What is Data Visualization and Its Importance?

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01st Mar, 2023
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What is Data Visualization and Its Importance?

We live in a world where data is constantly being generated. From Facebook posts to sales figures, data is everywhere. Any business today that wants to be successful needs to have a good handle on data. This is because data is essential for making informed decisions that can help improve business operations and financial outcomes. And while data is important, they can be very difficult to interpret. This is where data visualization comes in.

You may have come across the term "data visualization" before, but what is data visualization and why is it important? Data visualization is the process of turning data into visuals that are easy to understand. It is used in various fields, including business, finance, healthcare, and education.

Thus, in recent years, there has been a growing demand for data visualization skills, leading to the development of numerous Business Intelligence and Visualization Courses. These courses can provide a valuable overview of the different types of data visualizations and how they can be used to improve business operations. Till then, let's take a closer look at the concept to understand the importance of data visualization in different industries. 

What is Data Visualization?
what is data visualization

Data visualization is the process of creating visual representations of data sets to better understand the underlying information. These visuals can take many different forms, but often include charts, graphs, and maps. The goal of data visualization is to make complex data more accessible and understandable, and it can be used in a variety of contexts, from scientific research to business analytics.

Data visualization is sometimes used interchangeably with data analysis, but the two terms are not quite the same. Data analysis focuses on understanding the underlying meaning of data sets, while data visualization focuses on creating visual representations of that data. Data visualization can be a valuable tool for both data analysts and laypeople alike, as it can help to make complex information more digestible.

Important features of data visualization include: 

  • Clear Headings and Keys 
  • Obvious Trends  
  • Lots of Data/Evidence  
  • Relevant Comparisons  
  • Add design elements  
  • Consolidated Information  
  • Summaries of Key Points  
  • Simple Analysis 

Why is Data Visualization Important?

Here are some pointers to understand why data visualization is important -

1. Importance of Data Visualization in Healthcare

Healthcare is an industry that relies heavily on data. From patient medical records to insurance claims, there is a lot of data that needs to be collected, analyzed, and interpreted. Data visualization plays an important role in healthcare by allowing doctors and other medical professionals to make better-informed decisions.

For example, let's say a hospital wanted to reduce the number of patient readmissions. They could use data visualization to look at readmission rates over time, identify which types of patients are more likely to be readmitted, and develop interventions to target those high-risk patients.

2. Importance of Data Visualization in Analytics

Analytics is the process of turning data into insights. Data visualization is a key part of analytics because it allows analysts to take a huge dataset and distill it down into something that can be easily understood and interpreted.

Without data visualization, analysts would be stuck looking at raw data all day long without being able to identify any patterns or trends. But with data visualization, analysts can quickly see relationships between variables and make better-informed decisions.

3. Importance of Data Visualization in Business Intelligence

Business intelligence (BI) is the process of transforming raw data into actionable insights. Data visualization plays an important role in BI because it allows businesses to see their data in a new light and make better-informed decisions about their overall strategy.

For example, let's say a company wanted to increase sales by 10% this year. They could use data visualization to track sales over time, identify which products are selling well and which ones are not, and develop marketing campaigns and targeted promotions accordingly.

4. Importance of Data Visualization in Data Science

Data science is all about extracting insights from large datasets. Data visualization plays an important role in data science by allowing scientists to visualize their data and find patterns that are otherwise impossible to discover. 

For example, let's say a scientist was studying a disease and wanted to find out which genetic factors were associated with it. They could use data visualization techniques like cluster analysis or heat maps to try to find groups of genes that are similar to the disease group and then further investigate those genes.

5. Importance of Data Visualization in Machine Learning

Machine learning is a subfield of artificial intelligence that deals with the design and development of algorithms that can learn from data. Data visualizations are important in machine learning because they can be used to understand complex datasets and identify patterns. Machine learning algorithms can then be developed to automatically detect these patterns.

For example: Google's PageSpeed Insights tool uses machine learning to automatically analyze website performances and provides recommendations on how to improve them.

6. Importance of Data Visualization in IoT

The Internet of Things (IoT) is a network of physical devices connected to the internet that are able to collect and share data. IoT devices can include everything from fitness trackers and smart thermostats to industrial machines and self-driving cars. Data visualization is important for IoT because it helps make sense of the enormous amount of data being generated by these devices.

For example: Data visualization can help detect issues and problems with the IoT devices so that the company can take corrective action before they cause major disruptions. 

