Posted by Peder Enhorning

November 29, 2013

10:20 am

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Don’t Visualize What You Can’t See!

“Just find me something interesting about our data” is a request we often get. At which time, a smart data analyst should cringe. Collected data needs to be mined and evaluated before it will offer any value. And questions need to be properly framed to extract the right answers.

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Data is being collected in multiple formats and more comprehensively than ever before. Information is gathered on customer interactions, corporate logistics, company performance, and internal and external communications. For some, “making sense of it all” and knowing how to extract value from multitudes of data can be intimidating. But Big Data should not be feared; it should be celebrated! Although there may be an overwhelming amount of information that can be difficult to analyze, if everything has been accurately collected, the answers are there to be found. Data offers the opportunity for enormous insight provided you know what to look for and how to present it.

Visualizing data using dashboards can assist in two ways. Firstly, they can improve the appearance of reports. Secondly, and much more importantly, they can and SHOULD provide new insights. Don’t fall into the trap of creating dashboards that just mimic existing pdf or PowerPoint reports! Dashboards should inform and present data in new ways that answer challenging questions.

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To visualize data, you first need to “see” what you are looking for. What questions is the dashboard meant to answer? That means establishing KPIs (Key Performance Indicators) that are driven by goals and objectives. KPI’s are the handful of metrics that reflect the performance of your business, or more accurately, the drivers that influence the business.

Dashboards need to be constructed to show KPIs since KPIs deliver answers to strategic questions such as: What are the valuable actions or behaviors I’m trying to get my customers to do? How often does each individual customer perform this action? What tactics do we use as a business to encourage our customers to perform these actions?

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Most reports contain only measures, not KPIs. KPIs are derived by doing one of four calculations on those measures to determine Ratios, Averages, Percentages and Rates, and all are viewed over time. For example, we don’t simply look at the sales figure for a certain region; we look at the Percentage lift compared to the previous month. Or it might be the Ratio of new customers to existing ones month over month. Therefore, KPIs will give instant feedback on how well your business tactics are performing, and further analysis should not be required.
Many dashboards are awful because they display only data – they don’t inform! Dashboards should not have to be analyzed. Start creating dashboards that are based on KPIs; your users will have aha moments, and they’ll stop asking irreverent questions!

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