Why is Data Visualization Important? A Guide for Your Organization

A question we often get is, “Why is data visualization important for my organization?” To put it simply, the amount of data created worldwide continues to grow each year. In fact, over 402.7 million terabytes of data are generated every day. These estimates present an opportunity for your business to increase revenue and achieve long-term success. 

One way your organization can benefit from the large volumes of data available in the world is through data visualization. So, why is data visualization important? And what are the different types of data visualization? More importantly, what is this technique? In this guide, we’ll break it all down.

What is Data Visualization?

To “visualize” something is to form a clear picture of it in your mind. As such, data visualization is important because it can help make your organization’s data architecture easier to understand and interpret just by looking at it. As for data visualization tools, this technique leverages visual elements like charts, maps, and graphs to help both technical and non-technical audiences, such as those with no background in data analysis, better understand the data they’re reviewing. Data visualizations are generally more visually appealing than tabular data or text, in addition to being more easily digestible and generally self-explanatory.

What Are Examples of Data Visualization?

When you think about data visualization examples, you probably think of pie charts or graphs. While these are some of the most common types of data visualization, you would only be scratching the surface when it comes to data visualization techniques. Here is a comprehensive list of data visualization types:

• Bar charts: This data visualization example is ideal for comparing categories of data using rectangular bars. 

• Line charts: Data visualization that displays trends over time or relationships between continuous variables by connecting data points with lines.

• Pie charts: Show parts of a whole, useful for illustrating percentages.

• Histograms: A data visualization tool that shows the distribution of continuous data by dividing it into intervals or bins and representing frequencies with bars.

• Heat maps: Represent data values with colors on a grid. They are particularly useful for visualizing patterns or concentrations in large datasets.

• Tree maps: Visualize hierarchical data structures using nested rectangles. The size of each rectangle represents a quantitative value, while the hierarchy is shown by the nesting of rectangles within larger ones.

• Network diagrams: This data visualization illustrates the relationships between interconnected entities, such as nodes and edges. They are commonly used in social network analysis, systems biology, and other fields.

• Word clouds: Visually represent text data by displaying words in varying sizes, with larger words indicating higher frequencies or importance within the dataset.

• Box plots: Also known as box-and-whisker plots, this data visualization technique provides a visual summary of the distribution of a dataset, including measures of central tendency and variability, as well as identifying outliers. 

The Benefits of Data Visualization

So, why is data visualization important for your organization? Because of the different roles it plays when adopted by a business. These can include:

Enhancing Communication

Communication between data analysts and other business stakeholders is inevitable if your organization deals with data, be it customer data, sales figures, market trends, or any other type of information. However, more often than not, communication issues usually arise because of the lack of a “common language” between these two sets of stakeholders.

Data visualization is important because it acts as the middle ground between these two sets of stakeholders. Instead of presenting stakeholders with raw numbers or lengthy reports, the right data visualization tools offer intuitive and digestible insights, making it easier for non-technical audiences to grasp key findings. This way, technical and non-technical stakeholders can both have meaningful and productive discussions around data-driven insights.

Supporting Strategic Decision-Making

Data visualization helps reveal patterns, trends, and relationships that may have otherwise stayed hidden in large and complex datasets. These insights are important for making business decisions based on pricing strategies, the supply chain, and more. For instance, if your business plans on expanding into new markets, a strong data visualization strategy can help identify untapped customer segments, assess market demand, and optimize pricing strategies to maximize profitability and competitiveness.

Driving Innovation

Data visualization can help reveal hidden opportunities for innovation and growth. For instance, if you uncover a consistent preference for ethically sourced products after visualizing customer purchase patterns, you could innovate by sourcing materials from sustainable suppliers and launching a new line of eco-friendly products to meet this demand.

Improving Data Literacy

Data literacy among all staff in your organization is essential to reaping the benefits of using data for business decisions. One way to enhance data literacy is by incorporating interactive data visualizations into employee training materials, presentations, and reports.

Data Visualization Best Practices

As with most processes, you must approach data visualization strategically to get the best possible outcomes:

• Understand your audience: Before creating data visualizations, consider your target audience and their level of expertise with data. Then, tailor your visualizations to meet their needs and preferences.

• Simplify and focus: Keep your data visualizations simple and focused to avoid overwhelming your audience with unnecessary information. Eliminate clutter, unnecessary labels, and distractions.
• Provide Context: Ultimately, data visualizations are important because they help people better understand important data. Always provide context for your visualizations so your audience can efficiently analyze them.

Leverage Data Visualization With SOLTECH

Data visualization is your gateway to making informed business decisions, driving innovation, and placing your organization at a competitive advantage. But to do so, you need a partner who understands why data visualization is important. Learn more about our Data & Analytics services or connect with us for a free consultation.

FAQs

Why is data visualization important?

Data visualization is important because it helps identify patterns, trends, and insights quickly, enabling better decision-making by simplifying complex data for easier interpretation and communication.

What is data visualization?

Data visualization is the graphical representation of data and information using charts, graphs, and maps to make complex data more understandable and accessible.

What are data visualization tools?

Data visualization tools are software applications that help represent data visually through charts, graphs, and other visual elements. They enable users to analyze and understand complex datasets more easily.

How do I choose the right data visualization?

Consider the type of data you have, your audience, and the purpose of the visualization. Factors like data complexity, relationships, and patterns determine whether to use charts, graphs, maps, or other visual forms.

Thayer Tate

Thayer is the Chief Technology Officer at SOLTECH, bringing over 20 years of experience in technology and consulting to his role. Throughout his career, Thayer has focused on successfully implementing and delivering projects of all sizes. He began his journey in the technology industry with renowned consulting firms like PricewaterhouseCoopers and IBM, where he gained valuable insights into handling complex challenges faced by large enterprises and developed detailed implementation methodologies.

Thayer’s expertise expanded as he obtained his Project Management Professional (PMP) certification and joined SOLTECH, an Atlanta-based technology firm specializing in custom software development, Technology Consulting and IT staffing. During his tenure at SOLTECH, Thayer honed his skills by managing the design and development of numerous projects, eventually assuming executive responsibility for leading the technical direction of SOLTECH’s software solutions.

As a thought leader and industry expert, Thayer writes articles on technology strategy and planning, software development, project implementation, and technology integration. Thayer’s aim is to empower readers with practical insights and actionable advice based on his extensive experience.