The Essentials of Spend Visualization Part 1: The Design Approach

The first installation in “The Essentials of Spend Visualization” describes a design-based approach for developing a spend data visualization. Data visualizations ease a viewer’s understanding of information contained in a given dataset. In many instances visualizing data can be a much more effective means of presenting information than a summary report. The human brain is exceptionally adept at recognizing patterns, thus making visual representations of information preferable to text.

Some visualizations are designed to make a point or emphasize a particular piece of information. Other visualizations are designed to present data in such a way that empowers the viewer to identify what pieces of information are important. Visualizations for business intelligence must always fall in to the latter category. It is essential that the visuals used by procurement professionals to inform their decision making processes are as unbiased as possible. The challenge lies there: how does an engineer design the optimal tool to help end users uncover information that will be most important to them?

In any given procurement team, well-visualized spend data can provide procurement strategists and spend managers invaluable insights. The design of spend visualizations should be born from the following line of questions: who is viewing this visualization, how do they intend to use it, and what questions do these end users have about it? Spend visuals should not in and of themselves be answers to questions, but should instead be tools that allow procurement professionals to answer the questions that they have. As such, every data visualization should be designed from the "what does the end-viewer need?" perspective.

Spend data visualizations can come in two forms: static visuals, and interactive dashboards. While the latter may seem to always be the preferred option, the former is often a better fit for the demands of a given initiative, and usually require much less resources in their development. As a rule of thumb, static visuals are best suited for projects that are smaller, have simpler questions, and are shorter term. The need for an interactive dashboard arises when large datasets are continually utilized for developing insights. Dashboards allow a user to dig-in, interact and view data in multiple ways. A longer term project like this will require stakeholders to understand the information contained in data from a number of perspectives. Furthermore, an interactive visual allows a user to ask and answer multiple rounds of interrelated questions as they delve deeper in to their exploration of the data. It is important to emphasize again that not every projects justifies the effort required to develop these more extensive visualizations.

Every data visualization should be tailored to the business objective and execution environment of the procurement project. Here are some key questions the design engineer should have answered during this phase: What are the business objectives of the engagement? How does the visual fit in to the execution? What is the timeline of the project? Who is going to be viewing the visualization? What level of data literacy do these stakeholders have? What is the specific information that stakeholders want to have on display? The initial design phase of a spend visual’s lifecycle should not be considered complete until these questions (and others like them) are answered. Only once a holistic understanding of business requirements is achieved should the technical and aesthetic details of the visualization be fleshed out.

Up Next: The Essentials of Spend Visualization Part 2: Tips and Techniques