Greetings from San Francisco. I am back here to attend Osisoft’s vCampus developer conference. The conference kicked off with a true highlight: Stephen Few delivered one of the keynote presentations. Hopefully, all of you know Stephen and the awesome work he has done over the past years. Today’s presentation was content-rich and also very entertaining. There were a lot of smiling faces in the audience. I will write up a short summary of his messages over the weekend and share it on this blog.
Is this the information age?
Stephen Few started his presentation with a strong statement: We do not live in the information age…..yet. Instead, many of us are drowning in data and we struggle with making sense of the data. Part of the issue is that we are lacking ‘data-sensemaking’ skills. To highlight this point, Stephen Few showed a video. I had never seen it before. It’s funny but there is a strong message behind it: we do not understand how to deliver information properly.
Those concentric circles
Does your organization have a ‘concentric circle’ problem? I certainly know a lot of them. It’s time to change that. Take some time to evaluate whether your reports and dashboards are able to deliver real information.
“Concentric circles” in the corporate world
Check back here in the next few days for a summary of Stephen Few’s presentation.
As a photographer I was really excited to see three traditional alphorn players. The early results looked good on the camera monitor (left photo). At that point I was tempted to pack up and celebrate with my friends. But I resisted and began to experiment with different viewpoints. The final shot ended up as my personal favorite (photograph on the right). Same scene, different perspective. Changing viewpoints paid off.
Business Analytics and Viewpoints
Changing our viewpoint is especially critical for Business Analytics. (more…)
Massive sets of data are collected and stored in many areas today. As the volumes of data available to business people or scientists increase, it becomes harder and harder to use the data effectively. Keeping up to date with the flood of data using standard tools for data management and analysis is far from easy. The field of visual analytics tries to provide people with better and more effective ways to understand and analyze these massive data sets, while helping them to follow up on their findings immediately, in real-time. Visual analytics integrates the analytic capabilities of the computer and the abilities of the human. This means, the human is empowered to take control of the analytical process; he or she is not just the final stage of a reporting process. Visual analytics sheds light on unexpected and hidden insights, which may lead to innovation and increase profits. For example, many key performance indicators are simply calculated using statistical models. But the true relations between data, models and business objectives often remain unclear. If visualization is included as an integral part of the analysis process then comprehension of the models as well as of the data is increased. Errors in the basic assumptions of the models can be recognized early on and newly discovered dependencies in the data can lead to new and possibly better reporting indices. (more…)
Have you heard of Many Eyes? Strange name, huh? Well, Many Eyes is a pretty cool and simple service on the web that let’s you visualize and explore data. Need a quick word cloud of Steve Job’s last speech? Sure. Just go to Many Eyes and create it. Need a quick scatter plot of your hear rate and running pace? Just go to Many Eyes and create it there.
The other day I took some time to review a few chapters of John Medina’s excellent book ‘Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School‘. It is a great read. There are a lot of interesting stories and insights that apply to various different aspects of our lives. One chapter in particular is quite relevant for Business Analytics: Rule #10 – Vision trumps all other senses.
THE POWER OF VISION
According to Medina, our brains devote over half of their resources to vision. The nerves between our eyes and our brains are much more powerful than those of our other senses. As a result, pictures allow us to absorb information much quicker and the information also tends to be stickier in our brains. Medina says:”Put simply, the more visual the input becomes, the more likely it is to be recognized – and recalled”.
THE PROBLEM WITH TEXT
Text on the other hand is very inefficient. It takes us longer to recognize information and we are likely to retain less of it. Medina states that each letter is technically a separate picture. When we see words we see tons of little images and our brains have a harder time to process the information. George Bernhard Shaw once said “Words are only postage stamps delivering the object for you to unwrap.”
THE LESSON FOR BUSINESS ANALYTICS
A picture says more than a thousand words
Most of this is common sense, but many of us still choose to ignore these facts. We create long reports with hundreds of columns and numbers. We spend hours analyzing these numbers. And we have a hard time recognizing the important patterns. If we want to follow Medina’s advice, we should visualize our data, instead. This not only speeds up our ability to recognize patterns and dependencies, but it should also help us with retaining the information. The old saying goes “A picture says more than a thousand words”, right?
