2014FP&a Guide DataVisualization 3 0
2014FP&a Guide DataVisualization 3 0
Sponsored by
Issue 6
AFP GUIDE TO
Contents
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Conclusion
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Financial planning and analysis (FP&A) teams are increasingly being challenged to produce
and organize financial data, and also convey it through intuitive images.
Without the ability to organize and present data efficiently, decision-making takes longer.
Information can also become lost or outdated. Moreover, understanding the story may
become difficult for not only FP&A teams, but more importantly, for management and key
decision makers.
FP&A teams need a reliable, efficient, and interconnected method of organizing and presenting
their financial data. Telling a story simply and effectively through intuitive images makes it
easy to communicate and collaborate throughout all levels of the companygiving
management more time to interpret and make critical decisions.
With this in mind, Workiva is pleased to partner with the Association for Financial
Professionals (AFP) to produce this AFP Guide to Data Visualization: How to Tell Number
Stories with Pictures.
This guide explores how finance professionals look at data visualization as a way to solve
problems, identify patterns, and understand whats driving organizational performance.
The guide also provides real-world examples of how FP&A teams are implementing
visualization today.
As FP&A teams explore ways to provide better visual representations of their data, they also
should look for reporting solutions that enable them to:
Create intuitive and compelling stories easily using graphs and charts, with the ability
to drill down or show high-level trends on strategic measures showing business
performance to multiple audiences within their organization
Ensure one central source of truth for information that can be linked into financial reports,
dynamic, at-a-glance dashboards to management, and presentations that enable readers
to digest key messages rapidly
Encourage collaborative and productive conversations to identify and find answers to key
business questions that will improve the quality of analysis, so insights are communicated
to executive management and the board more efficiently
Companies are pushing hard for better graphical representation of data. FP&A teams are
expected to visualize whats important without distracting from the key message at hand.
Interacting and reporting data from one central data set will play an integral role in telling a
story with accurate and consistent information across charts, graphs, and dashboards.
Joseph Howell
Managing Director and Co-Founder
Workiva
AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Executive Summary
Graphical excellence is the well-designed presentation of interesting data a matter of substance, of statistics, and of
design. Graphical excellence consists of complex ideas communicated with clarity, precision and efficiency. Graphical
excellence is that which gives to the viewer the greatest number of ideas in the shortest time with the least ink in the
smallest amount space. Edward R. Tufte
Financial planning and analysis professionals are increasingly using charts and graphs to visualize data, interact with
information, and present it to senior management and the
board to tell stories and drive important conversations.
Graphical information is more intuitively absorbed in
our minds and can capture large amounts of data in a
much more succinct format, allowing FP&A to spot
and show trends, patterns and anomalies more effectively.
Using graphics, finance professionals can tell better stories, pinpoint action items, and create effective
dashboards that allow management to see the business at
a glance. These dashboards need to be tailored to audiences more high-level for the board, more detailed for
operations. However, they should all draw on the same
set of data, or version of the truth.
FP&A professionals are only beginning to use highlevel visualization to interact more effectively with their
data, perform their own analyses, validate hypotheses, ask
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
24.0%
35.1%
Yes
No
Not sure
40.9%
More interactive
More chart types
(heat chart, fractals,
tree map, bubble
chart, etc.)
56.5%
Access to more
data sources
(internal)
43.5%
Access to more
data sources
(external)
Not sure
21.2%
7.1%
0%
20%
40%
60%
80%
15.3%
11.8%
72.9%
Included in
performance
management
solution
Doesnt matter
Third-party
solution that
may access my
performance
management
data
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Most humans are wired for visual learning and understanding, said Gary Cokins of Analytics-Based Performance Management and co-author of Predictive Analytics: Forward Looking Capabilities to Improve Business
Performance. Very few people can examine data tables
and pick out trends or grasp big-picture issues, he
continued. Even statisticians and data scientists who
are better equipped than most to deal with data in all its
forms benefit from graphical interpretations.
