Business Analytics, Global Edition - (PG 114 - 136)

CHAPTER
3
Data Visualization
Copyright © 2020. Pearson Education, Limited. All rights reserved.
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LEARNING OBJECTIVES After studying this chapter, you will be able to:
■■ Create Microsoft Excel charts. ■■ Apply data bars, color scales, icon sets, and
■■ Determine the appropriate chart to visualize different sparklines to create other types of visualizations.
types of data. ■■ Develop useful dashboards for communicating data
and information.
Evans, James. Business Analytics, Global Edition, Pearson Education, Limited, 2020. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/city/detail.action?docID=6130628.
Created from city on 2023-03-01 19:22:31.
114 Chapter 3 Data Visualization
Making sense of large quantities of disparate data is necessary not only for gaining
competitive advantage in today’s business environment, but also for surviving in
it. Converting data into information to understand past and current performance
is the core of descriptive analytics and is vital to making good business deci-
sions. The old adage “A picture is worth 1,000 words” is probably truer in today’s
information–rich environment than ever before. Data visualization is the process
of displaying data (often in large quantities) in a meaningful fashion to provide
insights that will support better decisions. Researchers have observed that data
visualization improves decision making, provides managers with better analysis
capabilities that reduce reliance on IT professionals, and improves collaboration
and information sharing. In your career, you will most likely use data visualization
extensively as an analysis tool and to communicate data and information to oth-
ers. For example, if you work in finance, you can use data visualization to track
revenues, costs, and profits over time; to compare performance between years
or among different departments; and to track budget performance. In marketing,
you can use data visualization to show trends in customer satisfaction, compare
sales among different regions, and show the impact of advertising strategies. In
operations, you might illustrate the performance of different facilities, product
quality, call volumes in a technical support department, or supply chain metrics
such as late deliveries.
In this chapter, we will illustrate how to construct and use Excel charts and
other Excel visualization tools and how to build dashboards that summarize and
communicate key information visually.
The Value of Data Visualization

Raw data are important, particularly when one needs to identify accurate values or com-
pare individual numbers. However, it is quite difficult to identify trends and patterns, find
exceptions, or compare groups of data in tabular form. The human brain does a surpris-
ingly good job of processing visual information—if presented in an effective way. Visual-
izing data provides a way of communicating data at all levels of a business and can reveal
surprising patterns and relationships, thereby providing important insights for making
decisions. It also helps users to more quickly understand and interpret data, and helps
analysts choose the most appropriate data analysis tool. For many unique and intriguing
examples of data visualization, visit the Data Visualization Gallery at the U.S. Census
Bureau Web site, www.census.gov/dataviz/.
In addition to descriptive analytics, data visualization is important for predictive and
prescriptive analytics as well. For example, recall the chart predicting new product sales
over time, shown in Figure 1.2 in Chapter 1. This graph conveys the concept much more
Chapter 3 Data Visualization 115
easily than would either a verbal description or mathematical model. Visualizing a pat-
tern also helps analysts select the most appropriate mathematical function to model the
phenomenon. Complex prescriptive models often yield complex results. Visualizing the
results often helps in understanding and gaining insight about model output and solutions.
EXAMPL E 3.1 Tabular Versus Visual Data Analysis

Figure 3.1 shows the data in the Excel file Monthly Product conclusions. Figure 3.2 displays a chart of monthly sales
Sales. We can use the data to determine exactly how many for each product. We can easily compare overall sales of
units of a certain product were sold in a particular month, or different products (product C sells the least, for example)
to compare one month to another. For example, we see that and identify trends (sales of product D are increasing), other
sales of product A dropped in February, specifically by 6.7% patterns (sales of product C are relatively stable, while sales
(computed by the Excel formula = 1 - B3/B2). Beyond of product B fluctuate more over time), and exceptions
such calculations, however, it is difficult to draw big–picture (product E’s sales fell considerably are September).
▶▶ Figure 3.1
Monthly Product Sales Data
▶▶ Figure 3.2
Visualization of Monthly
Product Sales Data
ANALYTICS IN PRACTICE: Data Visualization for the New York City

Police Department’s Domain Awareness
System1
The New York City Police Department (NYPD), the largest A key feature of the system is data visualization. Prior to
state or local police force in the United States, is charged the DAS, reports simply listed data in numerical tables. The
with securing New York City from crime and terrorism. The only analysis presented might be a year-to-year percentage
department had accumulated a tremendous amount of change. Using it to pick out geographic clusters or potential
information but had limited means of sharing it among its patterns was virtually impossible. Today, information is pre-
officers. Much of the information was available only to offi- sented in an interactive form. If a user clicks on a number, DAS
cers in the precinct house with permission to access stand- brings up all the records included in that number and marks
alone software applications, with little analytics or data them on the map. The NYPD also constructed a data visualiza-
visualization techniques to give the officers any insight. tion engine to enable the user to explore trends and patterns
In 2008, the NYPD began developing a new system, in the statistics. Bar and pie charts of categorical data and line
the Domain Awareness System (DAS), which is a citywide charts of temporal data are available with the press of a button.
network of sensors, databases, devices, software, and Through improving the efficiency of the NYPD’s staff,
infrastructure that informs decision making by delivering DAS has generated estimated savings of $50 million per year.
analytics and tailored information to officers’ smartphones Most importantly, the NYPD has used it to combat terrorism
and precinct desktops. The NYPD has used the system to and improve its crime-fighting effectiveness. Since DAS was
employ a unique combination of analytics and information deployed department-wide in 2013, the overall crime index in
technology. the city has fallen by six percent.
Tools and Software for Data Visualization

