Data Visualization: Importance and Benefits

Data Visualization: Importance and Benefits

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    Data Visualization: Importance and Benefits

    Nowadays, companies across domains are willing to record user interactions with their products or services to identify trends and patterns. They know the importance of gaining insight into their target market. They can then make appropriate business decisions that will propel them toward success and improve their overall performance. In business intelligence, exploring this invaluable user interaction data takes the form of data visualization.

    When you visualize data, it is necessary to determine what you are planning to communicate and choose the right visuals (widgets) that will get your message across in a simple manner. Using visualization, you can identify the areas of your business that require attention and improvement.

    What is data visualization?

    Data visualization means presenting processed data through graphical representations that allow viewers—business analysts and executives—to explore the data and uncover deep insights. This visual format enables one to make quick and effective decisions, since it is much easier for people to comprehend information through visuals rather than the raw reports.

    What makes data visualization powerful and useful?

    Comparing numbers presented in a flat table to find the top values is extremely difficult and takes a long time. This is where visualizing your data through graphical representation can make your life easier. If you plot the data pictorially using widgets, finding the top value from a year’s worth of data is possible in a few seconds, maybe even a fraction of a second. Now, imagine the same comparison but with 10 years of data. Here, data visualization plays a vital role for the decision-makers in exploring data effectively and quickly understanding it through widgets.

    Why is data visualization important?

    Humans more easily grasp information through visuals. In a business context, visualization helps convey a story to decision-makers, allowing them to act more quickly than if the data were presented raw. Widgets allow managers to interact with the data according to what questions they want answered, leading them to greater insights. Data visualization is important for:

    • Helping company leaders understand how the business data is being interpreted to determine business decisions.
    • Leading managers to discover areas of the business that require attention and improvement.
    • Handling large amounts of data in a pictorial format to provide a summary of patterns in it, revealing the story within the data to establish business trajectories.
    • Managing growth and converting trends into business strategies as you make sense of your information.

    The benefits of data visualization

    When considering business strategies and goals, data visualization benefits decision-makers in several ways to improve data insights. Let’s explore seven major benefits in detail:

    Better analysis

    Data visualization helps business stakeholders analyze reports regarding sales, marketing strategies, and product interest. Based on the analysis, they can focus on the areas that require attention to make the business more productive, which in turn increases profits.

    Quick action

    As mentioned previously, the human brain grasps visuals more easily than table reports. Data visualizations allow decision-makers quickly glean new data insights from real-time data and take necessary actions for business growth.

    Identifying patterns

    Large amounts of complicated data can provide many opportunities for insight when we visualize them. Visualization allows business users to recognize relationships between the data and its causes, providing greater meaning to it. Exploring data patterns helps users focus on specific areas that require attention in the business, so that they can make improvements that drive their business forward.

    Finding errors

    Visualizing your data helps quickly identify any errors in the data. If the data tends to suggest the wrong actions, visualizations help identify erroneous data sooner so that it can be removed from the data set.

    Understanding the story

    Storytelling is the purpose of your widgets. By designing your visuals in a meaningful way, you help the target audience grasp the story in a single glance. Always be sure to convey the story in the simplest way, without excessively complicated visuals.

    Exploring business insights

    In the current competitive business environment, finding data correlations using visual representations is key to gleaning business insights. Exploring these insights is important for business users and executives to set the right path to achieving their business goals.

    Grasping the latest trends

    Using data visualization, you can discover the latest trends in your business and market. This helps you provide quality products and identify problems before they arise. By staying on top of trends, you can made decisions that increase profits and cut losses for your business.

    How data visualization works

    • Data handling and conversion: Data visualization involves handling tons of data that will be converted into meaningful visuals using widgets. To achieve this, we require the best software tools to connect to various types of data sources such as files, Web API data, and database-maintained sources.
    • Choosing the right tool: To achieve the best results with data visualization, organizations should choose the best data visualization tool to meet their requirements. At a minimum, the tool should support interactive visual creation, flexible connectivity to data sources, combining data sources, automatic refreshing of data, sharing visuals with others, secured access to data sources, and exportation of widgets. These features allow you to make the best use of your data.
    • Saving time and improving insights: By using a data visualization tool that simplifies the data analysis process and presents results attractively, you can save time and improve your insights into your data, which makes it easier for you to make informed decisions.

    Types of data visualization

    The right data visualization is essential to turn raw data into actionable insights. To showcase analytics based on the KPIs we need to measure, we must chose appropriate widgets. Understanding which widget types to use for different types of data is crucial for effective data visualization. One of the most common widget types is a chart, but of course, there are a lot of chart types, too. Get a clear idea about chart types and their use cases in order to choose appropriate charts for your data in this “Unlocking Data Insights with Appropriate Charts” blog.

    How to choose the right visualization

    Choosing the best visualization for your data requires several key considerations:

    • You must know what kind of data set you are transforming. Understand the type of data you’re interacting with. Is it numerical, geographical, or categorical? This will aid you in choosing a suitable visualization.
    • Determine how your visualization will be used and what you want to convey through it. This will assist you in selecting the appropriate type of visualization.
    • Identify your target audience.

    To learn more about how to choose visualizations, tips on configuration, and the different types of visualizations, take a look at this blog.

    Example of data visualization

    Data visualization helps you achieve specific business goals no matter the industry or department. Take a look at some example dashboards and imagine how they can aid in presenting the story of the data within them.

    School management

    This School Performance Dashboard example helps administrators monitor important KPIs related to faculty, grade levels, the retention rate of students and faculties, faculty-to-student ratio, student enrollment details, and more. This gives a comprehensive view of the performance of an institution and student body. It also forecasts enrollment for the next three years.

    School Performance Dashboard
    School Performance Dashboard

    Hospital management

    Using this Hospital Management Dashboard, you can monitor important KPIs such as the average length of stay of patients, readmission rate, and average treatment costs. You can monitor the details related to bed occupancy rate, upcoming appointments per doctor, the number of patients in and out with respect to division, and so on.

    Hospital Management Dashboard
    Hospital Management Dashboard

    Defect Management in Agile

    This dashboard allows leaders to track and monitor defects in an agile development practice to gain insights into escaped defects, defect cycle time, bugs, and defect gaps. This allows the team to know the number of bugs in any given project, the types of defects and their statuses, and the number of resolved defects. This information helps developers identify improvements that need to be made to minimize bugs and defects.

    Defect Management in Agile
    Defect Management in Agile

    10 quick tips for effective data visualization

    Here are 10 tips to make your data visualizations the best:

    • Display only relevant data.
    • Keep the widgets simple.
    • Hide unwanted details in your visuals.
    • Display less data by using filters.
    • Provide appeal to your widgets with pleasant colors.
    • Categorize large data with drill-down behavior.
    • Auto-refresh your visuals to show the most recent data.
    • Understand decision-makers’ interest and create dashboards accordingly.
    • Choose the widgets that best convey the story in the data.
    • Don’t pack too much information into your visuals.

    In this blog, we have explored data visualization in detail, its importance and benefits, and quick tips for effective data visualization. Get started with Bold BI by signing up for a free 15-day trial to create interactive business intelligence dashboards.

    We also suggest you have a look at our blog posts on interpreting data visualizations to help you find the best way to get started with data visualization immediately:

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