AN EXPERIMENT
Dashboarding guru Stephen Few created a nice little experiment that shows how true and important this insight is. Take a look at the simple report below. It shows revenue numbers for two regions. Spend about 30 seconds to study the table. Then look away ask yourself what you saw.
What do you see here?
Most people are only able to recall three to four different things from the table. The bigger picture usually remains hidden for a while. Now, take a look at the chart below. This is the same data. What do you see now?
Same information…
Notice the difference? The chart is a lot easier to read and chances are that you are able to retain a lot more information.
THE SIMPLE LESSON
John Medina’s advice can be extremely valuable for all of us. We should strive to move away from pure number and text based reports. Instead we should visualize as much data as possible. But that requires us to spend some time to learn more about charting techniques. There are a lot of different options and not all of them are appropriate for any given set of data. You can find a bunch of valuable tips on this blog to get started. Also, utilize the appropriate Business Analytics platform. Cognos 10 offers over 160 differrent chart types, for example.
So, toss those tables and go visual. Inspect your current repository of reports and think about how you can improve in this area.
Listen to John Medina:
“Professionals everywhere need to know about the incredible inefficiency of text-based information and the incredible effect of images.”
Is history boring? Sometimes. But it really shouldn’t be. There is too much to learn and there is an abundance of stories that are too fascinating to be ignored. Making these stories visible in an engaging manner is a challenge. And it is easy to get it wrong. Just think back to school: chances are you probably had a history teacher that managed to bore you to tears (Bueller, Bueller, Bueller).
Well, two of my friends got it right. Think about how hard it is to properly visualize structured information in some cases. But Bernhard Lermann and Jens Semjan decided to go for a tougher challenge: Visualize history in the form of long timelines. Some of you might remember that I wrote about their fun and extremely cool exhibit called ‘The Eternal Timeline’. Given the success of the exhibit, Jens and Bernhard just posted a short video. Sit back and enjoy the eternal timeline show!
Do you like pies? I do! But not for analyzing data. Pie charts are just too busy and too hard to read in most situations. Yet they are the frequent tool of choice for visualizing the composition of a certain variable. Take a look at this example: I want to find out how total revenue is split between different product categories. The easy choice would be to create the following chart:
A product pie – created with IBM Many Eyes
Personally, I don’t like this! You constantly jump around the different pieces and it is really tough to obtain the overview that we are looking for. Pie charts work for few variables that account for larger pie slices. Another and better option is to use a bar chart. To make it easy for the viewer, I ranked the values in IBM Cognos 10:
Ranked bar chart – much better!
Isn’t this much better? You can quickly identify the best performing products. It is easy to read the individual contribution of each product. But I am not able to see my total revenue amount. Good news – there are different ways to perform this type of part-to-whole analysis
CHASING WATERFALLS
Waterfall charts (sometimes called Progressive Charts) allow us to visualize the composition of the a value along different segments. In plain English: Total revenue can be visualized as a build up of the different individual values of the products. Take a look at the example below. The values are once again ranked:
A classic waterfall chart: Total revenue across products
Notice how quickly you can see the segment revenue along with the total revenue of roughly 540 million. I personally like the clean and uncluttered look. Reading the individual values is a bit harder than in the traditional bar chart. But IBM Cognos 10 allows me to hover over each segment to obtain the actual value. It’s personal taste which chart is more effective. Here you can see both versions side-by-side.
Which chart is your favorite?
Waterfall charts are great for any kind of part-to-whole analysis: revenue/ margin across products, customers, channels. Composition of Profit across the P&L, etc.. There are a few interesting examples on Wikipedia.
THE PARETO CHART
There is yet another great option for displaying this type of data: Pareto Charts. They are are named after the Vilfredo Pareto who proposed the 80/20 principle. This chart simply enriches the bar chart we saw earlier with a cumulative percentage line. Take a look:
The Pareto chart: The cumulative percentage line adds further context
This graph allows us to quickly answer questions such as: Which products create 80% of my total revenue? (roughly everything up to Alpha Bronze). In other words: the pareto chart allows me to identify the most important items. IBM Cognos 10 allows different customization options which I would highly recommend looking at. Hiding one of the axis is not a bad idea, for example. The use of colors could be helpful here to identify the main product categories:
Colors allow the user to identify the main product categories
Waterfall Chart vs Pareto Graph?
