The Importance of Data Visualization for Business
Companies generate tons of data every day: various statistics, marketing metrics, reports on sales, profit, clients, and so on. But keeping track of the entire scope may become overwhelming for the business owners and the team, especially if the information is presented as dull raw data or in a complex format.
Let's face it, visual context rules. It's much easier to comprehend information in interactive dashboards than to read extensive paragraphs of text or attempt to gain insight into a wall of numbers. Data visualization gives perspective. And this is vital for business or startup analytics as it speeds up data analysis processes and makes them more effective.
This page will introduce you to the benefits of data visualization and explain why data visualization is important for businesses.
What Is Data Visualization?
In simple terms, data visualization is the process of converting static or raw information into graphs, tables, charts, diagrams, maps, timelines, scatter plots, dashboards, heat maps, and other visual representation so the data becomes easier to comprehend.
If we put business use in the perspective, the given data visualization definition can be expanded. As data representation saves time and effort, it simplifies decision-making since you get to see the big picture.
Be it graphical, pictorial, or other formats, the main purpose of data visualization is to streamline the process of perceiving data, assist in understanding complex information, and boost decision-making efficiency.
Why Is Data Visualization So Important for Business?
If you come to think of it, it doesn't matter which role you have in a company. Whether you're a business owner, stakeholder, analytics specialist, sales rep, marketer, or any other decision-maker, you always deal with data.
Reports and metrics, employee progress and customer satisfaction, ROI and profit, trends and market changes, spikes and declines... There's so much to keep track of and in so many places. Ugh, can't all of this be less boring and simpler for human beings to understand?
One too often, people (especially those who don't have a background in analytics) hesitate to dive into the labyrinths of figures and numbers. They don't want to:
- go through the trouble of figuring out what's written in confusing spreadsheets;
- dig deep in the reports piled with endless facts and figures;
- or go into the details of perplexing CRMs and abstract tools.
This may become a problem for many businesses to a certain extent. To say the least, a company could surely be better off if the staff were fluent in analytics.
Whether you like it or not, you must know how the business is doing for the company to succeed and scale. You need to be sure that the actions you're taking are working, monitor the changes, and make the right calls in due time. So the bottom line is that there is no other way to know for sure but to track and analyze data, always keeping one hand on the pulse.
Instead of ignoring the matter and leaving things to chance, you should ask yourself, "Can working with data become easier for all of us?" The answer is 'yes', and it should.
Thriving enterprises have long revealed the best path to success in this respect. Don't overcomplicate things, above all, when you're working with data. It's all about making life easier for everyone who deals with data, and the simpler it is to comprehend, the better. This is specifically why we have to note data visualization importance.
Which Problems Does Data Visualization Solve?
Did you know that a human brain can process visual information 60k times faster than text? Studies suggest that it is much simpler for people to perceive visual data, yet many companies still heavily rely on static data in the textual format. And in many cases, this data may be gathered irrationally or scattered in too many places.
Data visualization is very helpful in staying organized and in the loop. Simplicity is key. Can an interactive chart speak better than words? Can a map highlight the pivotal issues? Will a dashboard be a more convenient means than a static report or textual resource? Will you make more informed decisions if data is gathered and displayed in real-time?
By approaching analytics properly, you can save a lot of time and effort on trying to perceive and "pull out" the must-knows from all the incoming data without missing out. Analytics shouldn't be an unbearable burden for the team, and there are better ways to tackle it.
It goes without saying that successful businesses are always on guard, monitoring their metrics, key performance indicators, and other crucial data. And some of the main reasons why data visualization is important is that it allows for avoiding unnecessary problems, such as:
- misinterpreting or failing to understand what's going on because data is presented confusingly;
- making wrong decisions or with inappropriate timing;
- not addressing issues or mitigating risks when all the evidence was present;
- wasting resources on irrelevant things;
- missing out on business-essential discoveries;
- facing lost opportunities or potential profit;
- among others.
Data Visualization Benefits
What are the benefits of data visualization? Without a doubt, it is a powerful data analytics tool that any business of any type and size should exploit. When coupled with the capabilities of modern technology, visual means become a more rational way of explaining complicated concepts and conveying complex information in an intelligible format.
There are numerous advantages of data visualization a business can reap:
- Staying organized (data visualization brings together data from multiple sources and structures it in a comprehensible format, it thus becomes more accessible; plus there's a smaller chance you'll lose any information).
- Saving time (you can figure out and process an enormous scope of information quicker and more effectively).
- Omitting miscomprehension (when the data is clear, there's less room for startup mistakes and communication gaps).
- Improving workflows and efficiency (when everyone is on the same page, you can bring together the work of various teams and departments, boost employee efficiency, and upskill them in analytics usage).
- Getting insights on key performance indicators and metrics (you may better understand where you stand in terms of the market, profit, and other product performance metrics and KPIs).
- Identifying market changes, noticing trends and patterns (as you get a 360-degree view of the market, demographics, and other vitals, you examine the current situation and find opportunities to make a profit).
- Allocating problematic areas and mitigating risks (not only can you find areas for improvement but also avoid investment loss).
- Saving money and optimizing budget distribution (with an in-depth view, deciding what to spend money on and how to cut costs becomes simpler).
- Making informed decisions and taking action faster (since all the data is available at a glance, you make data-driven calls and build better growth strategies).
- Endless data visualization opportunities (because there are many options when it comes to data visualization types and the technologies to back it up, you have the flexibility and freedom to tailor the visual means according to your needs).
