Why is data visualization important?

Data visualization provides a quick and effective way to communicate information that's critical to decision-making in organizations.

While business professionals have different areas and levels of expertise, well-designed visualizations make data analysis easier to understand, showing at a glance what is happening or has changed in a particular area. Executives, business managers and operational employees can act faster based on this visual evidence.

Among other things, visualizations help businesses to:

• Identify factors that influence customer behavior.
• Find products or services that need to be improved.
• Make information more memorable for stakeholders.
• Decide when and where to deploy specific products.
• Predict product demand, sales or revenue.

Benefits of data visualization

While data visualization serves many purposes, it also supports several ways organizations interpret and act on data, including:  

• Actionable insights. BI dashboards and other data visualization tools help people absorb information quickly, gain better insights and take next steps faster.
• Exploration of complex relationships. Modern analytics and visualization platforms reveal complex relationships across many variables to drive more data-based decisions.
• Clear storytelling. Focused visuals and narratives maintain the audience's interest with information they can readily understand.
• Interactivity. Users can drill into the data behind the charts for deeper analysis.

Data visualization challenges and disadvantages

While data visualization is meant to offer clarity, it can introduce certain risks, including:

• Complexity. Dense visuals obscure data insights. Without visualization training, there's an increased risk that analysts and business users will create cluttered designs or the wrong visual type for the data.
• Misinterpretation. Users might draw incorrect conclusions if visualizations aren't fully clear or if they don't examine the data closely enough.
• Data privacy and security. Organizations face risks related to both the security of data visualization platforms and compliance with data privacy regulations.
• Bias. Visualizations and the data behind them should be scrutinized for signs of bias. Failing to do so could compromise the credibility of the analytics results.
• Environmental impact.Visuals generated with AI often require massive computing power, which can increase energy consumption and affect corporate sustainability goals.

Data visualization, AI and big data

Companies increasingly use machine learning and other AI tools to  process massive amounts of data that can be difficult and time-consuming to sort through and analyze without their help. While these AI-driven analytics applications in big data environments offer new opportunities to present information to stakeholders, they also require new data visualization approaches.

Conventional visualizations, such as pie charts, histograms and graphs, remain useful for summaries but are limited for large-scale data exploration. For deeper discovery, modern big-data platforms pair advanced visuals -- for example, heat maps and scatter plots -- with cloud-powered AI to automatically highlight trends or new opportunities that might otherwise remain buried in the data. This architecture keeps visual designs fast and clear, even when they're built on massive, streaming data sets.

Despite their potential value, data visualization projects on big data platforms have drawbacks, including:

• Information overload.Complex visualizations can confuse users or lead them to make inaccurate conclusions.
• Technical maintenance.Modern data pipelines require constant maintenance to prevent dashboards from breaking. IT teams must also monitor cloud costs.
• Lack of trust.Without governance and transparency, AI-generated insights are opaque, making it difficult to gain user confidence in them.
• Need for advanced skills.Creating sophisticated visuals requires specialized skills. In addition, business users need data literacy skills to understand complex analytics results.
• Data quality issues.Manually checking data quality in big data systems is not feasible. Organizations need automated tools to identify quality and accuracy issues before data reaches dashboards.
• Hidden bias.Even technically accurate visualizations can mislead users without proper context or when data sample sizes are small.

Examples of data visualization

 Tables, bar charts, pie charts and other traditional data visualization methods are still widely used for their simplicity and accessibility. However,data science applications and data storytelling often demand more advanced visualization techniques, such as bullet graphs for tracking performance, heat maps for identifying patterns, bubble charts for analyzing relationships among variables and Sankey diagrams for visualizing flows and processes.

