the business case for advanced data...

The Business Case for Advanced Data Visualization

©Visual Mining 2008

www.visualmining.com


© Visual Mining 2009 Page 1


“Advanced Data Visualization provides a context that enables human beings to

think more clearly and perform more efficiently.”

Introduction

AMR Research estimates that companies will spend approximately $3B worldwide on

performance dashboards and scorecards in 2008, which represents 23% of the business

intelligence software market.1 In light of such estimates, if your organization has not made

a commitment to adopting these capabilities, you may want to ask “what is your

competition doing to achieve an advantage that you are not?”

While there is a growing acceptance of these technologies in certain segments, there is also

a certain amount of “show me” skepticism among senior executives, IT professionals and

software product managers who have historically depended on reports from their legacy

systems to direct the business. The purpose of this whitepaper is to explore the

fundamental reasons why Advanced Data Visualization (ADV) and performance dashboard

technologies are so effective and how executives can use these capabilities to realize

immediate tangible results while optimizing capital and keeping the organization focused on

its core mission.

The Problem with Data

Every day, organizations and individual business users struggle with the need to increase

their agility and effectiveness in the face of a changing economy while being impaired by

static reporting technologies. Information can be characterized as the flow of energy that

enables the enterprise to operate in a cohesive, efficient and coordinated manner. It is a

fluid asset that is often transitory in nature and rarely in the ideal form and place when it is

needed.

The majority of business enterprises and government agencies operate using legacy

application software and static reporting frameworks. These frameworks require static data

architectures, processing guidelines and rigid reporting procedures that have built up over

decades. Executives who are charged with optimizing business performance, identifying

business drivers and correlations, and managing risk in a tough economy must deal with

hurdles such as:

Data Explosion - One of the most dynamic aspects of our age involves the amount of

information that is created every minute. This growth is experienced in two ways.

First, the total volume of information is growing at a faster rate than it can be used.

The latest projections from Varian & Lyman indicate that information is growing at an

approximate rate of 66x annually.2 Second, companies must monitor a much more

diverse array of information. Structured data represents only about 15% of the total

relevant information in and around the enterprise. The remaining 85% is



unstructured information, consisting of an ever-expanding array of voice data,

images, blogs, websites, email and other sources.3

Aging IT Infrastructure - Many organizations’ IT environments are ill-equipped to

deliver the composite view of relevant information that decision-makers need in a

useful context. Most business users are responsible for processes, groups of people,

products, markets or other spheres of influence, not applications or databases. As a

result, they need information from multiple data sources that can be summarized,

filtered and presented in a coherent and useful manner.

IT Lag in Making Changes - Legacy applications, BI products and other data sources

require significant changes when end users’ business needs change. These changes

often require weeks to effectuate with many unnecessary iterations, thus

handicapping the organization, wasting time and resources, and missing potential

opportunities as the process cycles through.

Regulatory Complexity - With every new economic crisis and political administration,

regulatory reporting requirements change. Computer systems fall farther behind and

workloads expand, thus making it increasingly difficult for IT to focus on the

operational priorities of the day.

The bottom line is that while information grows at exponential rates, technological

complexity increases and governments spare no expense in changing regulations; the

human being continues to be the most neglected participant in the enterprise value chain.

Reporting continues to be treated as the step-child of most software applications. It is now

time for a change. It is no longer acceptable to ignore the fact that information represents

what organizations value most and yet most software vendors fail to deliver. As Exhibit A

illustrates, those executives who fail to recognize this put their organizations and

shareholders at risk.

Exhibit A – “Moment of Truth”

A few years ago a major commercial real estate management corporation was reporting outstanding results to

the investment community. As a result, its shares were rapidly increasing in value and the firm was characterized

as one of Wall Street’s darlings.

Suddenly the company experienced an extremely high occurrence of bad debt write-offs in its commercial leasing

payments that were not considered in its estimates. A brief analysis revealed that these write-offs were traced to

underperforming tenants, yet the corporation’s sales teams were continuing to lease more space to these same

troubled tenants. Once the appropriate metrics were identified and validated using historical data that was

readily available, management’s first reaction was to engage a major consulting firm to undertake the

development of a complex and costly enterprise data warehouse project with an estimated delivery schedule of

one year.

