How Data Visualisation Can Revolutionise Your Business

Data visualisation has become a buzzword lately, and for good reason. You’ve all heard the idiom “a picture is worth a thousand words”. Let’s change that up to “a picture explains a million numbers”. That’s really what data visualisation is all about.

Every day massive amounts of data are being created, collected, and stored by people, devices, and machines. Ninety percent of the data in the world has been created in the last two years alone. However, many organisations struggle to derive real benefit from all of their data, in essence, to turn all that data into information and the information into actionable insights. Organisations need to be able to turn their data into insights which inspires action and change in their business processes.

One of the best ways to discover insights in your data is through data visualisation, the practice of representing your data in graphical form. With the way data is stored in a data warehouse or excel spreadsheet, it can be hard to recognize patterns, identify trends, and gain insights. Plus, there is the goldfish effect, which asserts that humans can only focus on a single task for eight seconds before becoming distracted or move on to something else.

In this article, we’re going to look at the high-level benefits of visualising your data. This is part one of a five-part series on data visualisation. In the series, we’ll explore the strategic aspects of successful implementation of data visualisation for executives.

Our focus will be less on the tactics, like what software to use or colour palette work with. As we’ll see in a later article, most organisations struggle with their business processes, and that’s why they don’t get value from their tactics.

Here are the three main reasons you should visualise your data more:

1. Find Connections Between Objectives and Activities

How do you know if your initiatives are making a difference in your key performance indicators and Objectives and Key Results (OKRs)?

Take a manufacturing company as an example. It can be challenging to find out what’s really moving your metrics when you’re running four distribution warehouses, handling a hundred vendors, and dealing with a few hundred employees. Is the change you’re seeing something you did to your warehouse layout? Was it a change in your inventory picking process? Was it the vendor you fired?

The task of identifying the activities that move your metrics becomes a monumental challenge when your scale is 10 or 100 times that of the example given above.

Data visualisation makes it easy to identify patterns and connections between your actions and objectives. Managers can see how day-to-day activities have an impact on their key performance indicators and objectives.

In the manufacturing company example above, they could, for example, map out the geographic location of all of their customer orders and compare it over a few quarters. This would allow them to recognise if their profits increased and costs decreased because they had more orders closer to the warehouse.

Armed with this insight, they could begin to optimise delivery routes or offer preferential treatment to high-value customers. This is a perfect example of how organisations can take data and turn it into insights that create actions which help them reach their metrics.

2. Data is Given Context

If I told you one of your customers has a profit margin of three percent, how would you feel? Well, that depends – and that’s not just because I’m a consultant 😉 For some, you would kill for three percent profit and treat this customer like royalty. For the rest of you, three percent might be too low and your organisation would have a serious discussion about firing them, increasing rates, and more.

When I told you about a customer’s profits, you added context based on intuition and years of practice. Why is this significant?

Visualisation gives context to our data. An easy example is a whale curve, which maps a product’s or customer’s profitability in comparison to others. Financial managers have been using the whale curve for a long time, and you have probably had your fair share of experience with it.

We could take this one step further and overlay our whale curves for a specified period of time. This could reveal all sorts of insights for an organisation. For example, are you growing the number of customers profitably? Growing unprofitably can destroy a company. Are you making customers more profitable over time?

3. Quick Access to Data and Insights

Humans absorb information much faster when it is in a visual format. The ability to see large amounts of data in clear and cohesive ways, through data visualisation, allows executives to draw conclusions faster and solve problems in a timely manner. We can identify potential problems before they become real problems.

Take the area chart below, which maps an organisation’s total cost and revenue, as an example.

Image Source: Sisense Blog – 10 Useful Ways to Visualise Your Data.

Within seconds, you can gain several insights. You can see how your costs compare to your revenue over a given quarter. Then, you can see how the organisation is keeping costs consistent, with only small incremental growth over time.

You could gain all of these insights by pouring over a P&L and looking at your quarter-over-quarter report. But why bother? Looking at an area chart, you can get the same insights at a much faster rate. When you’re a busy executive, finding the time to dive into reports is tough. You need a solution that delivers insights, the CEO demands from you, in a fraction of the time.

Data visualisation can change every organisation by allowing them to find connections between their objective and activities, giving context to their data, and helping them find insights faster.

Getting Started with Visualisations

This article has been an introduction to data visualisation. In the next article, we’re going to dive into more of the specifics of getting started with visualisation by exploring the common mistake that many organisation make. This next article will be out in about two weeks, so stay tuned!