How Data Visualization Improves Decision Making
Today, many businesses are facing a “big data” crisis. The problem is that organizations are collecting datasets that are so large they can’t be processed through traditional means like spreadsheets and tables. Forrester reports that between 60 percent and 73 percent of all data within an enterprise goes unused due to a lack of proper resources required to translate the data into understandable information. But that doesn’t mean that the data isn’t helpful.
This is where data visualization makes all of the difference. Data visualization enables organizations to take these large data sets and visually present them in a way that is easy to digest. With sixty-five percent of the population being visual learners, ensuring decision-makers can adequately understand what the data is trying to communicate to them, investing in data visualization is a no-brainer. This post will take a deeper look into why data visualization matters and how data visualization improves decision making.
Why Data Visualization Matters
As mentioned above, data visualization enables executives, stakeholders, and decision-makers to consume and understand large volumes of data more efficiently. When these datasets are properly visualized, it becomes easier to identify patterns, and quickly draw simple, actionable conclusions. For example, if we dissect the spreadsheet below, we see monthly revenue totals from January to May.
However, to comprehend this data, we need to read each line and then compare each new line to the line before it. Only after doing so are we able to conclude that revenue went up, briefly went down, and then continued to go up.
However, if we present this data in a line graph:
We can instantly see a slight dip in revenue that was quickly recovered. We can even see additional information like the fact that revenue only dropped in April and never dropped lower than January’s total.
While this is a basic example, it demonstrates how data visualization can enable business decision-makers to analyze a dataset or even multiple datasets (prior year values, targets, etc.) to assess performance and trends against critical benchmarks quickly.
Data visualization aims to help decision-makers spend less time compiling large datasets and leverage the technology to mitigate risks and proactively uncover valuable opportunities. Without data visualization, decision-makers need to gather and manually dissect the information. Not only does this take more time and effort, but it can also lead different people within an organization to different conclusions, resulting in longer decision times and bad decisions.
How Data Visualization Improves Decision Making
When we look at data, our brains have to first read the information, comprehend the data, and then understand the information based on the context in which it is presented. Data visualizations help minimize the steps our brains need to take to process data by taking advantage of our natural ability to understand our surroundings. We can better comprehend when things are closer or farther (shown in scatter plot diagrams), moving up or moving down (shown in line graphs), bigger or smaller (shown in pie charts), or taller and shorter (shown in bar graphs).
A visualization can convey this information nearly immediately, allowing our brains to make connections a lot quicker, thus improving our ability to make decisions in the following ways:
As we’ve already alluded to, data visualizations help speed up the decision-making process. It allows critical decision-makers within an organization to immediately comprehend what information is being presented to them. This enables them to identify issues and patterns quickly and improve response times. This ability to make quicker decisions is essential for decision-makers in government and fast-paced industries like retail and healthcare. In these industries, decision-makers are often expected to make critical decisions in short periods. Waiting too long to make these vital decisions runs organizations the risk of missing out on an opportunity, falling behind competitors, or having a minor problem grow exponentially worse.
Surface Actionable Insights
Not only do decision-makers need to make timely decisions, but they also need to make informed decisions as well. However, collecting and efficiently reviewing all of the data available is not always possible. Unfortunately, in these circumstances, decision-makers start to fill in the blanks with assumptions and biases. When making high-impact decisions, missing information can lead to severe missteps. Although big data provides decision-makers with an abundance of information, it’s not always presented in a consumable form. Data visualization simplifies the data, reducing the need to fill the gaps with personal biases.
Once a decision is made, it is essential to effectively communicate that decision to those who will carry out the subsequent steps. Similar to how data visualization simplifies data analysis, it can also streamline communication.
For example, A manager determines that one of their key team members should attend some training to work on a particular skill. The manager could communicate this to that team member. However, now, the team member is left with several unanswered questions. Why is the training needed? Where should their skill level be right now? etc.
While the decision may be apparent to the manager, it isn’t communicated to the team member. By presenting this message in visual form, the manager can ensure the team member understands why the training is needed and can gauge their progress, shifting the manager’s message from unclear and subjective to concise and objective.
Decision-makers should always seek the perspectives of others to enhance their decision-making process. Failing to acknowledge that there are other sides to a situation and failing to recognize that a bias towards a particular solution may exist, hinders leaders from making a decision that would be most beneficial. Data visualization enables decision makers to access valuable information enabling them to develop more informed opinions and empowers them to contribute their perspectives in the decision-making process. Provoking diverse thoughts is especially important when leaders are faced with high-impact decisions.
How //IK is helping organizations improve decision making with data visualization
Today, most businesses have more than just one dataset that needs to be analyzed to extract meaning and identify patterns. However, decision-makers can’t do this on their own. To effectively use data visualization, organizations need to use some form of technology or software. Luckily, today, many data visualization solutions exist. These include: dashboards and data discovery tools, scorecard applications, analytics suites, and an assortment of other integrated software tools.
However, off-the-shelf solutions often don’t allow for the scale, customization, and flexibility required for large organizations with complex data sets. That’s where InterKnowlogy comes in — we use the best technology for the data requirements, creating custom data visualization solution that enable growth and customization. Working with a dedicated data visualization firm helps organizations ensure they are following the best practices on how businesses and industries can competitively leverage their data.
Our data visualization solutions have been used by some of the world’s most recognizable brands. For example, InterKnowlogy played a critical role in the development of CNN’s Magic Wall. Our XAML-based solution with integrated DirectX controls for mapping enabled us to build a solution that met CNN’s particular needs: customized data visualizations, touch interactions, illustrations, and responsiveness.
With the current pandemic, our data visualizations have also helped healthcare companies identify hotspots for COVID-19 and assist a government entity with vaccination progress and success tracking.
You can read more about the data visualization work we’re doing in response to the pandemic here.
By 2024 there is expected to be 149 zettabytes of data in the world. It’s clear that without the appropriate analysis, most of this data will never be used, and that will be a disadvantage to millions of organizations. For organizations that want to take advantage of the opportunities that lie within this unused data, it is important to remember that data visualization empowers organizations to create actionable conclusions from their data, thereby leading to better and faster decision-making.