What is Data Visualization and Why is It Important?

Data visualization is the graphical representation of information and data. By using visual elements like charts, graphs, and maps, data visualization tools provide an accessible way to see and understand trends, outliers, and patterns in data.

This practice is crucial in the data science process, as it helps to make data more understandable and actionable for a wide range of users, from business professionals to data scientists.

Data visualization translates complex data sets into visual formats that are easier for the human brain to comprehend. This can include a variety of visual tools such as:

• Charts: Bar charts, line charts, pie charts, etc.
• Graphs: Scatter plots, histograms, etc.
• Maps: Geographic maps, heat maps, etc.
• Dashboards: Interactive platforms that combine multiple visualizations.

The primary goal of data visualization is to make data more accessible and easier to interpret, allowing users to identify patterns, trends, and outliers quickly. This is particularly important in the context of big data, where the sheer volume of information can be overwhelming without effective visualization techniques.

Types of Data for Visualization

Performing accurate visualization of data is very critical to market research where both numerical and categorical data can be visualized, which helps increase the impact of insights and also helps in reducing the risk of analysis paralysis. So, data visualization is categorized into the following categories:

• Numerical Data 
• Categorical Data

Let’s understand the visualization of data via a diagram with its all categories.

To read more on this refer to: Categories of Data Visualization

Let’s take an example. Suppose you compile visualization data of the company’s profits from 2013 to 2023 and create a line chart. It would be very easy to see the line going constantly up with a drop in just 2018. So you can observe in a second that the company has had continuous profits in all the years except a loss in 2018.

It would not be that easy to get this information so fast from a data table. This is just one demonstration of the usefulness of data visualization. Let’s see some more reasons why visualization of data is so important.

1. Data Visualization Discovers the Trends in Data

The most important thing that data visualization does is discover the trends in data. After all, it is much easier to observe data trends when all the data is laid out in front of you in a visual form as compared to data in a table. For example, the screenshot below on visualization on Tableau demonstrates the sum of sales made by each customer in descending order. However, the color red denotes loss while grey denotes profits. So it is very easy to observe from this visualization that even though some customers may have huge sales, they are still at a loss. This would be very difficult to observe from a table.

2. Data Visualization Provides a Perspective on the Data

Visualizing Data provides a perspective on data by showing its meaning in the larger scheme of things. It demonstrates how particular data references stand concerning the overall data picture. In the data visualization below, the data between sales and profit provides a data perspective concerning these two measures. It also demonstrates that there are very few sales above 12K and higher sales do not necessarily mean a higher profit.

3. Data Visualization Puts the Data into the Correct Context

It isn’t easy to understand the context of the data with data visualization. Since context provides the whole circumstances of the data, it is very difficult to grasp by just reading numbers in a table. In the below data visualization on Tableau, a TreeMap is used to demonstrate the number of sales in each region of the United States. It is very easy to understand from this data visualization that California has the largest number of sales out of the total number since the rectangle for California is the largest. But this information is not easy to understand outside of context without visualizing data.

4. Data Visualization Saves Time

It is definitely faster to gather some insights from the data using data visualization rather than just studying a chart. In the screenshot below on Tableau, it is very easy to identify the states that have suffered a net loss rather than a profit. This is because all the cells with a loss are coloured red using a heat map, so it is obvious states have suffered a loss. Compare this to a normal table where you would need to check each cell to see if it has a negative value to determine a loss. Visualizing Data can save a lot of time in this situation!

5. Data Visualization Tells a Data Story

Data visualization is also a medium to tell a data story to the viewers. The visualization can be used to present the data facts in an easy-to-understand form while telling a story and leading the viewers to an inevitable conclusion. This data story, like any other type of story, should have a good beginning, a basic plot, and an ending that it is leading towards. For example, if a data analyst has to craft a data visualization for company executives detailing the profits of various products, then the data story can start with the profits and losses of multiple products and move on to recommendations on how to tackle the losses.

To find out more points please refer to this article: Why is Data Visualization so Important?

Now, that we have understood the basics of Data Visualization, along with its importance, now will be discussing the Advantages, Disadvantages and Data Science Pipeline (along with the diagram) which will help you to understand how data is compiled through various checkpoints.

Various types of visualizations cater to diverse data sets and analytical goals.