Data visualization ranges from simple Excel charts to more advanced interactive tools and
software that allow users to easily view and manipulate data with a few clicks, not only on
computers, but also on iPads and other devices. In this chapter, we discuss basic tools avail-
able in Excel. Commercial software packages such as Tableau, QlikView, and SAS Visual
Analytics offer more powerful tools, especially for applications involving big data. In par-
ticular, we suggest that you look at the capabilities of Tableau (www.tableau.com), which
we describe in the Appendix to this chapter. Tableau is easy to use and offers a free trial.
CHECK YOUR UNDERSTANDING
1. Explain the pros and cons of tabular versus visual data analysis.
2. How is data visualization used in descriptive, predictive, and prescriptive analytics?
Creating Charts in Microsoft Excel

Microsoft Excel provides a comprehensive charting capability with many features. With a
little experimentation, you can create professional charts for business analyses and presen-
tations. These include vertical and horizontal bar charts, line charts, pie charts, area charts,
1
E. S. Levine, Jessica Tisch, Anthony Tasso, and Michael Joya, “The New York City Police Department’s
Domain Awareness System,” Interfaces, Vol. 47, No. 1, January–February 2017, pp. 70–84, © 2017
INFORMS.
scatter plots, and many other special types of charts. We will not guide you through every
application but do provide some guidance for new procedures as appropriate.
Certain charts work better for certain types of data, and using the wrong chart can make
the data difficult for the user to interpret and understand. While Excel offers many ways
to make charts unique and fancy, naive users often focus more on the attention-grabbing
aspects of charts rather than their effectiveness in displaying information. So we recom-
mend that you keep charts simple, and avoid such bells and whistles as 3-D bars, cylinders,
cones, and so on. We highly recommend books written by Stephen Few, such as Show Me
the Numbers (Oakland, CA: Analytics Press, 2004), for additional guidance in developing
effective data visualizations.
To create a chart in Excel, it is best to first highlight the range of the data you wish to
chart. The Excel Help files provide guidance on formatting your data for a particular type
of chart. Click the Insert tab in the Excel ribbon (Figure 3.3; the Mac ribbon is similar).
Click the chart type, and then click a chart subtype that you want to use. Once a basic chart
is created, you may use the options in the Design (Chart Design in Mac) and Format tabs
to customize your chart (Figure 3.4). In the Design tab, you can change the type of chart,
data included in the chart, chart layout, and styles. The Format tab provides various for-
matting options. You may also customize charts easily by right clicking on elements of the
chart or by using the Quick Layout options within the Design tab.
You should realize that up to 10% of the male population are affected by color blind-
ness, making it difficult to distinguish between different color variations. Although we
generally display charts using Excel’s default colors, which often, unfortunately, use red,
experts suggest using blue-orange palettes. We suggest that you be aware of this for profes-
sional and commercial applications.
Column and Bar Charts

Excel distinguishes between vertical and horizontal bar charts, calling the former column
charts and the latter bar charts. A clustered column chart compares values across cat-
egories using vertical rectangles; a stacked column chart displays the contribution of each
value to the total by stacking the rectangles; and a 100% stacked column chart compares
the percentage that each value contributes to a total. Column and bar charts are useful for
comparing categorical or ordinal data, for illustrating differences between sets of values,
and for showing proportions or percentages of a whole.
▲▲ Figure 3.3
Excel Insert Ribbon for Windows
▲▲ Figure 3.4
Excel Chart Design Ribbon for Windows
EXAMPLE 3.2 Creating Column Charts

The Excel file EEO Employment Report provides data on the and change it to “Alabama Employment.” The names of the
number of employees in different categories broken down data series can be changed by clicking on the Select Data
by racial/ethnic group and gender (Figure 3.5). We will con- button in the Data group of the Design tab. In the Select Data
struct a simple column chart for the various employment cat- Source dialog (see Figure 3.6), click on “Series1” and then
egories for all employees. First, highlight the range C3:K6, the Edit button. Enter the name of the data series, in this
which includes the headings and data for each category. case “All Employees.” Change the names of the other data
Click on the Column Chart button found in the Insert tab, series to “Men” and “Women” in a similar fashion. You can
and then on the first chart type in the list (a clustered column also change the order in which the data series are displayed
chart). To add a title, click on the Add Chart Elements button on the chart using the up and down buttons. The final chart
in the Design tab ribbon. Click on “Chart Title” in the chart is shown in Figure 3.7.
Be cautious when changing the scale of the numerical axis. The heights or lengths of
the bars only accurately reflect the data values if the axis starts at zero. If not, the relative
sizes can paint a misleading picture of the true relative values of the data.
Data Label and Data Table Chart Options

