“A Picture is Worth a Thousand Words” – The Importance of the Right Data Visualizations in Business Reports
Business reports: what’s in it for you?
Business reports are an essential part of any company or project. Whether it deals with general Key-Performance-Indicators (KPIs), the overall condition of the organization and expenses, it is used to track progress and pursue goals. Thanks to such analyses, companies can have a better control over the evolution of their business, improve what needs to be, and eventually try to predict future trends in forecasting what can be upcoming. These reports are also important when reviewed regularly (on a daily, weekly, monthly basis depending on your business), for managers to adjust and correct a strategy heading in the wrong way. Business reports can cover a wide range of domains (sales, finances, inventories, budget allocations, employees’ performance and satisfaction, …), but also specific industries (manufacturing, retail, healthcare…).
On top of helping you improving your business and taking better data-driven decision, business reports help you keep record of the past. This is important when talking to investors who may need a track record of what has been your company, how it was run and how it performed. Business reports as dashboards are all the more essential as they “enable you to easily visualize your data, filter on demand and slice and dice your data to dig in deeper”, says Heiko Tröster from datapine.
The first steps to a killer business report is to collect your data and understand it. Then, you analyze what is relevant and what you need so as to sketch out a plan and draft your content. To do so, you should however ask yourself a few questions beforehand: what do you want to say in your report? Who is your audience? How do you want to convey your message? Those first steps are crucial in setting up a business report, but half of your work will be to make your story -the message you want to share- understandable.
But why would we need visuals to transfer number-related information?
In today’s society, people receive on average 5 times more information than what they used to have in 1986. The amount of data processed can be compared to 174 newspapers per day. When we also realize that two days’ worth of data in 2013 are the equivalent of the amount of data created between the beginning of our civilization until 2003, there is no wonder why more and more people feel flooded by an information overload!
This shows us the importance of simplifying what our brain is processing. On average, people remember 80% of what they see and do, but only 20% of what they read: visualizing text as an image or infographic is all the more helpful to increase that rate.
The human brain is wired for visuals
Source: NeoMam Studios
Visual reports are extremely impactful, and this is why they are also appreciated when it comes to manipulating data or influencing audiences with misleading statistics. The way human brain processes information will always favor charts and drawings over numbers in spreadsheets. This is purely physical, as eyes are a physical extension of the brain and half of our brain is dedicated to the visual function. Studies show that 65% of the population is composed by visual learners, and that 90% of the information transferred to the brain is visual. At the same time, visuals are processed 60,000 times faster than text.
From raw data to “dataviz”
The journalist and author Phil Simon explains in his book The Visual Organization: Data Visualization, Big Data, and the Quest for Better Decisions that today more than ever in the professional world, managers and CEOs are asked to take their decisions based on data and that a new “data-oriented mindset” is spreading through the business world. Data visualizations -or dataviz- are becoming an ingredient more and more common and more and more companies are equipping themselves with data visualization tools. These tools do not gain in popularity because it is a hype; they largely relieve companies from hard, time-consuming data mining and examination and help gaining great amounts of time. From easy and equal data access to better analyses, enhanced experiences and faster decision-making, modern BI tools bring numerous benefits to your company. They are for a clear majority cloud-based, which fosters a collaborative work environment; their self-service character enables independent work, and the dashboards they provide allow you to visualize data with a smooth, easy-to-understand display. Besides, most of them have almost always a “real-time” feature, enabling you not only to have access to the latest version of your data, but also to have a better interaction since the hard work of replacing old data with new one is no longer done manually.
Why you should switch to visual data information for your business?
Assimilate data in a valuable, effective way and understand it faster.
We might be grown-ups, but we never say no to a little bit of entertainment or play. Data viz have this incredible power of bringing boring/complicated and endless spreadsheets into a compelling visual that helps the brain connect to the topic faster. As said above, we process information more easily with illustrations, all the more when the interaction with it is recreational, as it can sometimes be with some charts.
It is easier to visualize patterns and relationships with dashboards & charts than spreadsheets.
Another main advantage of dashboards and charts is the enhanced facility to spot connections and relationships between different variables. When a lot of data is at stake, some less obvious trends or correlations can be undetected with figures in spreadsheets. Thanks to data visualization, that is no longer the case. In addition, spotting those connections will not only highlight some important material, but also help keep them under watch, enable to draw some conclusions and possibly forecast future behaviours or trends.
It provides leaders with new insights about their customers or the market they are in, so that new business opportunities can be grabbed more easily but also act on what they observe.
The possibility to see the correlations (which, of course, are not always linked by causation) can greatly help managers and leaders in finding the root cause of a problem, and thus take the appropriate measures.
Anything that is off trend can be spotted immediately and action taken
Directly linked to what is written above with correlations, relationships and trends, we can immediately pinpoint what is off trend and not working. You can thus identify areas that need attention or improvement. This also enables a faster decision-making from the management, whether to recalibrate or address any potential issue.
But you can also count on BI software’s artificial intelligence, which lets you set intelligent alerts, with pattern-recognition or neural network alerts for instance. Thanks to such a feature, you can be informed immediately as an unexpected event happens or if you reach a set goal, and have control over what affects and stimulate your business.
Communicate to others.
Last but not least, an important aspect of dataviz is that it helps you greatly with communication, as we have seen earlier. To communicate properly with it, it requires the same path you use when writing down your business reports: you should first understand the data you want to visualize (especially if you work with big amounts of data with lots of variables). Then, identify what you want to convey from it. Know your audience, how they process visual information (baby-boomers’ visual understanding is quite different from millenials’ for instance). From that knowledge, you should use the visual accordingly to the audience you have in front of you, so that your message is efficiently conveyed.
A picture is worth a thousand numbers
…especially when you are trying to understand thousands to millions of variables, that possibly hold connections and trends you need to be aware of. Once you know it, you can create compelling visuals after familiarizing yourself with specific techniques and tips for dataviz that are flourishing over the internet. The data story you want to tell will also rely on it. So, remember: keep it simple! Bear in mind that “KISS” acronym: Keep It Simple, Stupid. Sometimes, an overload of possibilities pushes us to use them all, to the cost of clarity and comprehension.