Data scientists and business analysts need to be able to
communicate in straightforward, visual ways with broad
and diverse audiences. FP&A professionals consistently seek better ways to support decision-makers, said
Madison Laird, CFO of Funding Profiles, a visualization
software provider that brings together finance executives
from companies such as HP, Microsoft, Citigroup, Cisco
and IBM. Theres increasing pressure from the CEO and
COO to view finance as a keeper of the facts and provider
of key insights. They dont want a series of data points or
another fact pact. They want the analysis that helps them
decide on a strategic direction for the organization.
FP&A spends a large amount of time managing large
amounts of information, to craft a lot of insight. A lot of
time is spent taking numbers and presenting them in a
compelling way, said Joe Howell, managing director and
co-founder of Workiva. Visualization gives data credibility.
It gives credence to what theyve done, he said.
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Practitioner perspective
When explaining financial results to executives whose
first language isnt numbers, finance professionals should
start by educating them at a macro level and defining key
metrics. As a general rule, the simpler the graphics used
to convey the information, the better.
According to Jim Robertson, vice president of FP&A at
Emeritus, one should always start by asking: Whats the best
way to communicate the story to the audience? The story
needs to be a standalone document, he said. You never
know where a presentation is going to end up. You cant
assume that any of your key points will be highlighted unless
theyre in the document. Build a presentation that someone
who is smart, but not necessarily knowledgeable about the
topic, can pick up and get the point youre trying to make.
Graphics can be very a very powerful tool when telling a story with quantitative data, especially if you are
trying to draw particular attention to a salient topic, or if
you are trying to summarize large quantities of data in a
meaningful way, said Irena Barisic, deputy CFO of the
Brookings Institution. However, she cautioned, Graphics always have to be presented in context, or introduced
as part of a larger context, in order to tell the full story.
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them to be handled, and what is their geographical location? You have to be able to answer the broader questions so people can discover more about the problem,
he said. Its a sort of partnership with the user.
Its also important to try to tie in predictive analytics, continued Wills. If something happens, what is
the total amount of money youre predicted to lose, and
should you be concerned about the average amount or
the big amounts that are the outliers? Thats the data you
choose to highlight and the context for the analytics.
The measure of value or success of a visualization project
is whether it helped answer the questions.
In order to be able to tailor the image to the audience,
You have to be asking the right questions, said Amanda
Pype, user researcher at Tableau Software, a leading visualization software provider. What do they want to know? The
most important thing is to understand the audience and
what theyre trying to get out of the data. Also, use charts
that they can easily understand, she advised. You dont want
to spend 10 minutes explaining the chart.
One key concern is the reliability of the forecast,
according to Andrew Mosely, director at Metapraxis, a
London-based visualization vendor. Across all indus-
tries, the most common business question is: how credible are the forecasts of our business units? said Mosely.
And when a forecast appears either too optimistic or
overly pessimistic, how can our FP&A team present the
data visually to support their dialogue with the business?
Every business needs to be on top of its numbers. The
challenge is finding out as soon as possible if youre not
going to make that forecast rather than being presented
with an impossible last-minute challenge. Having time
to take action puts you back in control.
Metapraxis software contains a calculation engine that
creates statistical scenarios, which are then presented visually to show trends and variances. Alternative scenarios
are automatically created, against which you can test the
management forecast, according to Mosely. We call this
visualization the Windsock chart (see below).
The Windsock chart tracks the evolution of the
subsidiarys updated year-end forecasts throughout the financial year, comparing them against the annual budget,
prior year performance and a statistical risk range. The
chart shows that the current management forecast for
Net Sales is at the very top of the current risk range and
may be too optimistic.
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Practitioner perspective
According to Barisic, when sharing financial information, the focus is to keep the executive team informed,
as well as to facilitate decision-making and performance
measurement. In order to accomplish these goals:
Use simplified terminology to convey financial
results, assumptions, and conclusions.