Excel provides options for including the numerical data on which charts are based within
the charts. Data labels can be added to chart elements to show the actual value of bars,
▲▲ Figure 3.5
Portion of EEO Employment Report Data
▶▶ Figure 3.6
Select Data Source Dialog
▶▶ Figure 3.7
Column Chart for Alabama
Employment Data
for example. Data tables can also be added; these are usually better than data labels,
which can get quite messy. Both can be added from the Add Chart Element button in
the Chart Tools Design tab, or from the Quick Layout button, which provides standard
design options. Figure 3.8 shows a data table added to the Alabama Employment chart.
You can see that the data table provides useful additional information to improve the
visualization.
Line Charts
Line charts provide a useful means for displaying data over time, as Example 3.3 illus-
trates. You may plot multiple data series in line charts; however, they can be difficult to
interpret if the magnitude of the data values differs greatly. In that case, it would be advis-
able to create separate charts for each data series.
▲▲ Figure 3.8
Alternate Column Chart Format with a Data Table
EXAMPLE 3.3 A Line Chart for China Export Data

Figure 3.9 shows a line chart giving the amount of U.S. in exports starting in the year 2000, which began to level off
exports to China in billions of dollars from the Excel file around 2008 and then show a sharp increase in subsequent
China Trade Data. The chart clearly shows a significant rise years.
Pie Charts
For many types of data, we are interested in understanding the relative proportion of each
data source to the total. A pie chart displays this by partitioning a circle into pie-shaped
areas showing the relative proportions. Example 3.4 provides one application.
EXAMPLE 3.4 A Pie Chart for Census Data

Consider the marital status of individuals in the U.S. popu- Figure 3.11. This chart uses a layout option that shows the
lation in the Excel file Census Education Data, a portion of labels associated with the data as well as the actual pro-
which is shown in Figure 3.10. To show the relative propor- portions as percentages. A different layout that shows the
tion in each category, we can use a pie chart, as shown in values and/or proportions can also be chosen.
▶▶ Figure 3.9
Line Chart for China Trade
Data
▶▶ Figure 3.10
Portion of Census Education
Data
▶▶ Figure 3.11
Pie Chart for Marital Status:
Not a High School Grad
Data visualization professionals don’t recommend using pie charts. For example, con-
trast the pie chart in Figure 3.11 with the column chart in Figure 3.12 for the same data. In
the pie chart, it is difficult to compare the relative sizes of areas; however, the bars in the
column chart can easily be compared to determine relative ratios of the data. If you do use
pie charts, restrict them to small numbers of categories, always ensure that the numbers add
to 100%, and use labels to display the group names and actual percentages. Avoid three-
dimensional (3-D) pie charts—especially those that are rotated—and keep them simple.
Area Charts
An area chart combines the features of a pie chart with those of line charts. Area charts
present more information than pie or line charts alone but may clutter the observer’s mind
with too many details if too many data series are used; thus, they should be used with care.
EXAMPL E 3.5 An Area Chart for Energy Consumption

Figure 3.13 displays total energy consumption (billions Btu) proportion of fossil fuel consumption has remained generally
and consumption of fossil fuels from the Excel file Energy consistent at about half of the total, indicating that alterna-
Production & Consumption. This chart shows that although tive energy sources have not replaced a significant portion
total energy consumption has grown since 1949, the relative of fossil fuel consumption.
▶▶ Figure 3.12
Alternative Column Chart for
Marital Status: Not a High
School Grad
▶▶ Figure 3.13
Area Chart for Energy
Consumption
Scatter Charts and Orbit Charts

Scatter charts show the relationship between two variables. To construct a scatter chart,
we need observations that consist of pairs of variables. For example, students in a class
might have grades for both a midterm and a final exam. A scatter chart would show whether
high or low grades on the midterm correspond strongly to high or low grades on the final
exam, or whether the relationship is weak or nonexistent.
EXAMPLE 3.6 A Scatter Chart for Real Estate Data

Figure 3.14 shows a scatter chart of house size (in square Market Value. The data clearly suggest that higher market
feet) versus the home market value from the Excel file Home values are associated with larger homes.
An orbit chart is a scatter chart in which the points are connected in sequence, such
as over time. Orbit charts show the “path” that the data take over time, often showing
some unusual patterns that can provide unique insights. You can construct an orbit chart
by creating a scatter chart with smooth lines and markers from the scatter chart options.
Figure 3.15 shows an example from the Gasoline Sales Excel file using the first 10 weeks
of data.
▶▶ Figure 3.14
Scatter Chart of House Size
Versus Market Value
▶▶ Figure 3.15
Orbit Chart
Bubble Charts
A bubble chart is a type of scatter chart in which the size of the data marker corresponds
to the value of a third variable; consequently, it is a way to plot three variables in two
dimensions.
EXAMPL E 3.7 A Bubble Chart for Comparing Stock Characteristics

Figure 3.16 shows a bubble chart for displaying price, P/E Comparisons. The position on the chart shows the price and
(price/earnings) ratio, and market capitalization for five dif- P/E; the size of the bubble represents the market cap in bil-
ferent stocks on one particular day from the Excel file Stock lions of dollars.
▶▶ Figure 3.16
Bubble Chart for Stock

Comparisons
Combination Charts
Often, we wish to display multiple data series on the same chart using different chart types.
Excel 2016 for Windows provides a Combo Chart option for constructing such a combination
chart; in Excel 2016 for Mac, it must be done manually. We can also plot a second data
series on a secondary axis; this is particularly useful when the scales differ greatly.
EXAMPLE 3.8 Creating a Combination Chart and Secondary Axis

