In a report on the future of digital finance, the experts at McKinsey identified several key technologies. It’s no surprise that analytics and automation made the list, but readers may not expect to see data visualizations included among today’s most exciting and important innovations.
Charts and graphs are nothing new, but they’re now available in 21st-century formats that make the insights inside massive financial data sets explicit for all to see. From the CFO’s perspective, data visualizations help tell the story of finance in a way that’s more engaging and actionable than a grid of hard numbers. In that way, they’re a crucial component of financial intelligence.
With finance becoming ever more important, CFOs need data visualizations in their toolkit. As with any tool, it’s only as good as the user. Get the most out of the visualizations at your disposal with this quick guide from the insightsoftware team.
Use the Best Data Available
This is trickier than it seems. With a wealth of financial and operational data now available, there’s a greater risk that it’s inaccurate, incomplete, or outdated, leading to visualizations with the same flaws. Manually validating data quality isn’t realistic, which is why it helps to rely on visualization tools that automatically integrate and update more of the data involved.
Choose the Right Visualization
The right visualization brings the data to life, but the wrong one confuses your point. Rather than choosing based on visual appeal, select a chart that presents the information as succinctly as possible. Less is more, both in terms of the amount of data you reflect in a single visualization and in the total number of charts/graphs you include in one report.
Think Like a Designer
Two of the same charts with the same data can look completely different based on design choices: color, font, line weight, axes, etc. In all visualizations, use clean designs that incorporate high-contrast colors, present the most important information in the top left, and show consistency throughout (e.g. red always designates negative). Put yourself in the viewer’s shoes, and don’t hesitate to get outside feedback to make the visualizations as digestible as possible.
Select a Format
Will you present the visualizations in print or digital format, and will that include mobile? Will you be on hand to explain the information? Even more important to ask, will these visualizations be static or dynamic? Leading visualization tools make it easy to create dashboards that track key performance indicators in real time, automatically updating the visualizations to reflect the latest information. Imagine what the end user needs when deciding what formats to use.
Remember the Objective
Data visualizations are just one of several components of financial data storytelling. The point of telling that story is to enhance financial intelligence as broadly as possible. CFOs can’t lose sight of that objective; otherwise, they risk picking visualizations that look great but say little of value. Focus on making reports as rich, revealing, and relevant as possible, using visualizations only when it serves that objective.
The McKinsey report mentioned earlier is tellingly called “Memo to the CFO: Get in Front of Digital Finance – or Get Left Back.” The clock is ticking for CFOs to learn the language of visualizations and finally transform data into a meaningful asset. As an innovator in financial reporting software and a pioneer in visual data modeling, insightsoftware is here to help. Download our whitepaper: How to Drive Your Dashboards Like a Boss to learn more.