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Data visualization tools allow small businesses to make more informed decisions.
By data visualization tools, we are referring to software that can be used to produce graphs, charts, and infographics for data. Usually, this is done in software like Excel, Power BI, Tableau, or other tools. Data visualization may also be done inside a data source system, such as a browser app for accessing web data, customer data, inventory data, etc.
The point of exploring options for graphs, charts, and infographics is to help a business determine where they are performing well and where they are lagging behind. Some processes require just a high-level review of the data to communicate a sense of scale and trend. Other processes may require very fine-tuned information on how each and every customer or transaction proceeds. The goal is to find a visual representation of available data and information that is unusually effective at providing the required level of insight.
Many businesses develop data visualizations to help them make decisions on where they should focus their marketing and sales efforts in order to maximize the success of their company. Sometimes a simple yet reliable goal line or pie chart breakdown is enough to create significant confidence in how to assign priorities and resources. After a business has developed some reporting, it's important to review the reporting periodically with the objective of identifying and addressing problems in company operations. A common mistake in the analytics process is to focus too much on trying to understand a particular visual in , and not enough on what it means in the context of the business. Visuals, after all, are just a representation of raw data, which are themselves a reflection of how successful business operations have been.
Finally, once the business has used reporting to identify some solution, the reporting can be further enhanced to include simulation of the expected outcome. Many business reports can be improved by adding a simple linear regression line over a sales or performance chart and some information on how to interpret it. Other businesses may want to dedicate a dashboard to forecasting how annual sales might change if we assume specific growth rates for product categories or customer audiences. This solution review can sometimes be significant to business success. Sometimes, this review will lead to discovering that the proposed solution is not as effective as required, and the decision-makers can expand or change it before implementation.
All of the processes described so far are enhanced by choosing an effective data visualization tool that has enough support to implement effective reporting. The options for data visualization tools are many, but there is tremendous potential value for business owners to make more informed decisions.