Seems like a lot of options, right? Which one is the best? Can’t say. It really depends on the situation. I like all of them. There are slight differences and it depends on the user. Waterfall charts are probably better suited for executive dashboards. Pareto charts are more likely useful for analytical purposes. And the classic bar chart is always is a winner. Try to add these charts to your tool-box! And drop those pies.
A picture says more than a thousand words, right? Managers drown in pages of numeric reports. But as John Medina, author of the famous book ‘Brain Rules’ clearly pointed out: “Vision trumps all other senses“. In other words: we are much better at absorbing information through visuals than we are at reading numbers and letters.
To see how effective visuals can be at delivering complex information we just have to look at something that we are all surrounded by: Cartoons. They are in newspapers, they are on websites, they show up on twitter. Cartoons are drawings. A single picture that tells a humorous or critical story. Once you look at them carefully you will notice how deep and smart they can be: They tell a thoughtful joke or story in a single picture.
Talk about the power of visualization! Remember the scandal about the Danish cartoonist a few years ago? A single picture set a huge scandal in motion. To convey the same message, a writer would have to fill a lot of pages. And those pages wouldn’t be all that powerful.
To learn more about cartoons I ended up watching this short Ted presentation by Patrick Chappatte. It is quite entertaining and it highlights the power of visualization. We should all strive to learn something from this. Shouldn’t we all use more visuals in our daily lives? Should we toss those endless 2-dimensional reports and replace them with good, solid visuals that tell a clear story? You know my answer.
Things can be complex. Especially when we look at multi-dimensional data-sets. The objective of charts is to visualize data in the most effective and easy way. You shouldn’t need a PH.D. degree to decipher a complex chart. But it happens. There are a lot of complicated and useless charts out in dashboards. And it happens more often than we think. For example: Once we reach more than 2 dimensions, many people reach out for 3D charts. Let’s say we want to analyze market size, market share & margin. Many people are tempted to simply create a 3D bar-chart like the one below:
Chart 1 – Is this useful?
There are a lot of obvious problems with these type of charts: The dimension have different scales and it is therefore impossible to decipher. And let’s be honest – this looks super ugly. I could not, would not make a decision based on this chart. The other option is to break this out into multiple charts. But that requires a lot of space – and space is tight in a good dashboard. Analyzing numbers would also be more difficult in that setup as we have to shift our view from one chart to the next.
THE CASE FOR BUBBLE CHARTS
There is a better way to display this type of data. My boys loves this chart type: Bubble charts (all kids love bubbles!). Bubble charts allow us to visualize three different measures at the same time. And not only that: they are easy to read and they allow us to make critical associations between these measures. Let’s have a look at an example: This is a classic bubble chart that displays three different measures: Late shipments, damaged shipments and shipping cost for different carriers. The first two measures are obvious – they are represented by the x and y axis. The shipping costs, however, are visualized via the size of the bubble.
Chart 2 – A classic bubble chart
Notice how easy it is to read this chart (which vendor has the best performance?). Depending on the problem that I am trying to solve, I could simple look at the top right area to find the black sheep that are super later and also careless. Or, I could first focus on the size of business that we do with each carrier by picking out the large bubbles. Pretty simple. Also notice how this chart allows me to combine three measures with different types scales: percentages and absolute values. The traditional 3D bar chart was useless.
THERE IS MORE
In Cognos 10, we can also turn any bubble chart into a quadrant chart. This is useful if you want to categorize your data a little further by using a common layout like it is used in a SWOT or market attractiveness analysis. Take a look at the bubble chart that we created using the data from the first Excel 3D example:
Chart 3 – A quadrant bubble chart
This puts the data into further context and makes it really easy for managers to spot specific key points. For example, the attractive markets (high margin & high market share) are up in the right upper corner.
Cognos 10 also allows you to hover over each bubble and you will get the numeric details behind each bubble. This makes it really easy to explore the data.