1. Bar Charts: Ideal for comparing categorical data or displaying frequencies, bar charts offer a clear visual representation of values.
2. Line Charts: Perfect for illustrating trends over time, line charts connect data points to reveal patterns and fluctuations.
3. Pie Charts: Efficient for displaying parts of a whole, pie charts offer a simple way to understand proportions and percentages.
4. Scatter Plots: Showcase relationships between two variables, identifying patterns and outliers through scattered data points.
5. Histograms: Depict the distribution of a continuous variable, providing insights into the underlying data patterns.
6. Heatmaps: Visualize complex data sets through color-coding, emphasizing variations and correlations in a matrix.
7. Box Plots: Unveil statistical summaries such as median, quartiles, and outliers, aiding in data distribution analysis.
8. Area Charts: Similar to line charts but with the area under the line filled, these charts accentuate cumulative data patterns.
9. Bubble Charts: Enhance scatter plots by introducing a third dimension through varying bubble sizes, revealing additional insights.
10. Treemaps: Efficiently represent hierarchical data structures, breaking down categories into nested rectangles.
11. Violin Plots: Violin plots combine aspects of box plots and kernel density plots, providing a detailed representation of the distribution of data.
12. Word Clouds: Word clouds are visual representations of text data where words are sized based on their frequency.
13. 3D Surface Plots: 3D surface plots visualize three-dimensional data, illustrating how a response variable changes in relation to two predictor variables.
14. Network Graphs: Network graphs represent relationships between entities using nodes and edges. They are useful for visualizing connections in complex systems, such as social networks, transportation networks, or organizational structures.
15. Sankey Diagrams: Sankey diagrams visualize flow and quantity relationships between multiple entities. Often used in process engineering or energy flow analysis.

Visualization of data not only simplifies complex information but also enhances decision-making processes. Choosing the right type of visualization helps to unveil hidden patterns and trends within the data, making informed and impactful conclusions.

The following are the 10 best Data Visualization Tools

1. Tableau
2. Looker
3. Zoho Analytics
4. Sisense
5. IBM Cognos Analytics
6. Qlik Sense
7. Domo
8. Microsoft Power BI
9. Klipfolio
10. SAP Analytics Cloud

To  find out more about these tools please refer to this article: Best Data Visualization Tools

Advantages of Data Visualization:

• Enhanced Comparison: Visualizing performances of two elements or scenarios streamlines analysis, saving time compared to traditional data examination.
• Improved Methodology: Representing data graphically offers a superior understanding of situations, exemplified by tools like Google Trends illustrating industry trends in graphical forms.
• Efficient Data Sharing: Visual data presentation facilitates effective communication, making information more digestible and engaging compared to sharing raw data.
• Sales Analysis: Data visualization aids sales professionals in comprehending product sales trends, identifying influencing factors through tools like heat maps, and understanding customer types, geography impacts, and repeat customer behaviors.
• Identifying Event Relations: Discovering correlations between events helps businesses understand external factors affecting their performance, such as online sales surges during festive seasons.
• Exploring Opportunities and Trends: Data visualization empowers business leaders to uncover patterns and opportunities within vast datasets, enabling a deeper understanding of customer behaviors and insights into emerging business trends.

Disadvantages of Data Visualization:

• Can be time-consuming: Creating visualizations can be a time-consuming process, especially when dealing with large and complex datasets.
• Can be misleading: While data visualization can help identify patterns and relationships in data, it can also be misleading if not done correctly. Visualizations can create the impression of patterns or trends that may not exist, leading to incorrect conclusions and poor decision-making.
• Can be difficult to interpret: Some types of visualizations, such as those that involve 3D or interactive elements, can be difficult to interpret and understand.
• May not be suitable for all types of data: Certain types of data, such as text or audio data, may not lend themselves well to visualization. In these cases, alternative methods of analysis may be more appropriate.
• May not be accessible to all users: Some users may have visual impairments or other disabilities that make it difficult or impossible for them to interpret visualizations. In these cases, alternative methods of presenting data may be necessary to ensure accessibility.