Figure 3.17 shows data that have been added to the Monthly Next, to plot product E sales and the percent of the goal
Product Sales data–a sales goal for product E and the per- achieved, select the data in columns F and H (first select the
cent of the goal that was actually achieved. We will first con- data in column F, then hold the Ctrl key and select the data
struct a chart that shows the sales of product E as compared in column H). Choose a Combo Chart again. Because the
to the monthly goals. In Excel 2016 for Windows, select the percent of goal data series is very small in comparison to
data in columns G and H, and from the Charts options in the product sales, the line chart will look like it is on the x-axis.
Insert ribbon, select Insert Combo Chart. Figure 3.18 shows Carefully right click on this data series and select Format
the result. On a Mac, create a standard column chart using Data Series > Axis > Plot series on secondary axis. The scale
both data series. Then right click the product E goal data for % Goal will be added on the secondary axis on the right
series, select Change Chart Type, and select Line. of the chart, as in Figure 3.19.
▶▶ Figure 3.17
Monthly Product Sales
with Additional Data
▶▶ Figure 3.18
Combination Chart
▶▶ Figure 3.19
Combination Chart with Sec-
ondary Axis
Radar Charts
Radar charts show multiple metrics on a spider web. This is a useful chart to compare
survey data from one time period to another or to compare performance of different entities
such as factories, companies, and so on using the same criteria.
EXAMPL E 3.9 A Radar Chart for Survey Responses

Figure 3.20 shows average survey responses for six questions the average responses between the first and second quarters.
on a customer satisfaction survey. The radar chart compares You can easily see which responses increased or decreased.
Stock Charts
A stock chart allows you to plot stock prices, such as daily high, low, and close values. It
may also be used for scientific data such as temperature changes. We will explain how to
create stock charts in Chapter 6 to visualize some statistical results, and again in C
hapter 15
to visualize optimization results.
Charts from PivotTables

If you click inside a PivotTable, you can easily insert a chart that visualizes the data in the
PivotTable from the Insert tab using any of the recommended charts, or by choosing your
▶▶ Figure 3.20
Radar Chart
own. In Excel for Windows, this is called a PivotChart (see the Appendix to this chapter
for further information about PivotCharts). You can do this on a Mac also; however, charts
created from PivotTables will not have the Filter buttons as described in the Appendix.
Geographic Data
Many applications of business analytics involve geographic data. For example, finding the
best location for production and distribution facilities, analyzing regional sales perfor-
mance, transporting raw materials and finished goods, and routing vehicles such as deliv-
ery trucks involve geographic data. In such problems, data mapping can help in a variety of
ways. Visualizing geographic data can highlight key data relationships, identify trends, and
uncover business opportunities. In addition, it can often help to spot data errors and help
end users understand solutions, thus increasing the likelihood of acceptance of decision
models. Companies like Nike use geographic data and information systems for visualizing
where products are being distributed and how that relates to demographic and sales infor-
mation. This information is vital to marketing strategies. The use of prescriptive analytic
models in combination with data mapping was instrumental in the success of Procter &
Gamble’s North American supply chain study, which saved the company in excess of $200
million dollars per year.2 We discuss this application in Chapter 14.
Excel 2016 for Windows includes a geographic visualization tool called 3D Maps.
We encourage you to explore this. Another excellent option is Tableau, which is described
in the Appendix to this chapter, in which we will illustrate its geographic visualization
capabilities.
1. Summarize the most useful charts available in Excel and the types of applications for
which they should be used.
2. What is the difference between a bar and a column chart?
3. Why don’t data visualization professionals recommend the use of pie charts?
4. How do you create a combination chart in Excel?
Other Excel Data Visualization Tools

Microsoft Excel offers numerous other tools to help visualize data. These include data
bars, color scales, icon sets, and sparklines. These options are part of Excel’s Conditional
Formatting rules, which allow you to visualize different numerical values through the use
of colors and symbols. Excel has a variety of standard templates to use, but you may also
customize the rules to meet your own conditions and styles using the New Formatting Rule
option. This allows you to format cells that only contain certain values, those that are above
or below average, as well as other rules. We encourage you to experiment with these tools.
Data Bars
Data bars display colored bars that are scaled to the magnitude of the data values (similar
to a bar chart) but placed directly within the cells of a range.
2
J. Camm et al., “Blending OR/MS, Judgment and GIS: Restructuring P&G’s Supply Chain,” Interfaces,
27, 1 (1997): 128–142.
▶▶ Figure 3.21
Example of Data Bars
EXAMPL E 3.10 Data Visualization with Data Bars

Figure 3.21 shows data bars applied to the data in the Figure 3.22 illustrates this for the total monthly sales. We first
Monthly Product Sales worksheet. Highlight the data in each summed the monthly sales in column G, then copied these
column, click the Conditional Formatting button in the Styles to column H. Then highlight the range of data in column H,
group within the Home tab, select Data Bars, and choose the click Conditional Formatting, choose Data Bars, and select
fill option and color. More Rules. In the Edit Formatting Rule dialog, check the
You may also display data bars without the data in the box Show Bar Only. If some data are negative, data bars will
cells. A useful tip is to copy the data next to the original display them on the left side of a vertical axis, allowing you
data to display the data bars along with the original data. to clearly visualize both positive and negative values.
Color Scales
Color scales shade cells based on their numerical value using a color palette. This is
another option in the Conditional Formatting menu.
EXAMPL E 3.11 Data Visualization with Color Scales