Focus on the most salient points and provide sufficient but concise information without being overly
technical and detailed.
The financial discussion needs to be high level and
tied to business strategy. Executives are generally
action-oriented with a forward focus; therefore, you
should always answer the following questions:
- Why does this data matter?
- What impact does the financial result/conclusion
have on us today and in the future?
Be audience-specific.
Always be prepared to discuss any financial information in more detail should it become necessary.
Identifying patterns
Graphs are at their most powerful when helping finance
professionals, and by extension, management, identify
patterns and anomalies. Visualization, particularly of large
amount of data, can reveal trends and deviation from
trends that can compel management to ask the important
questions and take corrective action where necessary.
Visualization can help you see and understand patterns in your own data and help you communicate those
pattern to others. The visual nature of graphs endows
them with their unique power to reveal patterns of various types, including changes, differences, similarities
and exceptions, writes Few. Graphs can communicate
quantitative relationships that are much more complex
than the simple associations between individual quantitative values that tables can express.
According to Pype, Visualization allows you to
understand data holistically, she said. Once you start
looking at graphs, its easier to spot the outliers. Its
incredibly powerful as a complement to statistical information. If you need to show more than one number,
theres no better tool for communicating with others.
For example, how do I compare one region to another?
A visual representation is almost always better when
it comes to comparing patterns. Its highly efficient. A
well-crafted visualization allows the audience to see the
important information immediately.
Visualization is not adding tremendous value when its
in the hand of an analyst whos doing basic profit and loss
(P&L) or balance sheet analytics. According to Schiff, it
starts gaining power when finance professionals are examining high volumes of data in order to spot trends.
Graphics can clearly highlight the trends, particularly
things like activities by certain types of customers, where
manually looking through large amounts of data would
be simply impossible, he said. Putting graphics on top
of analysis intended for a wider audience is important.
The main benefit is the opportunity to clearly communicate your findings to others, especially when you go
outside of finance.
Another place where graphics can be helpful is in
looking at variances, from forecast or budget. You can
chart actual versus the forecast or budget and explain
the trend. Using simple tools like stop lights or gauges
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Practitioner perspective
The biggest challenge in communicating financial
information really depends on the audience, according to the vice president of finance at a multinational
technology corporation. When you have a broad, mixed
bag of audiences, with some who understand numbers
and some who dont, you have to strike the right balance
between detail and conceptual information, he said.
Finance is often about very precise messages, for example,
revenue is reported with precision. The challenge is to keep
it broad enough for the audience to understand what youre
trying to say versus trying to deep dive, said the vice president of finance. In my work, Ive learned that graphics that
are simple work more effectively, he said. They have to be
connected to the story youve got to tell and the top-level
message youre trying to communicate.
Thats true of both senior level executives and broader
audiences. It doesnt mean you dont have to be armed
with the details behind it. Keeping it simple and wellstructured is the most important thing.
To tailor the presentation, think about the nuance
you need to include and the degree of detail you need to
provide, he said. With broader audiences, you may use a
detailed view of next years budget, but your presentation
to senior executives would be different. Its an adjustment that takes time. Thats the biggest challenge, he
said. Most finance folks have the data but also have
many presentations to do. Its time consuming to actively
keep tailoring those messages.
David Mann is director of financial planning and
performance of Tufts Health Plan, a health management company with $4 billion in revenue. According
to Mann, the biggest challenge in communicating data
is in ensuring executives feel ownership of the numbers
so they actually care. The second biggest challenge is
including the right level of details.
The question is what material things they need to
know to manage their business, he said. As a result,
every deck is different and in a digestible format. It goes
Constructing dashboards
Dashboards are perhaps the most common use of visual
displays, particularly those used by finance professionals to
communicate key financial metrics to senior management.
Creating an effective dashboard is no easy task: most struggle
with selecting the right charts and striking the right balance
between high-level visualization and detail.