Unfortunately, the investment community had little patience and punished the company with a severe drop in

share price, followed by an SEC investigation, a class action lawsuit and the eventual sale of the company, all of

which happened in a fraction of the time required by the data warehouse project.

In retrospect, while the data had existed in the corporation’s existing systems, the underlying leading indicators

were not sufficiently highlighted to focus management’s attention in a timely manner. Through the use of ADV,

powerful performance dashboards could have been deployed in mere weeks highlighting the financial challenges

of their tenants, the unproductive efforts of their sales teams, and trends in tenants’ lease payments. Given the

present state of the credit markets and the challenging retail environment, it is conceivable that history could

repeat itself for those who choose to ignore it.



Traditional data visualization efforts consisted of the depiction of values, activities,

relationships and other characteristics in a symbolic manner, usually graphs and charts,

pushed out to mass groups of users. This approach required individual decision-makers to

dig deeper and rely on alternate data sources to understand the overall context in order to

derive their own interpretation of the truth. Through advancements in data visualization

technology, powerful interactive graphical representations can be easily generated to deliver

more relevant information that optimizes the bandwidth, effectiveness and area of expertise

of the end user.

The Economic Value of Advanced Data Visualization

Too frequently, software vendors and end-users view data visualization and dashboard

capabilities as the “sizzle” that help sell the core software product. This over-simplification

misses the key point that ADV delivers the “steak” (i.e., the relevant information) that end-

users need to make accurate assessments that drive optimum business results. ADV

enhances the systematic processing of information that exists in the relationship between

external data, the reader, and other individuals within the enterprise community.

Performance dashboards based on ADV represent the future of the front-end user interface

and no commercial business application will be viewed as a serious product unless it

includes this capability.

To understand the economic value of ADV, it is important to first understand what it can do

for the end user. A growing body of empirical evidence provides an understanding of how

the human brain processes different types of information and why data visualization is

superior in many ways to the viewing of raw tabular reports. The majority of information

processing occurs in the interaction between external data and the eyes of the reader. ADV

leverages external graphical representations of information to enhance the internal cognitive

horsepower of the reader’s mind. This enables each of us to:

Perform more complex mental analysis using much larger amounts of data with

greater efficiency;

Detect perceptual relationships and trends with greater ease than through cognitive

inferencing;

Reduce demand on the reader’s working memory;

Engage the computer as a co-participant in the exploration, analysis and monitoring

processes; and

Adapt the area of focus and visualization quickly as requirements change.4

As a result, the computer-to-human interface is enhanced by increasing the bandwidth and

awareness of the users, which leads to improving overall enterprise efficiency by achieving

consensus faster, and thus attention is focused on key areas of the business that demand

immediate action.



ADV as the Hyper-Enabler of Processing Capacity

The human brain contains over 20 billion neurons dedicated to analyzing visual information,

thus representing a major element of the human cognitive engine.5 Through the use of

computer technology, ADV provides the ability to pre-process (i.e., filter, summarize,

calculate, rank, & package) huge amounts of information in graphical representations. This

enables users to perceive and interpret properties within data that were not evident by

simply reading the same information at the atomic level. In addition, ADV capabilities

expose anomalies in the data that may reveal unexpected problematic clues regarding the

collection, quality or manipulation of the data. As shown in Exhibit B, ADV can reveal

patterns, trends and relationships in the data that are difficult to see in tabular reports.

Exhibit B – “Seeing the Full Picture” ADV goes beyond traditional reporting and basic charting capabilities to deliver more intuitive and through the

use of more precise cognitive design techniques, embedded analytic algorithms and web-based reporting.

As shown below in Exhibit B-1, Chart 1 is a line chart for that illustrates customer service requests (CSRs)

processed over a six month period for a computer hard drive manufacturer. While we can clearly see

fluctuations in activity over time, it is difficult to quickly determine with any precision whether the Company as

a whole is doing a better job in its efforts to support its customers and where it needs to focus. By including a

linear regression algorithm shown in Chart 2, we can see that there is a clear and consistent trend in the

reduction of processed CSRs. Although interesting and slightly richer, this information raises further questions

about why overall support issues are declining (e.g., customer attrition, migration to newer products, better

manufacturing processes, etc.).

