Data Visualization: How to Tell Number Stories with Pictures
“Graphical excellence is the well-designed presentation of interesting data — a matter of substance, of statistics, and of design. Graphical excellence consists of complex ideas communicated with clarity, precision and efficiency. Graphical excellence is that which gives to the viewer the greatest number of ideas in the shortest time with the least ink in the smallest amount space.” − Edward R. Tufte
Financial planning and analysis professionals are increasingly using charts and graphs to visualize data, interact with information, and present it to senior management and the board to tell stories and drive important conversations.
Graphical information is more intuitively absorbed in our minds and can capture large amounts of data in a much more succinct format, allowing FP&A to spot and show trends, patterns and anomalies more effectively. Using graphics, finance professionals can tell better stories, pinpoint action items, and create effective dashboards that allow management to see the business at a glance. These dashboards need to be tailored to audiences — more high-level for the board, more detailed for operations. However, they should all draw on the same set of data, or version of the truth.
FP&A professionals are only beginning to use high-level visualization to interact more effectively with their data, perform their own analyses, validate hypotheses, ask deeper questions, and prepare presentations for senior management. They can do so at increasing rates of speed, which means more time to think and analyze, more dynamic, real-time analysis and reporting, and less time spent collecting data and struggling with creating charts.
New tools are emerging that allow analysts to use data visualization to dig into patterns and identify problem areas quickly, often tied directly to the company’s performance database. Going forward, interactive data tools will allow finance professionals to not only confirm hypotheses, but ask additional questions and continue to interact with the data to explore new areas, thus providing continuous feedback to management.
As the use of data visualization becomes more widely used by finance, which many say is lagging compared to areas like marketing and sales, it will unleash a greater power of analytics and enable professionals to deal with an increasing amount of data.
Introduction: The Trend
Survey shows more finance professionals are looking to data visualization to help solve problems, identify patterns and anomalies, and understand what’s driving their organizational performance.
The trend toward greater use of visualization among FP&A professionals is still growing. “A lot of them are still focused on numbers,” said Craig Schiff, president and CEO of BPM Partners, a vendor-neutral advisory services firm specializing in business performance management (BPM) and business intelligence solutions. However, the data from the 2014 BPM Pulse Survey of finance professionals shows the desire for change is strong. Asked if they require data visualization beyond typical charts or graphs offered in Excel, 40 percent of the finance professionals surveyed responded that they do. “That’s a large and growing number,” Schiff noted.
Link to full article: https://www.bpmpartners.com/wp-content/uploads/2018/07/FPAGuideDataVisualizationvF.pdf