Figure 3.23 shows the use of a green-yellow-red color scale the darker the red, the smaller the value. For intermediate
for the monthly product sales, which highlights cells contain- values, you can see that the colors blend together. This
ing large values in green, small values in red, and middle provides a quick way of identifying the largest and smallest
values in yellow. The darker the green, the larger the value; product-month sales values.
▶▶ Figure 3.22
Displaying Data Bars
Outside of Data Cells
▶▶ Figure 3.23
Example of Color Scales
Color-coding of quantitative data is commonly called a heatmap. Heatmaps are often

used to display geographic data, such as population densities, or other socioeconomic metrics
by nation, state, county, and so on.
Icon Sets
Icon sets provide similar information as color scales using various symbols such as arrows
(see Figure 3.24) or red/yellow/green stoplights. Many companies use green, yellow, and
red stoplight symbols to show good, marginal, and poor performance, respectively, in busi-
ness dashboards. The next example illustrates this, and also shows how to customize a
conditional formatting rule.
EXAMPLE 3.12 Data Visualization with Customized Icon Sets

Figure 3.25 shows a set of stoplight icons that code the works, look at product B. The minimum value is 3,024 and
monthly product sales for each product as green if they are the maximum is 5,991. So 80% is 3024 + 0.8 × (5991 − 3024)
in the top 20% of the data range, red if in the bottom 20%, = 5397.6. Thus, any cell value above this is coded as green.
and yellow if in between. Note that because of the relative Similarly, 20% is 3024 + 0.2 × (5991 − 3024) = 3617.4; any
differences in the magnitude of sales among products, we cell value below this is coded as red. In the Edit Formatting
created a new rule for each column of data. Highlight the Rule dialog, you may also change the rule to code the cells
data in a column, click Conditional Formatting, select Icon based on their actual values by changing Percent to Number
Sets, and then select More Rules. In the Edit Formatting from the drop-down box. For example, you could code all
Rule dialog, change the default values of 67 and 33% to 80 values for product B greater than or equal to 5,000 as green
and 20%, as shown in the figure. To understand how this and all values below 4,000 as red.
▶▶ Figure 3.24
Example of Icon Sets
▲▲ Figure 3.25
Creating Customized Icon Sets
Sparklines
Sparklines are graphics that summarize a row or column of data in a single cell. Spar-
klines were introduced by Edward Tufte, a famous expert on visual presentation of data.
He described sparklines as “data-intense, design-simple, word-sized graphics.” Excel has
three types of sparklines: line, column, and win/loss. Line sparklines are useful for time-
series data, while column sparklines are more appropriate for categorical data. Win/loss
sparklines are useful for data that move up or down over time. They are found in the Spar-
klines group within the Insert tab on the ribbon.
EXAMPL E 3.13 Examples of Sparklines

We will again use the Monthly Product Sales data. Figure 3.26 and scale the bars properly by choosing Axis from Group in
shows line sparklines in row 16 for each product. In column the Sparkline Tools Design tab.
G, we display column sparklines, which are essentially small Figure 3.27 shows a modified worksheet in which we
column charts. Generally, you need to expand the row or col- computed the percentage change from one month to the
umn widths to display them effectively. Notice, however, that next for products A and B. The win loss sparklines in row 16
the lengths of the bars are not scaled properly to the data; show the patterns of sales increases and decreases, sug-
for example, in the first one, products D and E are roughly gesting that product A has a cyclical pattern while product
one-third the value of product E, yet the bars are not scaled B changed in a more random fashion. If you click on any
correctly. Excel defaults to automatic scaling of the minimum cell containing a sparkline, the Sparkline Tools Design tab
and maximum values of the vertical axis. You can change this appears, allowing you to customize colors and other options.
▶▶ Figure 3.26
Line and Column Sparklines
▶▶ Figure 3.27
Win/Loss Sparklines
1. Explain the purpose of data bars, color scales, and icon sets.
2. What is a heatmap, and what are some typical applications?
3. How are sparklines different from standard Excel charts?
Dashboards
Making data visible and accessible to employees at all levels is a hallmark of effective
modern organizations. A dashboard is a visual representation of a set of key business
measures. It is derived from the analogy of an automobile’s control panel, which displays
speed, gasoline level, temperature, and so on. Dashboards provide important summaries
of key business information to help manage a business process or function. For example,
the Cincinnati Zoo (see the introduction in Chapter 1) uses hourly, daily, and yearly dash-
boards that show such metrics as attendance and types of admission, cities where visitors
come from, and revenue at different food and retail locations.
Dashboards are particularly useful for senior managers who don’t have the time to sift
through large amounts of data and need a summary of the state of business performance
during monthly or quarterly reviews. Dashboards might include tabular as well as visual
data to allow managers to quickly locate key data. Figure 3.28 shows a simple dashboard
for the product sales data in Figure 3.1. Dashboards often incorporate color scales or icon
sets to quickly pinpoint areas of concern. This one displays the monthly sales for each
product individually, sales of all products combined, total annual sales by product, a com-
parison of the last two months, and monthly percent changes by product.
An effective dashboard should capture all the key information that the users need
for making good decisions. Important business metrics are often called key performance
indicators (KPIs). People tend to look at data at the top left first, so the most important
charts should be positioned there. An important principle in dashboard design is to keep
it simple—don’t clutter the dashboard with too much information or use formats (such as
3-D charts) that don’t clearly convey information.
▲▲ Figure 3.28
Dashboard for Product Sales
1. What is a dashboard?
2. What are the key design principles for dashboards?
3. What is a key performance indicator (KPI)?
ANALYTICS IN PRACTICE: Driving Business Transformation with