Exhibit B-1

Chart 1 Chart 2

By adding additional graphical representations shown in Exhibit B-2 (below), we can get an even clearer picture

of how the Company is doing. Chart 3 displays a Pareto Chart and reveals that the majority of CSRs were

related to the HD-1000 and HD-500 models. The Heat Map shown in Chart 4 not only provides a further

breakdown of the type of problems reported for each product., Embedded alerts also reveal when CSRs exceed

a particular threshold, prompting management to take action. We can see that the biggest causes of CSRs in

HD-1000 and HD-500 models were due to product quality and installation problems.



Performance Dashboards are one major example of the power of ADV. Dashboards excel in

providing a Useful Field of View (UFOV) that focuses the reader on a specific set of related

graphically represented key performance indicators. The UFOV directs the reader’s attention

to the amount of information that can be usefully absorbed and processed in a given

encounter, thus artificially optimizing the reader’s cognitive bandwidth by focusing on a

limited amount of related information. ADV capabilities and graphical design techniques

such as those described by Stephen Few’s book, Information Dashboard Design, further

allow the dashboard developer to design graphics that pop-out “at a glance” to capture the

Exhibit B-2

Chart 3 Chart 5

Chart 4 Chart 6

Chart 5 represents another view of a line graph that highlights the trend in CSRs over the six month period,

this time broken down by product. From this we can see that HD-1000 is trending up while the other models

are trending downward. This could be due the fact that HD-1000, representing an upgrade of older technology,

still has challenges in the area of reliability and ease of installation while the No-Touch models are much more

trouble free for customers who purchase these products.

Finally, the bullet charts shown in Chart 6 show the results of the customer exit surveys which each Customer

Service Representative performs at the end of each encounter. We can see that while customers are very

happy with the quality of technical expertise, there is still room for improvement in wait time and service

quality. Such occurrences could direct attention to areas where issues remain while product management team

works to improve the quality and installation process of the HD-1000.

Through the use of the more powerful processing capabilities of ADV and improved dashboard design

techniques, more processing occurs within the computer, before it reaches the users eyes, thus making easier

for the user to see and analyze the information before them.



reader’s attention faster than they can consciously determine.6 This is called pre-attentive

processing and typically occurs when the brain processes information at a rate faster than

10 msec per item.7

This capability enables developers and users to take advantage of ADV capabilities within

real-world applications such as:

Improving individual effectiveness and productivity via increased cognitive capacity;

Getting everyone on same page through better communication and collaboration;

Managing risk and exploiting opportunities by identifying shifting trends and

anomalies;

Improving operational efficiency by enabling IT to focus on data governance while

empowering the user community to be more proactive in the business areas where

they are most knowledgeable; and

Exploiting IT efficiencies and cost savings by providing a standardized front-end

across all mission-critical applications and data sources.

Automated tabular reports have been delivered the same way for almost forty years, yet

ADV has managed to transform the software industry and management practices in the last

decade to a far greater extent. IDC estimates that capabilities such as advanced data

visualization, embedded analytics and performance dashboards will have an increasingly

strong presence for the next several years.8 The delivery of dynamic business information

will continue to evolve even faster based on the use of ADV techniques that allow

information to be restructured and presented in a more cognitively intuitive manner for

pragmatic use. The organizations that combine these technologies with best practices and

sound design principles will be in the best position to maximize its benefits.

ADV Optimization Best Practices

ADV is about more than simply rendering data in the form of slick-looking charts & graphics.

It is about enhancing the computer-to-human interface in a way that makes it easier for

decision-makers to get the information they need in order to exercise better judgment. To

take advantage of ADV capabilities it is important that any strategies and technology

components consider the following principles:

1. Agility – Easily deployed and adaptable to changing business requirements and

technology environments;

2. Interactive – Allow users to explore the information regarding their business

environment and evaluate strategies to better understand the dynamics of a variety

of business scenarios;

3. Collaborative – Allow participants inside and outside the organization to work

together to explore, understand and act on information;

4. Personalizable – Enable firms to treat each information consumer as unique and

establish a connection to serve that person's unique needs;

5. Re-usable – Emphasize the reuse of information and re-configuration of dashboard

solutions to meet the needs of multiple situations and user constituencies; and



6. Cohesive Relevance - Create effective performance dashboards that provide real

answers to specific problems within a particular business domain and align

performance metrics at the business unit level with enterprise strategy.

