February 10, 2023

What is Data Visualization & Why is it Important?

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Key takeaways

  • Have proof that a minor product adjustment will reduce overhead by 50%? Visualization is the difference between more numbers on a spreadsheet and being impossible to ignore.
  • Visualizations are key to helping share information that would be otherwise difficult for most people to process.

Numbers are great. People aren’t always great at making sense of them (or putting them to good use). Ensuring you have quality data visualizations can help your employees and clients better understand your business. So, why is data visualization so important?

Computers are far better at this than humans. Their base language is literally numeric in nature. Which can make words, images, and sounds harder for them to parse.

What is data visualization?

The same dilemma faces businesses that want to leverage data and analytics to improve their processes. The key here is using the machine to pre-digest the data, and output it in a format that the wetware can grasp with ease. We call this Data Visualization.

Here are three compelling reasons your business needs stunning data visualizations.

ALSO READ: How to Optimize Your Data Visualizations

Data visualizations are easier to understand

Playing with blocks

Our brains have limits on how much they can learn, think about, and remember. So, humans evolved to use some hacks to compensate. The go-to tactic is “putting things in boxes.”

Phone numbers illustrate this well. Long strings of numbers aren’t very user-friendly, so we break them up into blocks to make memorizing them easier. In the US, for example, numbers are hyphenated into three sections: 555-555-5555.

Making numbers matter

Even the most practiced mathematicians will start to see spreadsheet cells blend together after a thousand rows or so. No one can be expected to be handed a mountain of unorganized data and understand what it all means.

Data visualizations provide the means to more efficiently communicate insights from all the number crunching. Thousands of data points might not be easy to remember, but a single stat or pie chart is more likely to be treated as its own block in working memory.

Context and relevance

Here’s how data visualization can make this happen.

First, the process uses graphs, charts, and other forms of visualization, shifting the burden of parsing the information from the reader to the machine (a system better suited for comparing countless abstract numerical figures). This frees up the reader to simply consider the ramifications of the data. In other words, it provides context.

Without benchmarks against which we can measure numbers, understanding their value is difficult. This is the same problem experienced when temperature is being compared between the Fahrenheit and Celcius scales. Forty degrees can either be sweltering or chilly depending on your frame of reference.

Second, data visualizations let the machine handle all the parsing. Using visualization tools to present that information, it’s much easier to strip away irrelevant data and findings — because not everyone will benefit from every pie chart. Presenting the data that’s most valuable to a given audience highlights the most important or urgent info.

Bottom line: Data visualizations provide context and relevance, simplifying your message, and promoting comprehension across a wider audience.

ALSO READ: Top Tableau Alternatives for Data Visualization and Analysis

Data visualizations are easier to share

Images, catchy quotes, and well-chosen sound bites are a lot easier to share than lengthy reports, articles, or rants. Social media pros have been leveraging this fact for years, and data visualizations offer the same solution to analytics teams.

Whether you’re sharing findings with your internal team, an entire organization, or an even wider external audience, the data will have greater reach if it’s easy to reference. No employee is going to pin a 12-page report to their office wall. Even if they did, there’s no way for them to effectively leverage that information in their day-to-day efforts.

An easy-to-read graph, however, or a short list of powerful statistics … that’s a different story.

Data visualizations are easier to use

The goal here is for the data to affect and guide future decisions. Data visualizations help here, too, and largely for the reasons already discussed. Removing the excuses of “I didn’t know” and “it’s too complex” drastically improves the odds that the insights will actually generate positive results.

When data is visualized in an approachable format:

  • It’s easier to understand.
  • Audiences digest it faster.
  • Sharing happens more readily.
  • It remains top of mind.
  • Professionals will reference it more frequently in their own efforts.

Visualizations are key to helping share information that would be otherwise difficult for most people to process. Not everyone has a head for numbers (especially that many numbers). The visuals present the information in a format more conducive to consumption by the general audience, which often means achieving better results, faster.

Here’s the whole argument in a nutshell: Have proof that a minor product adjustment will reduce overhead by 50%? Visualization is the difference between more numbers on a spreadsheet and being impossible to ignore.

The dark side of data visualizations

A word of caution here for anyone who wants to achieve more than short-term goals with their data. Numbers don’t lie, but people often do. The problem with abstracting data into a graphic or visual is that the numbers can lose their context — and flashy visuals can be used to misdirect viewers.

When used unscrupulously, data can facilitate the manipulation of information and present a version of the facts that doesn’t align with reality.

For example, “Vanity metrics” are heavily maligned in marketing despite their usefulness in the right circumstances. The bad reputation is well-earned, though, in some settings. Traffic to the site might look like progress, but if none of those users are members of the target audience, the high traffic volume may simply be hiding poor conversion rates.

Presented this way, data can point to lots of busy work on the part of certain teams, but very little actual performance or progress. So when you start putting together all of the graphs you need, make sure to illustrate the appropriate context.

In summary

Data can be a powerful tool in business. It can improve business strategies. It can prove ROI of efforts and resources. It can highlight issues with the market, the business, the team, or even the data itself. Data can also be formatted to transmit important insights quickly and compellingly.

Most of this is accomplished through visualizations. Business intelligence tools are excellent for such purposes and can make short work of quality analytics. 

Looking for the latest in Business Intelligence solutions? Check out our Business Intelligence Software Buyer’s Guide

FAQ 

What is data visualization?

Data Visualization is a software process that takes raw data from spreadsheets and other sources, then turns it into colorful graphs, charts, and tables to make it more easily understood.

Why is data visualization so important?

Data visualizations provide context and relevance, simplifying your message, and promoting comprehension across a wider audience.

1 Yellowfin

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Yellowfin is an embedded analytics and BI platform that combines action based dashboards, AI-powered insight, and data storytelling. Connect to all of your data sources in real-time. Robust data governance features ensure compliance. Our flexible pricing model is simple, predictable and scalable. Easily configure Yellowfin to allow multiple tenants within a single environment. Bring your data to life with beautiful, interactive visualizations that improve decision-making.

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2 Salesforce Data Cloud

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Activate all your customer data across Salesforce applications with Data Cloud. Empower teams to engage customers, at every touchpoint, with relevant insights and contextual data in the flow of work. Connect your data with an AI CRM to empower teams to act on relevant data and insights from your existing Salesforce processes and applications.

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3 Zoho Analytics

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Finding it difficult to analyze your data which is present in various files, apps, and databases? Sweat no more. Create stunning data visualizations, and discover hidden insights, all within minutes. Visually analyze your data with cool looking reports and dashboards. Track your KPI metrics. Make your decisions based on hard data. Sign up free for Zoho Analytics.

Learn more about Zoho Analytics

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