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What is data visualization? A beginner’s guide with benefits and examples

By: Emily Finlay

Businesses today have access to more data than ever before. Just being able to see numbers, however, isn’t enough. To make informed decisions, business leaders need to understand what they are seeing and what it means for their operations.

Data visualization transforms streams of numbers into visual representations that put this information into perspective. Using these tools, businesses can strategize the best next steps to take.

In this guide, we’ll help you understand what data visualization is, how you can use it, and why it’s critical for your success.

What is the data visualization definition?

The definition of data visualization is using visual representations to communicate raw numbers. Displaying data through graphs or charts, for example, makes the information easier to comprehend. Through this use of data visualization, you and others can support the work you do with actionable insights.

People have used pictures to visualize data for centuries. As technology evolved, our use of and ability to create these maps and graphs increased as well. Computers give us access to more data while also facilitating better ways of displaying it. There are endless ways to visualize your data, something we’ll get into more in the next section.

How do you use data visualization?

You can use data visualization in two major ways. One, you can use these pictures to translate raw numbers into concepts you can understand and relate to. Two, you can then use these visuals to improve the focus and success of your work. In any work and position, there is some way that you can use data to increase productivity and effectiveness.

As you’ll see in the examples below, these two purposes go hand-in-hand. You can’t learn from your data if you don’t first visualize it and your visuals are useless if you don’t actually apply them. Before we get into the importance of this tool, however, let’s first take a look at the many ways you can use it.

What are ways that you can use data visualization?

1. Improving scheduling

Whether you’re optimizing your employee’s work schedules or planning out a project timeline, you can use data visualization to keep everything organized and effective. Plug in time estimates for each stage of your project to see how long it will take and if it meets your timeline. Break down your weekly shifts to see who needs to be where.

Creating a visual timeline or schedule also shows where you may have gaps. If someone calls out sick or you run into a project delay, you can use your schedule to see how this affects the rest of your timeline. Plus, it gives everyone on the team an easy way to see where their responsibilities fall at all times.

2.  Analyzing changes

Every business needs to know how its needs and performance change over time. Charting data over a specified amount of time allows you to see how your current numbers compare with previous weeks, months, and years.

Your marketing department, for example, can use data visualization to see how your promotions perform on every channel you use. If your ads return low numbers across the board, that shows that the problem is probably with content. If one channel’s ROI has dropped consistently, despite changes to the ads, that’s a good indicator that that channel isn’t a good option for your organization.

Businesses can also visualize numbers to support new initiatives or simply to inform stakeholders on a regular basis. Creating clear representations of performance gives everyone the resources they need to continue improving.

3. Determining risk and value

When you are looking for new opportunities, understanding the potential outcomes, both positive and negative, is essential. Data visualization outlines the risks involved with any moves you might decide to make. It also shows how you can benefit from these actions.

If you are interested in acquiring another company, you first need to know if this transaction will be to your ultimate benefit. Using visuals, you can compare the costs you would take on (such as debt, increased payroll, purchasing price, etc.) to the additional revenue you would hope to make. This clear representation will help you determine if the acquisition is worth the additional costs.

4. Finding correlations

Identifying a problem isn’t enough to resolve it. When you discover a problem within your company, you can analyze your data to find the root cause. This allows you to create a solution that fixes the issue, rather than just dealing with the results. 

Say, for example, you notice a sudden increase in overtime costs for one department within your business. While you could just direct more manpower toward that department or tell your supervisors to remind workers that they can’t work after-hours, that won’t resolve the problem.

By comparing data representations, you might discover that an increase in equipment downtime correlates to slower production times. Or maybe that department has too many employees taking time off at the same time and leaving everyone else to pick up the slack. Whatever the problem is, finding the correlation within your data empowers you to create a solution that works long-term.

5. Tracking frequency

Understanding the frequency of an event empowers you to prepare in advance for its outcomes. You might track the frequency of equipment failures to improve your maintenance schedule. Or you can monitor the number of times an employee performs a specific action to optimize the processes they follow.

Then, by visualizing these events, you can spot trends within your data. Rather than trying to calculate the frequency based on raw data, you can plug the numbers into a timeline. You will be able to spot the relevant pattern quickly, using it to make the necessary adjustments.

What is the importance of data visualization?

Data visualization is important because it allows us to find the information we need among lists of numbers and data. Without these visuals, most people would struggle to find the relevant trends and patterns we need to make effective decisions.

Since human beings are very visually minded, breaking these numbers into pictures simplifies the information we’re trying to understand. The more you know, the more successful you can be. You can ask better questions, develop more effective strategies, and make decisions that achieve the results you’re pursuing. And, you can accomplish it all in less time than it would take to sift through your data in its raw form.

What are the benefits of visualizing data?

1. Minimize costs

There are many ways to save money with visuals. Rather than hiring a team to sift through your data, for example, you can use this tool to simplify the numbers. Though you’ll still want someone who can understand more complex information, visualization limits the time and number of people involved in analysis.

You can also find areas that need improvement more quickly. Armed with solid data, you can develop solutions that keep your organization running smoothly.

2. Make better decisions

As we’ve mentioned throughout, visualization provides the clear knowledge you need to make informed decisions. In some situations, this might mean using data to project your business’ future. For others, your graphs and charts can equip you to make minute-by-minute decisions about your work.

Many tools today, for example, provide real-time, comprehensive dashboards that show how that specific software is improving your results. Examining this information shows the outcomes of your previous decisions. It also helps you understand how outside forces affect your operations. By combining all of this essential data, you can maintain a full understanding of your organization at all times.

3. Encourage team involvement

People tend to tune out information they don’t understand. If you are seeing a lot of glazed eyes in your meetings, data visualization may be the solution you need.

Rather than just listing numbers, create pictures that show this data in a simpler form. Demonstrate the ways this information affects your team, clearly showing why it is important to the people involved. For further involvement, you can assign specific datasets to each team member. Have these workers create their own visualizations and explain them in the next meeting. This higher level of ownership will make the information more meaningful and keep everyone invested.

4. Limit mistakes

When you’re looking at long streams or lists of numbers, small mistakes are hard to spot. Converting these numbers into a chart, however, can quickly show where something went wrong in your data entry. You won’t always catch every mistake, but simple problems, such as transposing numbers, are usually apparent in a visual representation.

In our age of big data, where numbers shift quickly and uninformed decisions can spell doom, staying on top of your data is key to remaining ahead of your competition. Data visualization enables you and your team to stay prepared for both threats and opportunities, at all times. Whether you’re adding them to reports or confirming your status with a glance, this tool provides the foundation for sustainable success.

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