Magazine article Business Credit

Data Visualization: What You See Is What You 'Get'

Magazine article Business Credit

Data Visualization: What You See Is What You 'Get'

Article excerpt

"If the statistics are boring, then you've got the wrong numbers."

When statistician and data visualization pioneer Edward Tufte said the above, he didn't mean that you needed the right numbers; it is how you present data that keeps it interesting. How you present it visually to your audience, whether to your CFO or a room full of salespeople, can make a world of difference in how much of it is understood. Is your data compelling? Is it interesting? Does your audience get it? Effective communication is the goal in data visualization.

for example, can create relationships between data. Similarity also makes us think of items as belonging to the same type; the same color can be used for some figures in a row of data to convey a relationship.

Closure is another principle, in which a broken outline is perceived as a whole shape. Similarly, the principle of continuity makes us see a connection if we perceive movement. If a line chart is broken at some point, for example, we assume the data is still there-that the line is continuous-rather than a representation of missing data.

"I've had finance professionals come up to me and confess that they are not the greatest communicators and need to get better at it," said John Sanchez, managing director of the FPA Group, who recently presented the webinar "Data Visualization: Important Techniques for Finance Professionals" for the Association for Finance Professionals. "Communication is consistently rated as the No. 1 skill, and the No. 1 skill most lacking, among finance professionals. I look at data visualization as a communication tool. That's all it is."

"With modern attention spans shrinking and the amount of data available to credit professionals increasing, it's imperative to be well-versed at sharing and communicating data," said Charles Edwards, CCE, senior regional credit manager at Ferguson Enterprises. "Those who learn to make the complex simple and the boring appear interesting will be very valuable assets in our data-driven business climate."

Seeing Is Understanding

Visual information is processed 60,000 times faster than text, and the human retina can transmit data at the same rate as an Ethernet connection, according to Sanchez. Moreover, people retain visual information at more than triple the rate of text alone.

In his webinar, Sanchez presented six gestalt principles of data visualization from which we draw meaning out of chaos. Proximity is the principle by which we assume items belong together when they are close to each other; the spacing between columns in a financial statement, The principle of figure/ground is useful in considering background colors for charts; think of the optical illusion in which you see either two profiles facing each other or a vase. Symmetry is also important in data visualization so as not to give your audience the impression that something is out of balance or missing.

"Having too much information is the biggest challenge," Sanchez said. Edwards agrees. "The biggest stumbling block I see is making the data appear too complex," he said.

Form over function is another challenge, particularly with the capabilities for graphics in new software, Sanchez said. A chart may look amazing in 3D, but that 3D design may make it hard to interpret the data. "If your purpose is for the information to look cool, that's fine," he said. …

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