IBM Business Analytics3
Founded in the 1930s and headquartered in Ballinger, need to do to improve their metrics. It’s a much more effec-
Texas, Mueller is a leading retailer and manufacturer of tive way of driving the changes in behavior that are vital for
pre-engineered metal buildings and metal roofing products. business transformation.”
Today, the company sells its products directly to consum- Recently, IBM Business Analytics Software Services
ers all over the southwestern United States from 35 loca- helped Mueller upgrade to IBM Cognos 10. With the new
tions across Texas, New Mexico, Louisiana, and Oklahoma. version in place, Mueller has started using a new feature
Historically, Mueller saw itself first and foremost as a called Business Insight to empower regional sales man-
manufacturer; the retail aspects of the business were a sec- agers to track and improve the performance of their sales
ondary focus. However, in the early 2000s, the company teams by creating their own personalized dashboards.
decided to shift the focus of its strategy and become much “Static reports are a good starting point, but people
more retail-centric—getting closer to its end-use custom- don’t enjoy reading through pages of data to find the infor-
ers and driving new business through a better understand- mation they need,” comments Mark Lack. “The new version
ing of their needs. To achieve its transformation objective, of Cognos gives us the ability to create customized interac-
the company needed to communicate its retail strategy to tive dashboards that give each user immediate insight into
employees across the organization. their own specific area of the business, and enable them to
As Mark Lack, Manager of Strategy Analytics and drill down into the raw data if they need to. It’s a much more
Business Intelligence at Mueller, explains: “The transforma- intuitive and compelling way of using information.”
tion from pure manufacturing to retail-led manufacturing Mueller now uses Cognos to investigate the reasons
required a more end-customer-focused approach to sales. why some products sell better in certain areas, which of its
We wanted a way to track how successfully our sales teams products have the highest adoption rates, and which have
across the country were adapting to this new strategy, and the biggest margins. Using these insights, the company can
identify where improvements could be made.” adapt its strategy to ensure that it markets the right prod-
To keep track of sales performance, Mueller worked ucts to the right customers—increasing sales.
with IBM to deploy IBM Cognos Business Intelligence. The By using IBM SPSS Modeler to mine enormous vol-
IBM team helped Mueller apply technology to its balanced umes of transactional data, the company aims to reveal
scorecard process for strategy management in Cognos patterns and trends that will help to predict future risks
Metric Studio. and opportunities, as well as uncover unseen problems
By using a common set of KPIs, Mueller can eas- and anomalies in its current operations. One initial project
ily identify the strengths and weaknesses of all of its sales with IBM SPSS Modeler aims to help Mueller find ways to
teams through sales performance analytics. “Using Metric reduce its fuel costs. Using SPSS Modeler, the company is
Studio in Cognos Business Intelligence, we get a clear pic- building a sophisticated statistical model that will automate
ture of each team’s strategy performance,” says Mark Lack. the process of analyzing fuel transactions for hundreds of
“Using sales performance insights from Cognos score- vehicles, drivers, and routes.
cards, we can identify teams that are hitting their targets, “With SPSS Modeler, we will be able to determine the
and determine the reasons for their success. We can then average fuel consumption for each vehicle on each route over
share this knowledge with underperforming teams, and the course of a week,” says Mark Lack. “SPSS will automati-
demonstrate how they can change their way of working to cally flag up any deviations from the average consumption,
meet their targets.” and we then drill down to find the root cause. The IBM solution
Instead of just trying to impose or enforce new ways helps us to determine if higher-than-usual fuel transactions
of working, we are able to show sales teams exactly how are legitimate—for example, a driver covering extra miles—or
they are contributing to the business, and explain what they the result of some other factor, such as fraud.”
3
“Mueller builds a customer-focused business,” IBM Software, Business Analytics, © IBM Corporation, 2013.
KEY TERMS
Area chart Icon sets

Bar chart Key performance indicator (KPI)
Bubble chart Line chart
Color scales Orbit chart
Column chart Pie chart
Combination chart Radar chart
Dashboard Scatter chart
Data bars Sparklines
Data visualization Stock chart
Heatmap
CHAPTER 3 TECHNOLOGY HELP
Excel Techniques StatCrunch