7. Importance of Data Visualization in Big Data Analytics

Big data analytics can be very overwhelming because of the sheer volume of data that is involved. Data visualization can help us make sense of all this data by helping us identify correlations and structures that we would not be able to see otherwise.

For example, if we are looking at a dataset with millions of rows, it would be very difficult to find patterns without data visualization. But by utilizing a visualization tool, we can easily find patterns in the data.

8. Importance of Data Visualization in Business Analytics

Business analytics deals with understanding and analyzing business data so that businesses can make better decisions. Data visualization plays an important role in business analytics because it helps businesses see the latest trends and patterns.

For example, if we are looking at sales data over time, it might be difficult to spot trends without data visualization . However, if we use a tool like Tableau or Google Charts to visualize the data ,we would be able to see any ups or downs in sales much more easily.

Who Uses Data Visualization?

When it comes to data visualization, there are really no limits to who can benefit from using it. 

Businesses can use data visualizations to identify trends in customer behavior, track the performance of marketing campaigns, or predict future sales. Governments can use data visualizations to map crime hot spots, track the spread of diseases, or monitor environmental parameters. And individuals can use data visualizations to organize their personal finances, plan their travels, or keep track of their fitness goals.

In short, data visualization is a versatile tool that can be used by anyone who needs to understand and communicate complex information.

What Are The Benefits of Data Visualization?
benefits of data visualization

There are many benefits of data visualization. Some of them are:  

1. Helps You See Trends and Patterns

One of the main benefits of data visualization is that it helps you to see trends and patterns that you may not be able to see if you were just looking at the data itself. This is because our brains are wired to process information visually. When we see data represented in a visual way, it is easier for us to see relationships and patterns.

For example, let's say you are trying to decide whether or not to invest in a certain stock. If you were just looking at a table of numbers, it would be difficult to tell if the stock was increasing or decreasing in value over time. However, if you were looking at a line graph of the same data, it would be much easier to see that the stock was slowly but steadily increasing in value over time. This would allow you to make a more informed decision about whether or not to invest in the stock. 

2. Helps You Make Better Decisions

Another benefit of data visualization is that it can help you make better decisions by providing insights that you may not have otherwise had access to. For example, let's say you are trying to decide which product to sell in your online store. You could look at a table of sales figures for each product, but this wouldn't give you much information about which product is most popular with your customers.

The same data can be visualized as a bar chart, making it much easier to see which product sells the most units and generates the most revenue. This would allow you to make a better decision about which product to sell in your store. 

3. Helps You Communicate Your Findings More Effectively

Data visualization is also beneficial because it can help you communicate your findings more effectively to others. This is especially important if you are presenting your findings to people who are not familiar with data analysis or statistics.

For example, let's say that you are presenting your findings from a customer satisfaction survey to your boss. If you were just giving her a list of percentages for each question on the survey, she might not be very interested in what you have to say. 

However, if you were showing her a bar chart with the results from the survey, she would be able to quickly see how satisfied or dissatisfied customers were with different aspects of your business. This would allow her to understand your findings more easily and make better decisions about where to allocate resources within the company.  

4. Data Visualization Helps Users See Outliers

Another benefit of data visualization is that it helps users see outliers in data sets. An outlier is a value that differs significantly from the rest of the values in a data set.

For example, if you are looking at a data set of weights, one outlier might be a weight that is twice as heavy as all of the other weights. Data visualization makes it easy to spot outliers so that you can investigate why they are different from the rest of the values in the data set.

5. Data Visualization is Easy to Use

Data visualization is not only powerful; it is also easy to use and learn. There are many software programs that allow users to create stunning visualizations with just a few clicks of a button. Program such as Power BI, Tableau, Apache Superset are some of the more popular tools that are used.

Additionally, there are many online tutorials that show users how to create visualizations using different software programs. As a result, anyone can learn how to create helpful visualizations, regardless of their prior experience.

Which Data Visualization Techniques are Used?

Different types of data visualization techniques are used for different purposes. Here are 7 types of data visualization techniques you should know about.

1. Pie Chart

A pie chart is a circular chart that shows how much each category contributes to the whole. It is divided into sections (or "slices"), each representing a proportion of the total. Pie charts are typically used to show how much each category contributes to a total (e.g., how different product lines contribute to total sales).

2. Bar Chart

A bar chart is a graph that shows how much each category contributes to the whole. It is divided into vertical bars, each of which represents a proportion of the total. It is common to use bar charts to compare different categories (e.g., compare sales of different product lines).

