The power of data visualisation

“Data is the new oil” is the memorable phrase coined by entrepreneur Clive Humby back in 2006. But the phrase needs a little expansion. Marketing guru Michael Palmer explained it like this: “Data is just like crude [oil]. It’s valuable, but if unrefined it cannot really be used.”

Businesses of all sizes are racing to harness the power of data to drive digital transformation and to keep up with the rapid changes in society. However, merely collecting and storing vast amounts of data isn’t enough to fuel growth or inform decision-making. The key lies in refining it – interpreting and communicating it so that it can be used in a practical and effective way.

This is where data visualisation can demonstrate its value to business.

Data visualisation is the graphical representation of data so that it provides information. It is not just a tool for creating colourful charts: it’s a powerful storytelling device that allows businesses to explore data, communicate insights from that data and act on those insights decisively.

Turning data into insight

Data-driven decision making is a strategic approach employed by many businesses as a way of arriving at decisions based on evidence. And while at Business Reporter, we prefer the term “data- supported decision making” (because insights based on data shouldn’t always be trusted unquestioningly), there is no doubt that using data to inform decisions can be a lot less risky that simply using “gut feeling”.

The difficulty is that data in its raw form can be overwhelming. Businesses are flooded with it, from a myriad of sources: customer behaviour measures, sales metrics, market trends, operational benchmarks…

Data on its own is meaningless. It needs some form of processing to give it the structure and context needed to turn it into useful information. Data visualisation transforms data into understandable formats—such as graphs, heatmaps and dashboards—that allow people to spot patterns, trends and correlations at a glance. This simplifies the decision-making process and facilitates more informed management decisions.

And these are decisions that can be made in real time. The pace of business today is faster than ever before, with consumers and competitors having access to, and reacting to, constantly changing information. And doing so in real time.

Data visualisation is therefore an intrinsic part of data-driven decision making: the rapid translation of data into usable insight. It can for instance be used to drive customer-centric strategies by allowing businesses to uncover preferences and buying patterns that may be hidden in customer data. A simple example is the use of a “heatmap” in a website to show which parts of a web page are attracting most attention, something that may not be immediately obvious from the analytics data underpinning it.

And with data visualisation, decision-making can be accelerated. For example, it is no longer necessary to wait days for a report into the launch of a new product: visualised data enables product managers to identify and address any launch issues before they escalate. And they can do this almost instantly because data visualisation tools provide them with immediate access to critical information such as KPIs, without having to struggle though a complex process of analysis.

Driving cultural change

As well as providing easy-to-access insights, data visualisation can also help drive cultural change. It is a universal tool that can be used by all business functions to collaborate more effectively. When data is visualised effectively, it fosters collaboration and innovation across teams by providing mutual understanding and facilitating what can in effect become a single source of truth.

Well-crafted graphics provide a common ground for discussions, helping everyone understand the points being made without getting bogged down by technical jargon or outlying data, whether they’re data scientists, functional specialists or C-suite executives.

Data visualisation can also have an impact on change management. Resistance to change within an organisation, for instance new technologies or processes, is often a powerful force. Employees may feel uncertain about their abilities to cope with change, they may feel devalued in some way, they may even tend to reject change because they are risk averse (“If it ain’t broke, don’t fix it”).

Data visualisation demystifies the data and data analytics, making it more accessible, and more persuasive, to everyone, regardless of their statistical and technical expertise.

In other words, by providing intuitive information, data visualisation tools enable employees with all levels of skill and experience to understand data and contribute their own insights to any discussion using that data.

Mitigating risk, identifying opportunities

Data visualisation is a method with wide-ranging applicability. As well as identifying new trends that signify opportunities, it can flag up anomalies or uncomfortable issues that might signal risks. For instance, data about customer complaints visualised on a dashboard could immediately alert business leaders to a potential product issue or service failure that needs to be addressed urgently.

Data visualisation bridges the gap between raw data and actionable strategy, turning complex data files into understandable information containing insights which can drive better decisions and foster better collaboration.

A picture is worth a thousand words. Digital technology enables the collection of unimaginably large quantities of data about all aspects of an organisation’s operations. Businesses that master data visualisation will be well-positioned to thrive in an ever-evolving business landscape.