Data visualization: importance, benefits and challenges
In recent years, the importance of using data has been emphasized more than ever. Being dubbed the new “oil” or having a power as powerful as the Internet has made data an ever-evolving area of expertise. The pursuit of data analytics has become one of the core strategies for companies looking to optimize every vertical of their business.
Although data analysis is a specialized field, understanding it is not as straightforward as it seems. The challenge for professionals who work in data like Data Scientists or Data Analysts is to present the same thing in a way that becomes understandable by everyone in the organization.
This is where data visualization comes to the rescue. It helps in presenting data in a simple, easy and understandable way. In this article, we take a look at some of the basics of data visualization. Additionally, we also take a 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 it is. This is the problem with data when it has not gone through the visualization stage. A simple way to understand data visualization is to think of it as a graphical overview of information. Data visualization derives its importance from the way the human brain receives and processes information.
- The visualized data is much more understandable and helps us understand the following important elements:
- Data Time – one of the most common reasons data visualization is used in organizations is to show changes over time,
- Frequency of Occurrence / Event – data visualization helps to understand how often a significant business event occurs eg sales.
- Correlations Between Items – Data visualizations allow humans to understand patterns and correlations between processes. How to change one thing affects another.
- Do Market Research – Any time a business wants to do market research, it segments consumers into various data sets. It helps to understand tastes and preferences.
- Risk and Reward Assessment: Data visualization charts are used to understand how a variable will affect the risks and rewards of a process or strategy.
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Benefits of data visualization for businesses
In this section, we’ll look at some of the obvious benefits of data visualization for business organizations-
1. Help in better decision making-
Unless the data is presented in a form understood by decision makers, they will be unable to make informed decisions. If the data shows that a specific strategy delivers rich results, the CEO can make the decision to strengthen the team to further improve results.
2. Better understanding within teams and professionals-
Not everyone is good 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 based on it. Data visualization helps teams and professionals gain insight.
3. Opens up areas of opportunity and improvement-
You can’t go through a million rows of data to find opportunities. Data visualization enables the formation of data in graphs and tables that could highlight both areas of opportunity as well as issues that can be better addressed.
Data visualization challenges for business organizations
While there are tangible benefits of data visualization, it is undeniable that there are challenges as well.
First, oversimplifying data just to make it clear to others in the organization leads to compromising its integrity. Being too aggressive with visual simplification can lead to important information being overlooked.
Second, there is always the human factor to consider. Someone who is given the task of data visualization may suffer from their biases. They may strive to do something that is important to them while missing out on some areas that are important.
Third, complex spoon feeding data in visuals can become problematic if taken to extreme levels. This prevents senior management from truly engaging with meaningful data. In addition, it limits their ability to think critically and find trends and patterns on their own.
The bottom line
In this article, we’ve discussed some important areas that a piece of data visualization content should ideally cover. We’ve touched on some of the main challenges and discussed the benefits. Data visualization is a very important element in modern business organizations. If you have any other questions you’d like us to answer, let us know in the comments below.