3. Histogram

A histogram is a graph that shows how often something occurs. It is divided into vertical bars, each of which represents how often something occurred within a certain range. The purpose of histograms is to show how often something occurs (for example, how many people click on a certain button).

4. Gantt Chart

A Gantt chart is a type of bar chart that shows when tasks will be performed. It is divided into horizontal bars, each of which represents a task that will be performed at a certain time. Gantt charts are typically used to show when tasks will be performed (e.g., when different parts of a project will be completed).

5. Heat Map

A heat map is a type of chart that uses colors to show how much each category contributes to the whole. It is divided into rectangles, each of which represents a proportion of the total. The use of heat maps usually illustrates how much each category contributes to a whole (e.g., how different product lines contribute to total sales).

6. A Box and Whisker Plot

A box and whisker plot is a graph that shows the distribution of data. It is divided into four sections: the box, which represents the middle 50% of the data; the whiskers, which represent the rest of the data; and the outliers, which represent the data that falls outside the whiskers.

It is common to use box plots to show the distribution of data (e..g, how different products are selling in different regions).

7. Waterfall Chart

A waterfall chart is a graph that shows how much each category contributes to the whole over time. It is divided into vertical bars, each of which represents a contribution or decrease in value over time. A waterfall chart shows how much something has changed over time (e.g.., how sales have changed over time). 

So, now you can understand the importance of data visualization in presentations by realizing the number of techniques designed to make data visualization even easier to understand.

Data Visualization Tools

There is huge importance of data visualization tools because they help us make sense of large amounts of raw data by turning them into something that is both easy to understand and visually appealing. The five best data visualization tools currently on the market are Tableau, Dundas BI, Jupyter Notebook, Zoho Reports, and Google Charts. Let’s go through them in detail. 

1. Tableau

Tableau is a powerful data visualization tool that enables users to quickly and easily create interactive charts, graphs, and maps. Tableau is one of the most popular data visualization tools on the market, and for good reason—it's easy to use, highly customizable, and very user-friendly. One of the best things about Tableau is that it offers a free version for personal use, so if you're just getting started with data visualization, Tableau is a great option.

2. Dundas BI

Dundas BI is another popular data visualization tool that offers a wide range of features and customization options. Dundas BI also has an intuitive user interface which makes it easy to use even for those who are new to data visualization. However, one downside of Dundas BI is that it is not cheap.

3. Jupyter Notebook

Jupyter Notebook is a top-rated data visualization tool that is popular among developers and data scientists. Jupyter Notebook enables users to edit and upload documents that contain live code, equations, visualizations, and narrative text.

While the Jupyter Notebook doesn't have as many features as some of the other options on this list, its Visually appealing results make it a great option for those who are just getting started with data visualization and who are working with limited budgets. 

4. Zoho Reports

Zoho Reports is another great option for those who are looking for an affordable yet feature-rich data visualization tool. Zoho Reports offers users the ability to create stunning reports and dashboards with ease.

Additionally, Zoho Reports includes built-in collaboration features so multiple users can work on projects simultaneously. It integrates online reporting services and Business Intelligence for seamless report creation and modification.

5. Google Charts

Google Charts is the most used tool that enables users to create a variety of different types of charts and graphs (including pie charts, bar graphs, line graphs, etc.). Google Charts is simple to use—simply enter your data into a spreadsheet and then select which type of chart you want to create. Within minutes, you'll have created a beautiful chart that's ready to share with others.

The important features of data visualization tools make it easy for individuals to create data that is easy to understand.

Examples of Data Visualization

There are endless possibilities for what data visualization can be used for. Here are 5 great examples of data visualization. 

1. Movie : Explanation of the Plot

We all know that movies are fiction, but they are often based on real events or at least contain some truth within them. Data visualization can be used to explain the plot of a movie by breaking down the different elements and how they fit together. In the example below, you can see how the plot of the movie "Inception" (fictional name) is explained through data visualization. 

2. Art: Analyzing the Color Palettes of Great Artworks

Have you ever wondered what makes a great work of art so visually appealing? Chances are, it has something to do with the colors used in the painting or sculpture. There is a huge importance of color in data visualization. By analyzing the color palette of great works of art, we can begin to understand why they're so visually pleasing. And thanks to data visualization, we can do this without being experts in art history. 

3. Philosophy: A Visual Depiction of Ideas

Philosophy can be difficult to wrap your head around, but data visualization can help make complex philosophical concepts more understandable. For example, imagine trying to understand Plato's Allegory of the Cave without any visuals to guide you. You couldn't do it! But by representing Plato's ideas visually, we can gain a better understanding of his philosophy as a whole.