Through the use of these principles and an extensive array of visualization capabilities,

businesses can implement agile performance dashboards at all levels of the enterprise in a

fraction of the time and at a fraction of the cost, in a way that improves their return on

human capital and optimizes the overall performance of the enterprise. The case study in

Exhibit C describes how ADV-powered performance dashboards can be further used to

enhance the quality of information and drive strategic value to the enterprise and its

customers.

Exhibit C – “History Revisited with ADV”

Let’s go back to the Company in Exhibit A and fast forward to a much more challenging economy where

retail markets are facing the challenge of reduced consumer purchasing and tighter credit markets. By using

the power of ADV, the real estate management firm is not only able to monitor the financial health of its

tenants, it is able to identify trends in consumer behavior and commercial lending practices as tracked by

third parties. Because Finance and IT have extended the deployment of ADV-powered performance

dashboards into its sales, marketing, account management and risk management departments, there is a

higher level of collaboration between the various areas of the organization.

Account management learns that one of its major tenants is having difficulty obtaining financing for its

inventory and increased staffing in the upcoming holiday season. Traditionally, the success of the holiday

season has determined whether the retail stores will be in the black or the red for the year. According to the

tenant’s management, the store anticipates that it will need to close several of stores immediately after the

holidays if they do not have a successful season.

Using ADV capabilities such as scatterplots to measure the correlation of traffic between the anchor store

and other stores, the retail management company determines that the closure of an anchor store will have a

cascading effect of a loss of consumer traffic and spending at its other tenants’ stores. And while the other

tenants are anticipating similar pressures of decreased consumer spending and financing, the loss of

consumer traffic would be devastating to their operations. As a result of this analysis, management is faced

with a strategic question, do they brace for the ultimate loss of many tenants or should they pursue options

support the anchor store and increase consumer traffic to all stores in their properties.

As a result of this information, both the finance and sales teams work collaboratively with the anchor store’s

parent corporation to develop a creative strategy involving temporary adjustments to leasing payments

combined with an effort to increase pressure on the anchor store’s banks for financing. As a result, they are

able to keep the anchor store space occupied and avoid the potential closure of other tenants, thus

maintaining a positive overall cash flow and avoiding a looming financial catastrophe.



Visual Mining ADV Differentiators

The key to delivering on the promise of ADV is a combination of solid technology,

experience gained from thousands of projects serving millions of end users, proven best

practices, and a compelling vision that business users should not be constrained by the

limitations of traditional reporting tools. The best practices learned from a broad range of

industries and core principles from variety of scientific disciplines led to the development of

Visual Mining’s industry-leading architecture.

Visual Mining takes ADV optimization best practices to the next level in the NetCharts family

of products and provides businesses with comprehensive, intuitive, and effective ADV

solutions for both developers and business users. NetCharts for Developers products are a

comprehensive set of tools that enable developers to quickly build dynamic, interactive

advanced data visualizations that integrate with multiple applications and data sources.

NetCharts Performance Dashboards (NCPD) products for Business Users are dynamic,

interactive dashboard solutions that enable business users to analyze data, gain insight, and

make better business decisions. Together these products offer an extensive selection from

which organizations of any size and complexity can choose to instantly transform data into

actionable business information.

Based on the results of over ten years of research and input from thousands of users, Visual

Mining recognizes that the information needs of top performing companies are complex and

dynamic. The key to meeting these needs lies in a synergy of four interrelated components

that comprise the NetCharts Visualization Architecture (NVA) shown in Exhibit D.

Exhibit D - Visual Mining’s NetCharts Visualization Architecture

Rendering Engines - Generate graphical content, reports and performance dashboards

using a wide variety of configurable options that enable organizations to produce thousands



of graphics and charts tailored to their personal needs. Separate rendering engines exist for

generating charts, tables and complete pages. Visual Mining’s award-winning chart

rendering engines are capable of producing 1000s of variations on 17 standard business

chart types. As a result, developers and business users have a tremendous array of

flexibility and options they can rely on to meet their needs both now and in the future.

