In the last few years, the importance of using data has been emphasized more than ever. Being referred to as the new ‘oil’, or possessing a potency as strong as the internet has made data an ever-growing field of expertise. Pursuing Data Analytics has become one of the core strategies for businesses looking to optimize every vertical of their business.
While data analytics is a specialized field, understanding the same is not as easy as it sounds. The challenge for professionals who work in data like Data Scientists or Data Analysts is to present the same in a way that becomes understandable by everyone in the organization.
This is where Data Visualization comes to the rescue. It helps in the presentation of data in a simple, easy and understandable fashion. In this article, we look at some of the basics of data visualization. Additionally, we also look at the benefits and challenges associated with data visualization.
Importance of Data Visualization in Business Organizations
Imagine going through hundreds of rows of data without understanding what they are all about. This is the problem of data when it is not passed through the visualization stage. A simple way to understand data visualization is to consider it as a pictorial gist of the information. Data visualization draws its importance from the way the human brain receives and processes information.
- Visualized data is much more graspable and helps us understand the following important elements-
- Time of the data- one of the most common reasons data visualization is used in organizations is to show changes over time,
- Frequency of the occurrence/event- data visualization helps in understanding the frequency of how often an important business event occurs, for example, sales.
- Correlations between elements- data visualizations allow human beings to understand patterns and correlations between processes. How changing one thing affects another.
- Doing market research- every time a business wants to do market research, it segments the consumers into various data sets. This helps in understanding tastes and preferences.
- Assessing risk and rewards- data visualization charts are used to understand how a variable is going to affect the risks and rewards of a process or strategy.
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Benefits of Data Visualization for Business Organizations
In this section, we are going to look at some of the obvious advantages of Data Visualization for business organizations-
1. Helps in better decision making-
Unless data is presented in a form that is understood by decision-makers, they will be unable to make informed decisions. If data shows that a specific strategy is yielding rich results, the CEO can make a decision of strengthening the team to boost the results further.
2. Better understanding within teams and professionals-
Not everyone is great at reading unstructured data. If a team is not presented with data in a way that they understand, it will become difficult for them to execute strategies and processes according to it. Data visualization helps teams and professionals with a better grasp.
3. Opens areas of opportunity and improvements-
Going through a million rows of data to look at opportunities is impossible. Data visualization allows the formation of data in graphs and tables that might highlight both areas of opportunities as well as problems that can be better addressed.
Challenges of Data Visualization for Business Organizations
While there are some tangible benefits of data visualization, there is no denying the fact that there are some challenges as well.
Firstly, oversimplification of the data just to make others understand in the organization leads to its integrity getting compromised. Being too aggressive with visual simplification can result in important pieces of information getting overlooked.
Secondly, there is always the human factor to be considered. Someone who is assigned the task of data visualization might suffer from their prejudices. They might try hard to make something they feel is important while missing out on some areas that are.
Thirdly, spoon-feeding complex data in visuals can become problematic if taken to extreme levels. It prevents senior management from truly engaging with meaningful data. Further, it limits their capacity for critical thinking and finding trends and patterns on their own.
The Bottom Line
In this article, we have discussed some important areas that a content piece on data visualization should ideally cover. We have addressed some of the major challenges along with discussing the benefits. Data Visualization is a very important component in modern business organizations. If you have any more questions that you would like us to answer, let us know in the comments below.