Effective data visualization is crucial for conveying insights accurately. Follow these best practices to create compelling and understandable visualizations:

1. Audience-Centric Approach: Tailor visualizations to your audience’s knowledge level, ensuring clarity and relevance. Consider their familiarity with data interpretation and adjust the complexity of visual elements accordingly.
2. Design Clarity and Consistency: Choose appropriate chart types, simplify visual elements, and maintain a consistent color scheme and legible fonts. This ensures a clear, cohesive, and easily interpretable visualization.
3. Contextual Communication: Provide context through clear labels, titles, annotations, and acknowledgments of data sources. This helps viewers understand the significance of the information presented and builds transparency and credibility.
4. Engaging and Accessible Design: Design interactive features thoughtfully, ensuring they enhance comprehension. Additionally, prioritize accessibility by testing visualizations for responsiveness and accommodating various audience needs, fostering an inclusive and engaging experience.

1. Business Intelligence and Reporting

In the realm of Business Intelligence and Reporting, organizations leverage sophisticated tools to enhance decision-making processes. This involves the implementation of comprehensive dashboards designed for tracking key performance indicators (KPIs) and essential business metrics. Additionally, businesses engage in thorough trend analysis to discern patterns and anomalies within sales, revenue, and other critical datasets. These visual insights play a pivotal role in facilitating strategic decision-making, empowering stakeholders to respond promptly to market dynamics.

2. Financial Analysis

Financial Analysis in the corporate landscape involves the utilization of visual representations to aid in investment decision-making. Visualizing stock prices and market trends provides valuable insights for investors. Furthermore, organizations conduct comparative analyses of budgeted versus actual expenditures, gaining a comprehensive understanding of financial performance. Visualizations of cash flow and financial statements contribute to a clearer assessment of overall financial health, aiding in the formulation of robust financial strategies.

3. Healthcare

Within the Healthcare sector, the adoption of visualizations is instrumental in conveying complex information. Visual representations are employed to communicate patient outcomes and assess treatment efficacy, fostering a more accessible understanding for healthcare professionals and stakeholders. Moreover, visual depictions of disease spread and epidemiological data are critical in supporting public health efforts. Through visual analytics, healthcare organizations achieve efficient allocation and utilization of resources, ensuring optimal delivery of healthcare services.

4. Marketing and Sales

In the domain of Marketing and Sales, data visualization becomes a powerful tool for understanding customer behavior. Segmentation and behavior analysis are facilitated through visually intuitive charts, providing insights that inform targeted marketing strategies. Conversion funnel visualizations offer a comprehensive view of the customer journey, enabling organizations to optimize their sales processes. Visual analytics of social media engagement and campaign performance further enhance marketing strategies, allowing for more effective and targeted outreach.

5. Human Resources

Human Resources departments leverage data visualization to streamline processes and enhance workforce management. The development of employee performance dashboards facilitates efficient HR operations. Workforce demographics and diversity metrics are visually represented, supporting inclusive practices within organizations. Additionally, analytics for recruitment and retention strategies are enhanced through visual insights, contributing to more effective talent management.

In the contemporary landscape of information management, the synergy between data visualization and big data has become increasingly crucial for organizations seeking actionable insights from vast and complex datasets. Data visualization, through graphical representation techniques such as charts, graphs, and heatmaps, plays a pivotal role in distilling intricate patterns and trends inherent in massive datasets.

• It acts as a transformative bridge between raw data and meaningful insights, enabling stakeholders to comprehend complex relationships and make informed decisions.
• In tandem, big data, characterized by the exponential growth and diversity of information, provides the substantive foundation for these visualizations.

As organizations grapple with the challenges and opportunities presented by the sheer volume, velocity, and variety of data, the integration of data visualization becomes an indispensable strategy for extracting value and fostering a deeper understanding of complex information. The marriage of data visualization and big data not only enhances interpretability but also empowers decision-makers to derive actionable intelligence from the vast reservoirs of information available in today’s data-driven landscape.

Data visualization serves as a cornerstone in the modern landscape of information interpretation. Its ability to transform complex data into comprehensible visual formats, such as charts and graphs, is instrumental in facilitating better decision-making processes across various sectors.

What are the 4 main visualization types?

Various forms of data visualization exist, including but not limited to bar charts, line charts, scatter plots, pie charts, and heat maps. These represent commonly used methods for presenting and interpreting data.

What is an example of data visualization?

A pie chart depicting the market share of different smartphone brands in a region, allowing a quick visual comparison of their respective contributions to the overall market.