The Art of Data Visualization
Information Management Special Reports, October 2004
Joe Shelly is senior director of Procurement and Logistics at a large manufacturing concern in the Midwest. As part of his daily responsibilities, he has to read multiple reports to see the status of all current projects and to sift through mountains of data, stored in dozens of locations and formats, to be able to make educated decisions involving hundreds of millions of dollars in purchasing, inventory management and logistics.
Joe has several enterprise resource planning (ERP) and business intelligence (BI) tools at his fingertips to help him achieve his goals but none gives him a real-time, single-view window into all the relevant data that allows him to use his knowledge of the business to seek answers and look for potential opportunities and problems. When he needs a particular piece of information, not readily available within the existing tools, he has to put in a written request to IT and wait 48 hours to get a customized report.
Joe's situation is unfortunately fairly common: even today with all the solutions available in the marketplace, most companies are not reaching their full profit potential because of the significant gap that exists between strategy and execution.
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The group within an organization (let's call them non-power users) that is largely responsible for that day-to-day execution and who make frequent decisions based on business data is clearly underserved by existing BI solutions. These solutions tend to focus on staff with a technical or a research background. Many analysts believe that to be the main reason most BI tools barely achieve 5-10 percent penetration rates within their clients' employee bases.
What is Data Visualization?
According to Thomas Weisel Partners LLC, the amount of data stored by organizations doubles every year. Further, a company's own data is one of the most underutilized and potentially valuable resources it has. Yet, while most organizations have mastered the art of collecting data, they have not mastered what to do with it. In recent years, business intelligence solutions have become increasingly popular to help organizations make sense of all this data - data from transactional systems such as enterprise resource planning, supply chain management, financial, and customer relationship management systems as well as information held in data warehouses and data marts.
In the broadly defined $4.5 billion business intelligence marketplace, there are two general areas where most vendors have failed to provide a compelling solution: access to details and data presentation. But the last couple of years have seen the emergence of niche software players focused on filling in the gap.
This segment of the market, defined as data visualization or active data visualization, fills a key void in the business intelligence spectrum by providing added functionalities (such as visual queries, dynamic data discovery or multiple linked images) that are critical in the decision-making process for most business users. It collects data from multiple sources and formats, (not always compatible) and presents it in an efficient and business-intelligent manner allowing users to quickly digest and interpret the data.
A data visualization tool also allows non-IT users to do data prospecting or data drilling, browsing through data and information to identify patterns, trends, opportunities and issues without the knowledge of data structure or programming languages.
The objective of data visualization is literally to take thousands or millions of data points and represent them in a way that non-power users can understand in seconds; unlike traditional charts or other simple ways of displaying data, which are more geared towards plotting a few hundred data points.
Unlike other forms of graphical representation, such as those used in current BI tools, information visualization is also a tool for exploring and viewing the unknown - for the discovery of critical issues, relationships and structure. With information visualization, the visuals convey critical information, allowing users to interact: explore, browse, filter, drill down and zoom. This ability to interact with the presentation lets users ask questions and then ask more refined questions. Very few people realize that the average human brain can process up to 7-8 dimensions visually and much more effectively than text.
Edward Tufte, the world's leading thinker on using visualization for information design, describes two fundamental rules for visual display:
- Maximize the Data-Ink Ratio: Every drop of ink, or pixel on your screen, ought to be information bearing. Anything that appears simply for decoration should be removed.
- Maximize Information Density: Given a choice, people prefer displays with more rather than less information. This does not mean increased clutter and may sound counterintuitive given the number of complaints from people drowning in data. However, assuming you can maintain a clear, uncluttered presentation with relevant information, the more you display, the better.
Tufte also observed that old-fashioned maps are a superior means of applying these rules, as they convey more information per square unit of display area than any other presentation technique.
In a nutshell, data visualization software puts in the hands of the right people the ability to finally convert data into intuitive, relevant, actionable information.
Why is this Critical?
Organizations have invested millions of dollars in tools that summarize information for senior executives and query and reporting tools for power users, but the managers that executives rely on to execute on their behalf have largely been ignored.
In most organizations, business users (or non-power users) don't have a way to browse through information in an unstructured manner. They are typically overly dependent on support groups such as IT or analysts to investigate unforeseen issues, and the last thing they want is more reports. As a client recently told us, "If you can't visualize the problem, chances are you won't be able to solve it."
Data visualization is critical for any organization that relies on data for its execution and, in today's data-heavy world that is just about every organization! It is critical because it has a direct impact on a company's profitability.
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