Research shows that the human retina can transmit data to the brain about 60,000 times faster than it can transmit simple text! On top of processing visuals faster, people retain visual information at more than three times the rate of text alone. The speed with which we process visual data is important, not just for expediency, but because we deal with increasingly large volumes of data we need to be able to communicate a lot with a little. These are just some of the reasons data visualizations are used more and more by organizations that want to make better decisions to drive business performance.
A Simple Definition
Many view data visualization as just a recent term for what has long been known as visual communication. But, data visualization is not just a new buzzword, it is an entire field of study. There are universities all over the world that offer degrees, some even masters degrees, in data science with an emphasis in data visualization. It's not a new concept, just new terminology. For finance and accounting professionals who frequently communicate numeric information, data visualization is particularly relevant. For clarity, let's look at a simple definition so that we are all on the same page when we talk about data visualization. Data visualization is simply the graphic representation of quantitative information.
Show, Don’t Tell
The old, “a picture is worth a thousand words” concept really comes in handy when you have to make a point that could take a lot longer without the benefit of visuals. Let's look at a simple example. Let's look at a very simple shape like a square. If we were to try to convey the idea of a square to someone using only text we might say, a square is a four-sided flat shape with straight sides, a regular quadrilateral, with four equal sides and four equal angles, where every interior angle is a right angle (90°). Whew! What a mouthful. While that might be a perfectly fine, accurate description of a square, wouldn't a visual image of a square be a much more efficient way to get the point across?
Not only is the visual image of a square quicker and easier to understand, but you could see that it is a square from across the room, which you could not do with the text. Think about the impact of that if you're developing a dashboard to communicate lots of information. How valuable is it for your end users to be able to understand something in an instant?
Spot Things We Otherwise Couldn't/Wouldn't
Visual imagery helps us identify relationships more easily. Whether it’s the parts of a whole, like in a puzzle...
...or a connection that is easy to see, but hard to discern using logic, visuals sometimes make relationships clearer.
Kurt Koffka said of visual imagery, “The whole is other than the sum of the parts.” Koffka is one of the psychologists that developed the Gestalt principles of visual perception, which include a handful of principles of visual perception. Simply put, data visualization helps us make more of data than merely the sum of its parts.
Many organizations all over the world have jumped in with both feet using data visualization. Some of the biggest players in a wide variety of industries have been using data visualization tools for years, including Audi AG, Bank of America, Barclays, Citigroup, ConocoPhillips, and Exxon Mobil to name just a few.
Visualizations Can Be Interactive
While finance and accounting professionals frequently communicate numeric data, they are not the only ones using data visualizations. Many professions use them. Some of the visualizations I've run across that were created by marketers illustrate some novel and dynamic uses of data visualization tools. Here are a couple you might like that make use of interactive visualizations:
These visualizations were created to create engagement and they are good examples for anyone who might want to get users of their communications more involved and engaged. No matter your audience, getting them engaged with the data boosts understanding, retention and leads people to take more action.
If you communicate data at all, it is worth investing some time to explore data visualization. There is a wide variety of tools available to make creating visualizations easier than ever before. With a modest investment of time you can try different options, come up with your wish list of functionality and narrow the field. Before you know it, you'll be creating visuals that take how you communicate information to a whole new level.
The article was first published in Unit 4 Prevero Blog