According to BPMs Schiff, its important to keep the
content of your visual dashboard simple and specifically
relevant to your audience. A dashboard is an opportunity to think about whats important to this business,
include only a handful of strategic key measures and how
the business is performing against them, so you really
focus on whats important, he said.
Laird found that as soon as you develop a dashboard,
its relevant for a quarter. Then management says, what
we really need to see is this. They want a different format. It becomes a moving target, he said.
What were seeing is a trend to seek out advisors who
can provide more agile analysis to explain the implications of the data. Executives, in my experience, are very
short-sighted. They want someone to tell them what the
right decisions are. They want trusted advisors who can
be agile enough to answer the tough questions. Thats
not something any application can provide.
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Tips on dashboards
Following are some tips from
DAscoli to help you design an
effective dashboard.
Include only the information that
is relevant to the decisions senior
managers will be making. There is
a propensity to include all available data and metrics. This defeats
the purpose of the dashboard and
will make it difficult to identify key
pieces of information that will drive
better business decisions.
Keep the metrics strategic, objective
and measurable. Example: In finance,
its not important to measure the number of projects implemented; we want
to know what impact those projects
had on company performance.
Provide a clean, consistent dashboard that conveys insight. Many
dashboards include a plethora of
colors, graphs, and fonts. Competing
or inconsistent use of color will draw
the eye in a variety of directions and
confuse the audience as to what the
colors mean. A variety of graphs
require the reader to continually
decipher the meaning, slowing them
down as they work to interpret the
meaning of each type of visual.
It is essential to design effective,
actionable dashboards. It is often
the case that a report suggests
something counter-intuitive to
corporate thinking or tradition, so
the information included must be
defensible and accurate. The design
must demonstrate knowledge of
business processes in order to
inspire confidence.
AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Credit Risk: Financial risk KPIs and heat map showing concentrations of risk across different
dimensions (e.g., industry, customer, country, credit manager).
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Exec Dashboard: Inventory analysis from a supply chain provider that correlates inventory
against sales and expenses.
Practitioner perspective
The message needs to be tailored to the audience. How
thats done depends on the objective of the message, according to Barisic. For the board and for senior management, I
prepare materials with a high-level focus, including only the
most salient points necessary for decision-making, over the
horizon risk management, or as support in strategic objectives development, she said. For operational leaders, the
focus is on more detailed, specific and technical information.
Operational leaders need information to enable their day-today decision-making, so messaging needs to be focused and
more frequent.
Before even beginning the dashboard design, I think
very carefully about the objectives of the dashboard, the
messages that it should convey, the audience who will
utilize the dashboard, as well as the frequency of data updating and dashboard dissemination, Barisic continued.
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Ultimately, Barisic said, dashboard design and development is an iterative process. Even when the initial
draft is completed and presented to the audience, we
should be receiving and welcoming additional feedback
on the dashboard itself and how well it is communicating to the audience. This feedback is then incorporated
into future iterations of the dashboard.
Barisic sticks to one page or a single screen for at-aglance review. Measures that are related and need to
be reviewed together should be on the same page (basic
visual perception and data visualization studies). Fragmenting data is not recommended when data shown is
linked and needs to be viewed together. This is not only
important for dashboards, but for the design of other
financial management tools as well (e.g., financial system
design, particularly data entry screens).
The goal of a dashboard is to communicate information to an audience in a simple, clear and effective way,
Barisic said. This means that we need to fully understand the objectives of the audience before designing the
dashboard. Once we have a good understanding of their
objectives, we have to decide on an appropriate display
media to use: graph types or well-designed tables. We
need to know how to organize dashboard information so
that data is meaningfully and effectively organized and
not fragmented.
Consistency is also important. Choose a display media or two and stick to them, said Barisic. If you have
multiple display media, such as bar charts, line charts,
tables, etc. in one dashboard, the viewer will need to
adjust their view and perception to absorb the layout and
message of each display/. This adjustment takes time
that most executives have very little of, especially if they
are trying to very quickly make a decision.
