Is data visualization important for business or just another fancy gimmick?
Gathering information about the market, your competitors, and prospects is not a challenge anymore. Data is readily available at your fingertips. So, you might be wondering why is data visualization important? Do we at all need it? The answer is – YES!
It’s essential for not just a business but every individual, regardless of the career he chooses. In fact, now the challenge that most businesses face is that they don’t know how to utilize the immense amount of data available.
According to an article published in Forbes, low-quality data impacts business adversely. It can jeopardize the relationship with your customers. Increase your overall spending. Waste your marketing and communications efforts, and hamper your decision-making.
Data visualization is collecting unstructured data from different sources. Modeling it graphically using charts and patterns. Organizing and presenting it in a visual format to help the decision-makers come to a conclusion.
It presents the data using visuals like interactive graphs and charts, making information more compelling and easy to interpret.
To survive in today’s competitive environment, even a small business must be able to analyze and utilize the data it collects.
Thus, improving data quality should be the top priority for any business. And, to make the maximum use of the quality data, it must be presented in a decipherable and informative manner. That’s where the importance of data visualization comes into the picture.
Why is data visualization important?
Studies say that human memory can remember a picture better than words. And we can process visuals 60,000 times faster than text. So, for quick, universal, and effective communication, it’s necessary that we use visualization.
8 big reasons why do we use data visualization in any business –
- Determining performance over a period
- Understanding customer sentiment
- Ease of data analysis
- Seamless data presentation
- Interpreting correlations in relationships
- Analyzing risk
- Identifying patterns
- Analyzing and predicting trends
Let’s dig a little deeper on each of those to understand them better…
1. Determining performance over a period
Visuals like bump charts and waterfall charts can present information of a span of time in a straightforward and easy to understand manner. Looking at these charts, even non-IT users can understand the performance.
This not only helps you to know your company’s YTD (year to date) performance but also enables you to decide your future course of action.
2. Understanding customer sentiments
You can sustain your current customer base and convert your prospects only when you understand their sentiments, problems, and requirements. Marketing professionals need to analyze the market to categorize audience clusters. Find influencers and outliers within the collections, and decipher the similarities and differences. All this can be done by examining the different social networks with data visualization.
You will understand the basic concept of what is data visualization if you check out Google Analytics. It shows the performance of a website with simple charts, making it understandable for anyone.
3. Ease of data analysis
Data visualization makes it easier for business stakeholders to analyze different reports. Be it sales, HR, or marketing, and find out the key concern areas. It also helps you recognize the business’s profitable variables and the areas that need improvement.
4. Seamless data presentation
What would you prefer to look at? Long pages of reports with numbers and words or comprehensive charts that speak volumes?
Time is vital for each one of us! While your stakeholders, including your employees, business partners, and investors, want to know about your business’s well-being and your plan, they don’t have all the time in the world.
So, when you present your company’s critical data using meaningful charts, the information not only becomes easy to understand, but more impactful.
5. Interpreting correlations in relationships
There are multiple variables involved in making a business decision, and most of them are scattered. Without data visualization, it is extremely difficult to determine the correlations between the independent variables and interpret them.
For instance, you have an L&D (learning and development) team and a finance team. How much to spend on training without incurring a loss can be understood only when you can draw a correlation between them.
6. Analyzing risk
Determining risk using spreadsheets is complicated and has a chance of error. It’s always better to use BI tools for data visualization of complex variables. Conditional formatting using simple formulas and color coding can highlight the risk areas. Add valuable opportunities and make the visually appealing charts easy for everyone.
7. Identifying patterns
You can get a lot of insights by visualizing large amounts of complex data. We have already seen that data visualization helps businesses analyze different factors. It makes understanding the correlation between scattered variables much easier. In turn, it also helps a company to identify a pattern and make more informed future decisions.
8. Analyzing and predicting trends
Data visualization is essential for understanding your business’s latest trends. By identifying problems before they become critical you can provide quality products/services. Staying ahead of your competitors wins more customers and increases your business’s profitability.
So, what can we conclude?
To conclude, if you want to make quick and prolonged success in your sector, stop asking yourself “is data visualization important”. Try to focus on how you can utilize data visualization for your business.
Data visualization is not meager marketing or IT gimmick – it’s a way of visioning your business growth!
Also, to help make a choice, we have covered 6 of the most popular data visualization tools in our other blog. The link to it is below –