By Chrisjan Pauw

Drawbacks of data visualization (1)

The old saying “A picture is worth a thousand words” is one of the main reasons we’ve seen a big movement towards data visualization tools in the last few years. According to a BPM Pulse Survey (2014), 40% of respondents were swapping their Excel charts and graphs for more sophisticated data visualization tools. And a 2017 Big Data Analytics Market Study by Dresner Advisory Services found that Dashboards and Advanced Visualizations are 2 of the top 3 critical concerns of companies, with Reporting taking the spot at the top.

Data visualizations are so effective at conveying information because they tap into how humans are hardwired to communicate: 93% of how we communicate is through visual cues; the fact is that we can process information much quicker with a picture.

While data visualizations are hugely effective at providing users with a snapshot overview of business operations, from a Business Intelligence (BI) perspective, they don't necessarily give companies the maximum value of their data. A lot of insight is left out of sight behind the picture.


You Can't Plan off a Dashboard

Data visualization dashboards are mostly non-interactive. A dashboard gives you a great static snapshot of the business position, but it generally won’t give you the option to change numbers on the front-end. Without that write-back ability, it means you will have to go back and change the source data to see a change in the visual charts.

Although not impossible, it can take a lot of time to go back and forth to change the data and formulas to reflect your company’s planned budgeting and forecasting—especially if your company grows to a certain size with millions of data points. Plus, it’s not an environment that supports real-time and efficient budgeting between employees or departments. Dashboards are not built to accommodate collaborative forecasting exercises with different what-if scenarios. This is the main reason that, for budget and forecast planning needs, users do the "same old, same old" of tossing data into Excel.


You Can't do In-Depth Analysis on a Dashboard

Data visualizations are very effective at communicating numbers, but not for doing further analysis on those numbers. This loosely relates to the previous point. If you really want to understand where a number comes from, you can’t simply drill back into the underlying data from the dashboard.

(Check out our blog: "But... does it export to Excel?")

For example, say your cash balance metric shows a significant dip compared to other months but you don’t know why. Is it because sales bonuses were paid out this month? Was there perhaps a large unexpected expense? Should you be alarmed or is it something that will correct itself in the following months? Without the ability to analyze the underlying data, you don’t know if immediate action is required.

It can be equally difficult to assess comparative performance. Suppose that you have Total Sales by region (US, Europe, Asia, etc.), but you want to know if a certain region is reaching its targets as a percentage of Total Global Sales. Unless the metric is specifically set up that way you will probably have to pop the numbers into third party software for further analysis to get the answers you want.


Business Intelligence is More than Painting a Picture on Top of Data

data visualizations best practices

Data visualization is superb for the function it performs, that is, to communicate information efficiently for fast and easy understanding.

But it should only be one element of your Business Intelligence strategy, not the full extent of it.

Many data visualization tools will limit the source and type of data input. Typically, the front-end will also be limited to the functionality its developers have built into it. This puts a restriction on the amount and level of intelligence you can glean from your data.

What you want to do is to reverse this process, whereby instead of your data being manipulated to conform to a single front-end dashboard, you consider a BI solution that can sync all your data to allow for the integration of any front-end, depending on your need. Your BI solution should give you unlimited potential as to the discoveries, or intelligence, you can extract from your data—past, present or future (aka, plan) data.

(You might be interested in our blog, Using Business Intelligence as a Strategic Planning Tool)

To extract all the valuable insights that are hidden in the mountains of data your business is producing every day, your BI solution should be an end-to-end tool with a robust backend that can not only handle collecting, sorting and warehousing the data, but also handle any query or manipulation you throw at it. It should incorporate data visualizations, but also always go beyond that to supply a single version of the truth, synced to multiple front-ends that allow for real-time, collaborative planning, budgeting, and forecasting.

At BI Tech, we make sense of large and complex data sets to create real-time models that are available to end-users for reports, analytics, and mission-critical planning exercises like budgeting and forecasting. Our aim is not just to create excellent visualizations, but also to make company data dynamically available via any front-end preference, whether it’s Excel, data visualizations tools, report writers or mobile technology. It prepares your business for the words, and questions, that go beyond a pretty picture.


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