Financial planning and analysis professionals increasingly use graphs to tell stories about numbers. A FP&A guide on data visualization delves deeper into how FP&A professionals can use it to ask smarter questions, build effective dashboards, and better inform colleagues. What we’ve learned from our research is that there are clear do’s and don’ts when using graphs and charts to frame financial information in effective ways:
- Always have a full understanding of the story that needs to be communicated.
- Tailor communication to audience—high-level focus versus more technical detail.
- Before starting the design of graphs and tables, think about the objective of the information to be presented, what information would be relevant, and how to best organize and visualize this information and via what media.
- Always think of the audience. Ask: What should the takeaway be for this particular audience?
- To keep graphs relevant, connect your presentation and try to relate it to what people would do in those situations.
- The right things are almost always about what customer problems you’re solving, why those are important problems to solve for your customers, how those problems impact your customers’ business, and how you solve those problems better than your competitors.
- Series data lends itself to visualizations since trending can easily be depicted. The same is true of geographical data—you can show geo-spatial tends through mapping. Some of the best discoveries are made by combining multiple disparate sources into a single visualization.
- Be sure your governed data can be trusted. This is where IT plays a big role in ensuring data is coming from sanctioned sources; otherwise you risk “garbage in and garbage out.”
- Less is more. Too much data introduces complexity and confusion. If it’s not relevant, don’t put in on the page or include in your message and anticipate questions in advance.
- Tie related information together. Without putting related data together you create a higher level of confusion and revisit the design of your reporting frequently.
- Don’t try to entertain the audience while losing sight of the message.
- A lot of data transparency can be lost when over-complicating data graphing,
- People should have their “a-ha” moment in 10 seconds rather than spending moments trying to figure out everything that’s on the axis.
- Remove unnecessary ink from graphs, including grid lines, borders and shading that can distract from the data.
- Never use a line chart if the data does not incorporate a time dimension for visualizing trends. Similarly don’t use pie charts if you are not comparing parts of a whole.
- Don’t let your visualization initiative become an IT project, or sit within an area that doesn’t understand the key business questions.
- Dashboards that don’t address the key questions are irrelevant and even misleading.
- Single charts can become a distraction. Sometimes when the pictures are pretty and complex, there’s a tendency to get sucked into the things that don’t really matter as much.
- Visualization can be used to manipulate the truth or hide the real insights to fit the presenters’ agenda. Data visualization allows for data framing, as the presenter picks and chooses what to share. This can lead to misleading analysis. For example, the range of an axis of a bar chart can skew the perception of parts of a whole.
- Make sure the graph is not about entertaining the audience but about communicating a story or supporting a decision. The graph needs to add value where it matters.
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