The impact of data visualization in strategic decision-making

Data Visualization

The exploitation of data represents a major challenge for companies. In the digital age, big data has paved the way and allows organizations to make better decisions based on data: this is called data visualization. Data analysis and visualization bring together all the techniques that implement data visualization. The goal is to transform raw and complex data into visual representations so that they can be easily interpreted.

The applications of data visualization are numerous: understanding the evolution of sales, forecasting the needs of the next quarter, identifying key performance indicators, convincing an investor during a presentation… This search for value is at the heart of the business challenges of organizations.

Digital Data Explosion

Every day, more than 2.5 quintillion bytes of data are generated. According to recent estimates by Statista, the annual volume of digital data created globally has increased more than twenty-fold over the past decade, and forecasts predict a three- to four-fold increase in the annual volume of data created every the five years.

Domo’s traditional “Data never sleeps” infographic, which quantifies the data generated every minute on the Internet, shows that we are creating more data every year. The growing democratization of connected objects and the advent of 5G technology would be the main drivers of this explosion of digital data.

In this context, many companies have to manage massive amounts of data. Beyond the problem of storage and retrieval, it is also necessary to be able to analyze, interpret and communicate this data. According to the “Big Data – Big Failure” study carried out by Pure Storage, 72% of companies admit to collecting data that they never use, the lack of time (48%) and the lack of internal skills to process this data. (46%) would be at the origin of these abandoned data.

The concept of data visualization

Data visualization is based on Gestalt theory (also called form psychology). This theory starts from the postulate that the human brain, faced with a set of complex information, seeks to visually structure what it perceives in order to facilitate understanding. The brain is indeed more comfortable interpreting visual data: visuals are processed 60,000 times faster than texts and 90% of the information transmitted to the brain is visual (Source: Thorpe, Fize & Marlot. Speed of processing in the human visual system, Nature). It should also be noted that the eye contains 70% of our sensory sensors. Thus, when the retina is confronted with an image, information such as shape or color is sent simultaneously to different parts of the brain to be immediately processed. Words, on the other hand, require linear processing which requires more time and energy from our brain to understand and react.

Data visualization facilitates decision making

Data visualization is increasingly used in business to address massive data creation and processing challenges. Its use brings many benefits and helps to facilitate strategic decision-making.

Simplify information to make data easier to understand

Large quantities of raw data are often difficult to decipher. Data visualization makes it possible to sort the available data to focus on the essentials. This technique formats the most useful data sought by the recipient in order to make it easier to understand. When data is easily interpretable, it simplifies decision-making.

Thanks to the use of data visualization, decision-makers can easily interpret vast amounts of data in a clear and coherent way, identify relevant information or even identify key performance indicators.

Accelerate decision making

Because data in visual form is more easily understood, data visualization represents a significant time saver and can increase the decision-making process. Access to data is faster, more accurate, and more efficient, important data is put forward, which reduces the margin of misunderstanding and reading error, and speeds up processes. Thanks to data visualization, at a glance, you can have a quick and understandable report of the situation.

Compare different data sets

Research has shown that viewing the decision-making environment from multiple perspectives enhances the decision-maker’s ability to make more informed choices.

After all, data visualization is the ideal complement to storytelling since it allows you to tell a story with data. We often associate data visualization and graphic representations, but data visualization goes further since it involves creative professions such as video animation or web design.

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