4. National Geographic: Cartography

For over 100 years, National Geographic has been using cartography—the study of maps—to visualize our world in new and interesting ways. From detailed street maps to 3D globes, National Geographic has produced some of the most iconic maps ever made. And thanks to advances in data visualization, they continue to push the boundaries of what's possible in cartography today.

5. Visualizing the History of Pandemics

Pandemics have shaped our world for centuries, and data visualization can help us better understand their impact on human history. For example, a graphic can show how different pandemics have affected different parts of the world over time. By visualizing this data, we can see patterns that might otherwise be invisible—and learn from them so that we're better prepared for future pandemics. 

Common Data Visualization use Cases

When used correctly, data visualization can be an invaluable asset in a wide variety of business applications. Here are 5 common use cases for data visualization.

1. Sales and Marketing Analytics

There is a huge importance of data visualization in business especially in sales and marketing analytics. By visualizing data related to marketing campaigns, website traffic, and sales pipeline activity, businesses can gain valuable insights into what's working and what isn't. This information can then be used to fine-tune marketing strategies and allocation of resources. Additionally, analyzing past performance can help businesses anticipate future trends.

2. Operational Analytics

Data visualization can also be used for operational analytics. This involves using data to track key performance indicators (KPIs) and understand how different parts of the business are performing. Looking at KPIs over time can help identify areas of improvement as well as potential issues before they become problems. Additionally, operational analytics can be used to benchmark performance against similar businesses or industry averages.

3. Financial Analytics

Many businesses use data visualization for financial analytics. This includes tracking income, expenses, profitability, cash flow, and other key financial metrics. visualizing this data can help businesses gain a better understanding of their financial health and make more informed decisions about where to allocate resources. Additionally, analyzing financial data over time can help identify trends and flag potential issues early on.

4. Risk Management

Data visualization can also be used for risk management. By identifying risks early on, businesses can take steps to address them before they become major problems. Visualizing data related to safety, quality control, compliance, and other areas of concern can help businesses keep risks under control and avoid costly accidents or disruptions. Additionally, analyzing historical data can help businesses predict and prepare for future risks.

5. Analysis of Customer Behavior

Data visualization can help identify customer segmentation, trends, and correlations that would otherwise be hidden in tabular data. By understanding customer behavior, businesses can make better decisions about marketing, product development, and operations. Additionally, data visualization can help surface unexpected customer needs and preference changes over time. 

6. Analysis of Social Comments

Social media platforms generate a huge amount of unstructured data in the form of text comments. Data visualization can help make sense of this data by identifying patterns and trends in what people are saying. This understanding can be used to improve the products and services offered by the company, as well as inform marketing and PR strategies.

Conclusion

Data visualization is a powerful tool that can help you understand your data and present it in a way that makes sense to your audience. By taking the time to learn how to use data visualization, you can improve your ability to make informed decisions, communicate complex information clearly, and spot trends and patterns in your data. KnowledgeHut Business Intelligence and Visualization Courses can help you do just that.

With the expert instructors, hands-on training, and real-world examples, you will be able to turn data into information that helps your business grow. Don’t miss out on this valuable skill – sign up for one of the courses today!

Profile

Abhresh Sugandhi

Author

Abhresh is specialized as a corporate trainer, He has a decade of experience in technical training blended with virtual webinars and instructor-led session created courses, tutorials, and articles for organizations. He is also the founder of Nikasio.com, which offers multiple services in technical training, project consulting, content development, etc.

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Frequently Asked Questions (FAQs)

1What are 3 pros and cons of data visualization?

PROS of data visualization: 

  1. Accurate analysis 
  2. Easy sharing of information 
  3. Sales analysis

CONS of data visualization: 

  1. Improper design issue.
  2. Lack of assistance.  
  3. Wrong focused people can overlook core messages.
2What are data visualization techniques?

The visualization techniques include Histogram Plot, Scatter Plot, Pie and Donut Charts, Box and Whisker Plot for Large Data, Kernel Density Estimation for Non-Parametric Data, Correlation Matrices, and Word Clouds and Network Diagrams for Unstructured Data. 

3What is the best data visualization?

Some really good data visualization tools are Tableau, Grafana, Google Charts, Datawrapper, Infogram, Chartist, FusionCharts, and ChartBlocks etc.

4What is the best way to visualize your data?

Some best  ways to visualize your data are Line chart, Indicator, Pie chart, Bar chart, Area chart, etc.

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