, their sequence, and task dependencies using nodes and links with values to denote their relationship.
How to Choose the Right Data Visualization Technique for Your Business?
Here are the crucial factors to consider while choosing the right data visualization technique for your business data.
- Understand the data type: The data type is the most critical factor for selecting the data visualization technique. Thus, analyze your data type and its complexity in detail and choose accordingly; for example, bar charts are appropriate for comparisons, and timeline charts cannot represent complex schedules the way Gantt charts do.
- Analyze your target audience: If the prospective audience is less skilled, technologically challenged, or less experienced with complex visualizations, simple graphs and charts can be more explanatory instead of advanced two or three-dimensional visualizations.
- Identify the purpose: Selecting the proper visualization technique also depends on the specific purpose of data visualization. There are numerous specialized charts available, meant for particular purposes; for example, maps are appropriate to represent geographic data. Similarly, Gantt charts are specially designed for project managers to display project schedules and timelines. Opting for such specialized techniques ensures enhanced efficacy of data visualization for your business, provided these satisfy the other parameters, including the data type and target audience.
What’s Next?
Visual representation of data or visualization makes data easy to express for the communicator and more perceivable and engaging for the audience. It saves time, aids intelligent decision-making, and proves profitable for businesses in the long run. The future can see various business intelligence software with the capacity to stand as a single tool that can integrate data modeling and data visualization.
As rightly quoted by Dante Vitagliano,
“Data visualization is the language of decision making. Good charts effectively convey information. Great charts enable, inform, and improve decision making."
Data visualization software tools like Power BI, Whatagraph, Qlik Sense, and more enable enhanced data visualization, consuming less time and effort, conserving resources, and reducing overall costs for businesses. Businesses thus must no longer ignore the importance of data visualization. So, adopt the right data visualization tools and techniques to achieve perfect data visualization and gain a competitive advantage over your competitors.