To assess whether a chart is good or not, I look to see
if the graph enables me to process all of the data quickly,
Barisic said. The question she asks is: Can I easily interpret
the graph, and is my focus drawn to data or some other
aspect of the graph? She also looks to see if the information
is presented via an appropriate media/graph type. Then I
continue to evaluate the scaling and labeling and the use of
color. Has everything that needs to be eliminated from the
graph been done so that the focus is on data only?
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
DNV GL Dashboard
Source: DNV GL. Data shown is for illustration purposes only and does not reflect DNVs real status.
According to Fleishman, the most effective dashboards are one-pagers that are not too dense and use all
the information on the slide to tell a story in a unique
way. Hes a fan of switching out the graphs so people
dont get used to seeing the same thing every week and
are instead drawn to the new image. It gets people attention because its new, he said. Adding a little text to
explain the visual is also very helpful.
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Example Dashboard #1
Not everyone tailors the message to specific audiences. Interestingly, from a visual standpoint, we
communicate a good bit of the same information in
the same form to different audiences, said Dan McGowan, CEO of Pioneer NV Federal Credit Union.
For instance, its not uncommon at our monthly staff
meetings for employees to see some of the very same
PowerPoint slides the board sees at its meeting, he
said. A big part of the reason for that is a desire to
be transparent to all stakeholders. Still, he said, We
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Example Dashboard #2
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Pie charts
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Computer Services
2%
Editing/Publishing
Travel and Business Entertainment
2%
2%
Conference, Meetings
and Exhibits
7%
Office Expenses
and Other Costs*
7%
Salaries
and
Benefits
61%
Depreciation, Interest
and Maintenance
10%
Contracts and
Professional Fees
9%
Salaries
and
Benefits
60.3%
Depreciation, Interest
and Maintenance
9%
Contracts and
Professional Fees
10.1%
*Other costs category includes marketing and promotions costs.
FY14 Q2 Forecast
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AFP GUIDE: Data Visualization: How to Tell Number Stories with Pictures
Software packages
Heres a partial list of some of the software packages available for
data visualization:
Adaptive Discovery by Adaptive Insights
Tidemark Storylines by Tidemark
Tableau Software
QlikView
TIBCO
Spotfire
IBM Cognos Insight (ex-TM1)
Microsoft Power View,
MicroStrategy Visual Insight
Oracle Exalytics appliance
SAS Visual Analytics
SAS for Big Data
SAP Visual Intelligence
Packages like Tableau, QlikView and Spotfire link directly to source data.
Some can also do calculations directly in the application to convert data
into useful information, according to Robertson. They are a poor mans data
warehouse, he said. Instead of having to rely on IT, the packages allow a user
to connect to disparate data directly and perform the necessary calculations.
For example, volume may be in one dataset and pricing in another.
While large systems like COGNOS, Adaptive Planning and Hyperion have
dashboard capabilities built in, its the interactivity of some of the standalone
packages that is where the real power is, Robertson said. My personal feeling is that the dedicated products outside these common architectures do
the best job.
The value add is that many of those packages offer predesigned graphs and
standard visualization tool options something that would take a very long
time to do in Excel. It would take me too long, said Robertson. The process
of creating board presentations, cutting and pasting from various sources can
dispensed with. Refreshing current data with everything formatted correctly
ensures data integrity. It gives you more time to think.
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Headquartered outside Washington, D.C., the Association for Financial Professionals (AFP)
is the professional society that represents finance executives globally. AFP established and
administers the Certified Treasury ProfessionalTM and Certified Corporate FP&A ProfessionalTM
credentials, which set standards of excellence in finance. The quarterly AFP Corporate Cash
IndicatorsTM serve as a bellwether of economic growth. The AFP Annual Conference is the
largest networking event for corporate finance professionals in the world.
AFP, Association for Financial Professionals, Certified Treasury Professional, and Certified
Corporate Financial Planning & Analysis Professional are registered trademarks of the
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All Rights Reserved.
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