Content Template Languages - Provide simple, reusable mechanisms for storing

definitions of the data connections, charts, tables and pages used to construct NetCharts-

based applications, reports, and dashboards. In the NVA, details about data presentation

are separated from the data and data analysis. This allows users to easily create and

manage different visualization styles for their data. Applications can be branded with

multiple looks to promote personalization, end user adoption and other management

initiatives.

Data Access and Analysis Engine - Supports integration with all relational databases,

XML files, CSV files, and most legacy applications. Over 50 separate data analysis functions

are available including Six Sigma and statistical process control analysis. As a result,

business users are no longer impaired by the limitations of disparate data sources, multiple

BI products and constant changes that occur in the enterprise IT architecture. Developers

are able to respond to management’s ongoing need to quickly access information from the

most appropriate sources and apply powerful analytic capabilities to generate business

insights that do not exist in data at the atomic level.

Interactive User Interface - Promotes end-user personalization with dynamic user

interfaces that top the NVA architecture and maximize the effectiveness of NetCharts based

applications, reports, and dashboards. Any element of a chart can serve as a launch point

for a context-sensitive drill, allowing users to easily pinpoint date of interest. AJAX

technology is used to optimize updates to individual components of complex dashboards

and reports. Rich client-side GUI’s present users with control over the content and

presentation of their dashboards and reports.



Conclusion

ADV represents the future face of application software. It provides a much more intuitive

and effective mechanism for accessing, analyzing and capitalizing on information. ADV

works because the human brain is wired to access, interpret and respond to visualization

faster than the speed of consciousness and it acts as a facilitator to improve the

effectiveness of the interaction between the computer and the end user. Finally, ADV

delivers pre-processed information in a relevant context that relates to each business users’

role in the organization while promoting a single version of the truth and a spirit of

collaboration.

However, that is not enough. Developers and users are demanding tools capable of

producing agile performance dashboards that exceed management expectations and deliver

tangible business results. Organizations that are prepared to compete based on analytics

will rely on ADV to improve the effectiveness of both the individuals and the organization to

deliver tangible business results to the enterprise, customers and employees.

Visual Mining NetCharts product solutions for developers and business users meet and

exceed those ADV best practices which will drive the success of businesses into the future.

Built upon an architecture which enables comprehensive, intuitive, and effective

visualization solutions, NetCharts products deliver powerful ADV solutions for obtaining the

best business results.

For more information, go to www.visualmining.com. Visualize. Analyze. Capitalize.

http://www.visualmining.com/



Footnotes:

1. AMR Research, The Business Intelligence and Performance Management Spending

Report 2008-2009: Inside the $57.1B Market (2008).

2. Varian, H. and Lyman, P., How Much Information?, (2004).

3. White, C., Consolidating, Accessing and Analyzing Unstructured Data,

www.BeyeNETWORK.com, (2005).

4. Ware, C., Information Visualization: Perception for Design (2nd Ed.), (2004).

5. Ibid.

6. Few, S., Information Dashboard Design: The Effective Communication of Data,

(2006)

7. Treisman, A. and Gormican, S., Feature Analysis in Early Vision: Evidence for Search

Assymetries. Psychological Review 95(1), (1988).

8. IDC, Worldwide Business Intelligence Tools 2006 Report (2007).

About Visual Mining

Visual Mining provides visualization solutions that instantly transform data into actionable

business information. Visual Mining’s NetCharts products deliver comprehensive solutions

for both developers and end users that are intuitive and effective. NetCharts for Developers

enables the rapid development and deployment of advanced data visualizations that easily

integrate with applications and data sources. NetCharts for Business Users provides

dynamic, interactive dashboard solutions that enable users to analyze data, gain insight,

and make better business decisions. Visual Mining’s support and professional services teams

compliment its products by providing the expertise to ensure success. Visual Mining:

Visualize. Analyze. Capitalize. www.visualmining.com

http://www.visualmining.com/

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