This was just the tip of the iceberg, as the list of benefits of data visualization can keep going based on a company's specific needs and how it utilizes data.
How Else Can Data Visualization Help Businesses?
Modern technology assists in optimizing analysis procedures. By integrating automation tools and using product analytics solutions, companies can upscale many processes, including analyzing root causes, predicting changes or outcomes, and prioritizing features and further steps.
In fact, an AMA study revealed that data visualization improves meetings' effectiveness and productivity, cutting their duration by a quarter.
Plus, you get to embrace every available opportunity, meaning a business can put data to good use. For example, a comprehensive dashboard can shed light on the areas of profit you may be missing out on or give you a better understanding of which tactics aren't bringing back the expected ROI.
All of this facilitates you to draw conclusions quicker and based on data instead of making assumptions and guesses. Bain & Company suggest that companies using advanced analytics are five times likelier to make decisions faster than their competitors.
Does Data Visualization Have Pitfalls?
To be fair, not all data visualization is decent. If it isn't implemented correctly, you may end up with a pool of dashboards, reports, and other visuals that do nothing but confuse you and the team. What are the common pitfalls?
1. Excessive data visualization won't do you good
While the convenience and importance of data visualization are obvious, you can get carried away with visual representation. There's no point in having dozens of reports, charts, dashboards, etc. Will you use them all? Perhaps, fewer is better.
2. Using too many colors
Color abuse is a no-go. If your graph, timeline, or other solution is spangled with every color of the rainbow, it won't convey the proper meaning and only serve as a distraction, scattering attention. Rethink your color choice for clarity.
3. Overcrowding your visualized data
If visualized data takes too long to figure out, your solution isn't serving its purpose. For instance, don't squeeze too much information into one chart; otherwise, you won't be making use of the possible data visualization advantages. Remember, the information should be logical, digestible, and easy to follow, so:
- omit unnecessary elements and objects;
- remove cluttered data;
- make your solution more interactive and intuitive;
- optimize the navigation;
- use filters or data separation as means for improvement;
- narrow it down to the major takeaways.
4. Choosing the wrong data visualization means
Again, if the data is depicted confusingly, then opt for another data visualization format that would be simpler and cleaner. At times the wrong data visualization type can result in a mess. You can end up distorting data. Perhaps, a timeline was enough at the beginning, but as times change and more data comes along, you need to switch to a more optimal format to clear things up.
5. Prioritizing design over usability
It's always pleasing to the eye when data is visualized appealingly. But a stylish look cannot be put before usability. The graph, map, chart, or whichever other chosen data visualization means must foremost bring value.
How Upsilon Handles Data Visualization
Upsilon has ample experience in providing data visualization services. By applying advanced technologies (like Cube, Nivo, AWS, and others), we build custom solutions that allow businesses to effectively address their needs.
When datasets are complex and vast, it is vital to simplify their analysis. Information needs to be well-organized, visually accessible, and intuitive in terms of perception and comprehension. Again, this emphasizes data visualization importance as when decision-making is fueled by an in-depth understanding of the big picture, you get the chance to make the right calls.
This approach is applicable for various business types, including B2B and B2C. So before offering specific data visualization means, here at Upsilon, we discuss the customer’s needs, pain points, and expectations, as well as overview the present-day analytics solutions in use. When that's clear, we suggest the optimal solutions, which can be:
- building a full-scale BI platform for data analytics;
- creating interactive data reports, dashboards, charts, plots, maps, tables, and other data representation or modeling formats;
- upscaling the current software and applications with data visualization features or rebuilding the existing analytics solutions to boost productivity;
- separating analytics functionality into compelling modules;
- delivering simple integration solutions;
- providing customization opportunities;
- optimizing usability and big data management processes.
For example, below you can see Collectrium's customizable dashboard, a solution with various data visualization means that we've created for one of our clients.
Data Visualization Example Case
As you can tell, data visualization for business can take many forms. We'd like to tell you about how Upsilon helped to make the representation of data more effective for one of our clients when creating an in-store customer tracking software.
They faced the need to collect statistics on their retail stores' customers, track their movement, and analyze data such as client behavior. To reach the objective, we created in-store tracking technology that gathers data from customer smartphones with the help of Bluetooth sensors (that we placed inside the mall) and transmits it into an application.
As a result, the obtained data is conveniently presented in the form of reports and online dashboards that continue to bring tangible value to this day.
Now it is possible to monitor such information as the number of unique visitors or returning clients, how long the duration of their visit was, the average check size, among other insights without hassle. To simplify perception and enhance usability, the solution has flexible settings, so you can filter and see the results based on location, date, and other factors.
By seeing the big picture according to the latest data (with dynamics and preferred client routes), the owners who have stores on the mall's grounds and the mall itself leveraged the data to their advantage. They took data-backed actions that were more to the point. This included their marketing campaigns or using notifications based on location. Consequently, they managed to boost their customer retention by 15% and conversion rates by over 30%.
For more examples of Upsilon's data visualization projects, feel free to browse our case studies.
As you see, there are numerous data visualization advantages for businesses. When executed the right way, visualization can bring lots of useful insights that keep you focused and organized, empowering you to up-speed and boost decision-making.
The importance of data visualization can't be underestimated as it can turn a challenge into an advantage, paving the way to success and outperforming competitors. It’s like a navigator that you can use to sail your business to prosperity. And the best part is that the opportunities for customization are very broad, meaning that you may tweak the visual means and enforce them with advanced functionality to suit your business needs.
If you have any questions or would like to discuss your company's data visualization ideas, don't be shy to contact Upsilon for a consultation with our experts!