A Picture is Worth a Thousand Words: Visualization Tools for the Project-Focused Enterprise
Information Management Special Reports, April 2007
"A picture is worth a thousand words." This simple proverb conveys that complex information or ideas can be expressed with a single image. This cognitive process of seeing an image and understanding its meaning is being applied to visualization, which aims to present large amounts of data into a single image that can be absorbed and understood quickly.
Visualization is a powerful analytics and reporting tool that empowers businesses to take control of their data and quickly turn it into actionable information. A mission-critical technology in the financial services marketplace for many years, the power of data visualization tools is now being applied to project-focused organizations enabling engineering and architecture firms, IT services companies and management consulting firms to instantly discover trends and opportunities across their entire project portfolio.
Visualization provides a simple display that uses colors and shapes to depict mission-critical information about a firm's entire business, including project performance, status, trends and risks. The varying display alerts viewers at a glance of any performance issues, allowing them to focus on the most critical issues.
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Global architecture and engineering firms could have hundreds, if not thousands or more, active projects. Many of those are smaller service projects, but some include the world's largest projects ranging from sports stadiums to commercial office buildings.
With today's visualization dashboards, CEOs and other executives can see all of their company's projects based on real-time metrics that depict the health and risk of the projects within the portfolio. If the metric is profitability, the CEO can see whether particular projects are exceeding or falling below financial expectations. Or, if the receivables are off, this could be an indication that the project manager is struggling or the client is holding back on payments. Imagine how a CEO or CFO would try to visualize that information across a thousand projects.
Traditionally, those questions have been answered through a combination of lengthy financial reports and aggregated data that must be pulled in a pre-itemized or precategorized fashion. To pull a profit probability report by divisions within a global company including all underlying projects, would result in a printed report that is inches thick. Naturally, the executive would only focus on the largest projects because those will have the most significant impact on the company's overall profitability. Not so when the project portfolio is numbered in the thousands.
In an effort to address this problem of information overload, what can be done to help represent corporate information in a more visual, usable and actionable way, more specifically, in a way that an executive can look at the information in multiple ways to see if there is an underlying trend? Is the problem because a particular division is struggling with its projects? Or, are projects in a certain market sector struggling to be profitable? Has a particular project manager ever been able to bring in a project under budget? Answers to these questions are delivered through visualization tools in a way that far surpasses scouring a two-inch report.
The proven success of visualization tools for the financial services industry suggested that a similar approach would be equally valuable for project-focused organizations. Looking at a financial portfolio, stocks are typically grouped by sector where the biggest boxes in the visualization dashboard represent the size of the positions within the portfolio. The color of the box represents how that stock is doing right now, today. If the financial adviser were to see IBM as a big red square, then the adviser knows to focus on that and do something about it.
Architecture and engineering firms experience the same problem that needs to be solved: analyzing a project portfolio. Firms want to group their projects by any number of pieces of information, whether it is the divisions those projects fall under, the manager assigned to managing those projects, the market those projects represent, or the type of projects. The architectural and engineering sector would look at bridge design projects differently than they would building development projects. With today's visualization dashboard, categorization is part of the model. The size of the squares represents the size of the projects and the color represents the health of the project and its profitability.
When companies see initial visualization tools and the power they provide, there is an immediate connection because of the immediately available insight. Prior to today's visualization tools, executives and managers had to make their own inferences from pie or bar charts, which are inherently constrained by the amount of data they can represent. Up-leveling the analysis, slices on a pie chart can represent the various divisions within the company - an energy division, a high-tech division, a manufacturing division - and the color of each slice represents the profitability for each division.
These charts however, are impractical for the larger project-based companies. If the health or profitability of a particular slice appears red, then the executive or manager will want to drill much deeper. But with hundreds and thousands of projects under each slice, firms will quickly become frustrated at the difficulty of answering basic questions regarding the root of the problem and how it can be corrected.
With visualization tools, the dashboard can provide a view of all the projects that are active in the portfolio. A difference in square size represents a weighting system assigned by an algorithm tool that applies relative sizing to the projects. For instance, one thousand active projects can appear in the dashboard without a lot of corresponding information. However, when customers look at these dashboards, they focus on the big red squares. Visually, the big red squares jump right off the screen because they represent the greatest amount of risk for the company.
With this visualization feature executives can quickly see which projects are a financial threat to the company's overall success and which are immediate priorities. The small red squares - or the larger ones that are a more moderate color - are not such a threat to be worried about and can be dealt with at a later point in time.
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