Creating a chart (Example 3.2): StatCrunch provides various ways to chart and visual-
Highlight the range of the data to chart. Click the ize data, including charts that are difficult to implement
Insert tab in the Excel ribbon. Click the chart type, in Excel and are not discussed in this chapter. You can
and then click a chart subtype that you want to use. find video tutorials with step-by-step procedures and
Use the options in the Design (Chart Design on a Study Card examples at https://www.statcrunch.com/5.0/
Mac) and Format tabs within the Chart Tools tabs example.php. We suggest that you first view the tutorials
to customize the chart, or use the Quick Layout op- Getting started with StatCrunch and Working with Stat-
tions. To add a title, click on the Add Chart Elements Crunch sessions. The following tutorials are listed in the
button in the Design tab ribbon. The names of the Graphs section on this Web page and explain how to create
data series can be changed by c licking on the Select basic charts:
Data button in the Data group of the Design tab.
■■ Pie charts from raw data
Creating combination charts (Example 3.8):
■■ Pie charts with summary data
To display multiple data series on the same chart u sing
■■ Split and stacked bar plots
different chart types in Excel 2016 for Windows,
■■ Charting values across multiple columns
select the data series in two columns, and from the
Scatter plots
■■
Charts options in the Insert ribbon, select Insert Com-
■■ Bubble plots
bo Chart. On a Mac, create a standard column chart
using both data series. Then right click the data series You can also find tutorials for additional charts and meth-
you wish to change and select Change Chart Type. ods for customizing colors and styles:
Display data bars, color scales, and icon sets (Examples ■■ Dotplots
3.10–3.12): ■■ Stem and leaf plots
Highlight the data, click the Conditional Formatting ■■ Boxplots with a group by column
button in the Styles group within the Home tab, and ■■ Painting/annotating graphs
select Data Bars, Color Scales, or Icon Sets. Choose
Example: Loading a file
the display you want or select More Rules to custom-
ize it. You may also select from other predetermined Click the Data menu, choose Load, and select the option.
rules from the Conditional Formatting menu. Example: Create a Scatter Plot
Displaying Sparklines (Example 3.13): 1. Select the X column and Y column for the plot.
Select Sparklines from the Insert tab. Choose Line, 2. Enter an optional Where statement to specify the data
Column, or Win/Loss, and complete the dialog. Ex- rows to be included.
pand the height or width of the cells to improve the 3. Color-code points with an optional Group by column.
visualization. 4. Click Compute! to produce the plot.
Example: Create a Pie Chart with Summary Data 2. Enter an optional Where statement to specify the data
1. Select the variable that contains the categories and the rows to be included.
variable that contains the counts for the plot. 3. Click Compute! to produce the plot.
PROBLEMS AND EXERCISES
Creating Charts in Microsoft Excel each product with the date. Would any other charts be
better for visually conveying this information? Why?
1. Create clustered column and stacked column charts
for the pre-MBA and post-MBA salary data in the 10. The Excel file Transportation provides sales data
Excel file MBA Motivation and Salary Expectations. about 10 different industries. Construct two stacked
Discuss which type of chart you feel is better to use bar charts that will allow you to compare any differ-
to explain the information. ences due to time or age groups and draw any conclu-
sions that you can. Suggest another type of chart that
2. Create a line chart illustrating the number of AM
may be more appropriate.
and PM travelers for each month in the Excel file
Traveler. 11. Construct an appropriate chart to show the sales per
unit for the primary industry in the Excel file Primary
3. Create a pie chart for all the given dates and a stock
Industry.
chart for the high/low/close prices for March 2018 in
the Stock Excel file. 12. Construct an appropriate chart or charts to visualize
the information in the Budget Forecasting Excel file.
4. The Excel file Expenditure contains data on a coun-
Explain why you chose the chart(s) you used.
try’s expenditure on various sports during a particu-
lar year. Create a pie chart showing the percentage 13. A survey was conduct for determine the number of
breakdown of total expenditure. vegetarians and non-vegetarians between two differ-
ent group of age of people. The survey results the
5. Create a stacked area chart for the monthly average
followings
sales of the different types of fuel in the Excel file
Average Fuel Sales. What conclusion can you reach?
Age Group Vegetarians Non-vegetarians
6. The Excel file Mortgage Installment provides the 30 to 6 40 186 432
monthly installment of a mortgage loan by different Ú 40 239 293
fixed interest rate (%) provided by different banks.
Construct a scatter diagram to show the relationship Convert the data into percentages for each age
between the monthly installment and the fixed inter- group. Then construct a chart of count and a chart
est rate (%).What conclusion can you reach? of percentages. Interpret both the charts and discuss
7. The Excel file Monthly Visits provides the data for whether there is a difference between the two charts.
monthly visitors visited a playground and the number
of shows prepared by the playground organizer dur- Other Excel Data Visualization Tools
ing the specific month. Create a scatter diagram to 14. In the Excel file Banking Data, apply the following
show the relationship between the number of visitors data visualization tools:
and the number of shows. What conclusion can you
a. Use data bars to visualize the relative values of
reach?
median home value.
8. Create a bubble chart for the first five colleges in the b. Use color scales to visualize the relative values of
Excel file Colleges and Universities for which the median household wealth.
x-axis is the top 10% HS, y-axis is acceptance rate,
c. Use an icon set to show high, medium, and low
and bubbles represent the expenditures per student.
average bank balances, where high is above
9. Construct a column chart for the data in the Excel file $30,000, low is below $10,000, and medium is
Purchasing Rate to allow comparison of the rate for anywhere in between.
15. Apply three different colors of data bars to lunch, din- however, additional guests must pay an additional
ner, and delivery sales in the Excel file Restaurant Sales $20 per person per day for meals. Guests staying for
to visualize the relative amounts of sales. Then sort the seven days or more receive a 10% discount. Modify
data by the day of the week beginning on Sunday. Com- the spreadsheet to calculate the number of days that
pare the nonsorted data with the sorted data and com- each party stayed at the inn and the total revenue for
ment on the information content of the visualizations. the length of stay. Use appropriate charts and layouts
and other visualization tools that help to convey the
16. For the Store and Regional Sales database, apply a information. Explain why you chose the elements of
four-traffic-light icon set to visualize the distribu- the dashboard and how a manager might use them.
tion of the number of units sold for each store, where
green corresponds to at least 30 units sold, yellow to 19. Create a useful dashboard for the data in the Excel
at least 20 but less than 30, red to at least 10 but less file Restaurant Sales. Use appropriate charts and
than 20, and black to below 10. layouts and other visualization tools that help to
convey the information. Explain why you chose the
17. For the Excel file Closing Stock Prices, elements of the dashboard and how a manager might
a. apply both column and line sparklines to visual- use them.
ize the trends in the prices for each of the four
20. Create a useful dashboard for the data in the Excel
stocks in the file.
file Store and Regional Sales Database. Use appro-
b. compute the daily change in the Dow Jones index priate charts and layouts and other visualization tools
and apply a win/loss sparkline to visualize the that help to convey the information. Explain why you
daily up or down movement in the index. chose the elements of the dashboard and how a man-
ager might use them.
Dashboards
21. Create a useful dashboard for the data in the Excel
18. Create a useful dashboard for the data in the Excel file Employees. Use appropriate charts, layouts, and
file President’s Inn Guest Database. Use the addi- other visualization tools that help to convey the infor-
tional information stated in Problem 20 of Chap- mation. Explain why you chose the elements of the
ter 2: Room rates are the same for one or two guests; dashboard and how a manager might use them.
CASE: PERFORMANCE LAWN EQUIPMENT
Part 1: PLE originally produced lawn mowers, but a a. Dealer Satisfaction

