CFOs have long been encouraged to become better “storytellers” — by communicating important messages about company performance, strategy, and prospects not in the often technical language of finance, but in terms everyone in the organization can understand.
At the same time, finance departments are working ever harder to become true partners to the business, by providing metrics, KPIs, forecasts, and other critical information that can aid decision-making and help each function chart effective courses of action.
The sheer volume of data can be overwhelming, making analysis complex and often complicating efforts to tell a coherent story. That’s especially true when the audience is someone who needs only a few critical pieces of information
Both of those goals depend heavily on quality data, and there is no doubt that organizations today have access to more of it than ever before, both structured and unstructured, from internal and external sources. And, thanks to an expanding array of analytics tools and emerging cognitive technologies, finance is also able to leverage that data to attain new insights that can influence a range of tactical and strategic decisions.
But the sheer volume of data can be overwhelming, making analysis complex and often complicating efforts to tell a coherent story. That’s especially true when the audience is not a savvy finance team member, but someone from another part of the organization who needs only a few critical pieces of information in order to evaluate current performance or make a decision.
Enter data visualization, an enabling technology that complements analytics and related data-crunching tools, allowing finance to produce user-friendly reports and other presentations that can be tailored to specific audiences.
CFOs seem to already appreciate the potential of data visualization, ranking it fairly high on their digital wish list and acknowledging its value as part of a broader effort to leverage analytics. They may not realize precisely how valuable it can be, however, and in this issue of CFO Insights, we’ll explore the multiple uses of data visualization and how finance can better leverage its possibilities.
The case for clarity
Anyone who has ever looked at a bar chart or glanced at a car’s fuel gauge already gets data visualization. In fact, that’s one of its prime selling points: it requires virtually no training, at least for end users.
If a visualization has to be explained, odds are it’s been poorly designed or insufficiently thought out.
For their part, CFOs could be forgiven for believing that the finance department already makes use of data visualization, given the number of charts in many organizational reports. But today the technology is being rolled out in new and more profound ways, helping to make more data more useful to more people.
Static field sales reports, for example, can now be sent as interactive dashboards designed for touch-screen use on mobile devices, giving salespeople a way to do on-the-fly analysis, perhaps allowing them to spot areas ripe for additional marketing support, or a customer whose increasing volumes may merit a discount.
At a more basic level, consider the value in creating charts that display data in a way the organization may not have thought of previously. One company, for example, developed a chart that displays growth in various product lines on the Y axis and margins on the X axis, allowing it to spot cases of low-margin products experiencing solid growth that it had been tempted to invest little in.
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