Chart 4 – Use your mouse to explore
THE LIMITATIONS
As nice as the bubble charts are, they are certainly not perfect. Take a look at Chart 3 above and focus on the intersection of 11.5% Net Margin & 2% Market Share. There is a bigger bubble covering a smaller one. That can easily happen. A superficial glance over the chart can therefore be problematic because we would not notice this. Careful color choice could potentially help uncover these cases. This probably also highlights that bubble charts might not be an ideal solution for large data sets as there would be too many overlaps. But nothing is perfect, right?
A slider – easy to use
Also, keep in mind that bubble charts in their pure and simple form only provide a snap-shot in time. Time-series analysis has to be done in a different manner. But the good news is that Cognos 10 offers us sliders. We can use these sliders to walk through history and easily discover changes in the data.
LAST BUT NOT LEAST
One person who has really popularized the bubble charts is scientist Hans Rosling. He literally makes data fly. If you haven’t done so, make sure to watch one of his famous TED presentations.
Take a look at bubble charts! Consider them for your next project. They are easy to understand and they allow us to make critical associations. Chances are managers who have attended business school will certainly like them. A friend of mine always says that managers are like kids. And kids like bubbles, right?
One of the key features of the dashboard in any car is the fact that it is on a ‘single page’. Car dashboards are usually very simple and it doesn’t take us more than a few seconds to familiarize ourselves in a new vehicle. Could you imagine driving a car with a complicated dashboard? Could you imagine having to scroll through multiple pages to get a speed reading while you are driving down the German Autobahn with 200 km/h? The answer is no.
THE CONSTRAINTS
Good management dashboards should be concise as well. Executives especially don’t have the time and patience to scroll through multiple pages of information. But that often creates a problem: We have a lot of information to show but there is limited space. This problem arises especially when we want to show trends. A typical dashboard might want to show profits, margins, win/loss ratios, revenue, pipeline across multiple regions. One way to display this rich set of data in a table. But tables are ineffective in quickly displaying trends. And they take up a lot of space. The other option would be to show multiple line charts. But those take up a lot of space as well.
THE SPARKLINE
Information design guru Edward Tufte developed a solution for this problem. He created a new but very simple chart called a ‘Sparkline‘. He describes them as “data-intense, design-simple, word-sized graphics”. In other words: sparkline charts are very small, yet they display vital trend data. Take a regular time series such as revenue by months. Stick that into a sparkline chart. Below is an example:
Simple sparkline charts
ELEMENTS
When you look at the example above, you will notice how easy it is to spot the general trend: the Conservative Party is loosing ground. You have also noticed the little dots. IBM Cognos 10 allows you to color code the low, mid and high point. (red, black, green). The Green Party is gaining. You can hover your mouse over the line to get the actual value. This type of chart simply provides the ability to obtain a quick overview of the general trend and all that within a very tiny amount of space.
SPARKLINES AT WORK
Sparklines truly show their full potential when you supplement them with metrics or other charts. Take a look the next example:
Sparklines in action
The above object allows us to review margins across regions. The sparklines quickly display the trend. The trend is supplemented with more detailed information. Notice how concise and compact the total object is. And here is an example where we can see the sparklines integrated into a regular dashboard:
A sample IBM Cognos 10 dashboard
The upper part allows us to quickly provide an overview of critical metrics across different dimensions.
SPACE SAVERS
In a prior blog post I discussed the bullet chart. Those charts are also quite small and highly useful. When you combine the sparkline with the bullet chart you have a powerful combination. Notice how much information we are able to absorb (trend, actual value, current performance). A traditional line chart would take up a lot more space.
Sparkling Bullets
SPARKLINES – A FINAL WORD
Sparklines are great for displaying trends. This is ideal for supplementing current information (e.g. YTD Sales). They are tiny, they are easy to use and they are easy to understand. However, they will not replace a traditional line chart. Line charts are definitely a better choice when you want to perform a more detailed analysis. Next time you build a dashboard try to incorporate some sparkling charts.
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‘. It is a great read. There are a lot of interesting stories and insights that apply to various different aspects of our lives. One chapter in particular is quite relevant for Business Analytics: Rule #10 – Vision trumps all other senses.