significant portion of sales volume over recent years has b. End-User Satisfaction
come from the growing small-tractor market. As we noted
c. Complaints
in the case in Chapter 1, PLE sells their products worldwide,
with sales regions including North America, South America, d. Mower Unit Sales
Europe, and the Pacific Rim. Three years ago, a new region e. Tractor Unit Sales
was opened to serve China, where a booming market for f. On-Time Delivery
small tractors has been established. PLE has always empha-
g. Defects After Delivery
sized quality and considers the quality it builds into its prod-
ucts as its primary selling point. In the past two years, PLE h. Response Time
has also emphasized the ease of use of their products. Part 2: Propose a monthly dashboard of the most important
Before digging into the details of operations, Eliza- business information that Ms. Burke can use on a routine
beth Burke wants to gain an overview of PLE’s overall basis as data are updated. Create one using the most recent
business performance and market position by examining data. Your dashboard should not consist of more than six to
the information provided in the database for this com- eight charts, which should fit comfortably on one screen.
pany. Specifically, she is asking you to construct appropri-
ate charts for the data in the following worksheets in the Write a formal report summarizing your results for both
Performance Lawn Equipment Database and summarize parts of this case.
your conclusions from analysis of these charts.

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CHAPTER

The Value of Data Visualization

EXAMPL E 3.1 Tabular Versus Visual Data Analysis

ANALYTICS IN PRACTICE: Data Visualization for the New York City

Tools and Software for Data Visualization

CHECK YOUR UNDERSTANDING

Creating Charts in Microsoft Excel

Column and Bar Charts

and for showing proportions or percentages of a whole.

EXAMPLE 3.2 Creating Column Charts

Data Label and Data Table Chart Options

EXAMPLE 3.3 A Line Chart for China Export Data

EXAMPLE 3.4 A Pie Chart for Census Data

EXAMPL E 3.5 An Area Chart for Energy Consumption

Scatter Charts and Orbit Charts

EXAMPLE 3.6 A Scatter Chart for Real Estate Data

EXAMPL E 3.7 A Bubble Chart for Comparing Stock Characteristics

Bubble Chart for Stock

EXAMPLE 3.8 Creating a Combination Chart and Secondary Axis

EXAMPL E 3.9 A Radar Chart for Survey Responses

Charts from PivotTables

CHECK YOUR UNDERSTANDING

Other Excel Data Visualization Tools

EXAMPL E 3.10 Data Visualization with Data Bars

EXAMPL E 3.11 Data Visualization with Color Scales

Color-coding of quantitative data is commonly called a heatmap. Heatmaps are often

EXAMPLE 3.12 Data Visualization with Customized Icon Sets

EXAMPL E 3.13 Examples of Sparklines

CHECK YOUR UNDERSTANDING

CHECK YOUR UNDERSTANDING

ANALYTICS IN PRACTICE: Driving Business Transformation with

Area chart Icon sets

CHAPTER 3 TECHNOLOGY HELP

Excel Techniques StatCrunch

PROBLEMS AND EXERCISES

CASE: PERFORMANCE LAWN EQUIPMENT

Part 1: PLE originally produced lawn mowers, but a a. Dealer Satisfaction

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ANALYTICS IN PRACTICE: Data Visualization for the New York City

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