Other types of data visualizations that continue to be popular include:

• Line charts. Among the most basic and widely used techniques, line charts show how variables change over time, making them ideal for trend analysis.
• Area charts. A variation of line charts, area charts fill the space between the x-axis and a line with color or shading. This design shows both how data changes over time and the total volume of the values; different groups of values can also be compared. Some common examples of area charts include tracking population growth or total sales over a specific time period.  
• Treemaps. As the name suggests, treemaps use a tree-like structure to show hierarchical data and how the parts add up to the whole through nested and often color-coded rectangles. The space-filling design reveals patterns or outliers in complex data sets. One example of a treemap is a company's entire budget broken down by department, using different-sized rectangles to show the percentage given to each department.
• Scatter plots. This type of chart shows the relationship between two different variables. Each observation is represented by a dot placed on the chart based on its values for the two variables: one on the x-axis and the other on the y-axis. Scatter plots are helpful to find patterns in data, such as correlations and outliers. For example, a scatter plot can show the connection between the number of hours studied on the x-axis and final test scores on the y-axis; an upward trend would indicate that more studying is associated with higher test scores.
• Population pyramids. These use back-to-back bar charts to display a population's distribution by age, sex and other characteristics. They can show trends that identify demographic shifts driven by events, such as mass migrations or health crises. Business uses include analyzing spending by customer groups, planning retail locations and tracking workforce demographics.

Common data visualization use cases

Across industries, teams use data visualization to see what has changed, why it changed and what to do next.

• Sales and marketing.Interactive dashboards track real-time sales performance. Trend lines show customer engagement. Comparative charts highlight marketing campaigns with the highest ROI. Modern analytics platforms integrate AI to provide predictive forecasting that helps marketers anticipate future trends and optimize budget allocation.
• Healthcare. Choropleth maps show health indicators across regions, such as heart disease mortality rates by state or county, to highlight geographic disparities. These visualizations help healthcare organizations and public health officials identify areas that require more resources. Hospitals also use data visualizations to help diagnose medical conditions and track patient treatments and outcomes.
• Financial services. Finance professionals rely on data visualization to track asset performance and decide when to execute trades. Candlestick charts are the industry standard for visualizing price movements within a specified time frame to show market trends and reactions. In addition, visualized data helps banks analyze credit risks and customer portfolios.
• Insurance. Insurers similarly use data visualizations to analyze policy risks and pricing when customers apply for coverage.
• Manufacturers. Data visualization helps them plan production, monitor manufacturing operations and manage inventories of materials and supplies.
• Logistics. Route optimization dashboards combine real-time data on traffic, weather and inventory to pinpoint the fastest and most cost-effective distribution paths. These visualizations help logistics organizations reduce delivery times, save on fuel costs and better manage their vehicle fleets.
• Travel. Airlines use visualizations of data on ticket sales and flight occupancy rates to adjust flight schedules and plan crew assignments. Similarly, hotel chains track room occupancy and pricing data to guide marketing campaigns and promotions aimed at maximizing bookings.
• Politics. A bivariate choropleth map visualizes voting patterns with demographic overlays showing income or education levels. Time series charts track trends in polling numbers and campaign fundraising to help politicians determine where their messaging yields the most results.
• Scientific research. Scientific visualization turns complex data from experiments and other data collection initiatives into high-dimensional charts and 3D models. These provide researchers with clearer ways to present scientific findings, such as molecular structures or atmospheric changes.

The science of data visualization

Data visualization is grounded in how humans process information. Psychologist Daniel Kahneman, building on decades of collaborative research with colleague Amos Tversky, defined the concept of two systems of thinking in his bookThinking, Fast and Slow:

• System 1 (fast thinking). Quick, automatic and intuitive processing that requires little conscious effort. We use it for everyday tasks, such as reading a sign, solving simple math problems, detecting aggression in voices and distinguishing between colors.
• System 2 (slow thinking). Deliberate and logical processing that requires intentional mental engagement. This system is used for more involved tasks, such as solving complex math problems, preparing tax forms and parking in a tight space.

Research published by MIT in 2025 shows that data visualization design choices convey social meaning and can shape levels of trust before people even check the data. For example, the MIT researchers found that highly polished data visualizations were often perceived as promotional and less trustworthy, whereas plain designs were perceived as more objective. The researchers suggested that designers must account for both cognitive processing and social meaning when creating data visualizations.

Data visualization tools and vendors

In the past, data visualization was often limited to using Microsoft Excel to convert spreadsheet data into tables and charts. ModernBI and analytics platforms, such as Looker Studio, Power BI, Qlik Sense and Tableau, and open-source visualization libraries, such as D3, Matplotlib and Plotly, have transformed data visualization. These tools connect to governed cloud data to prepare it for analysis, then deliver interactive dashboards, reports, alerts and AI-generated insights.

Many now have a variety of AI features, such as automated trend detection,natural language querying and predictive analytics driven by machine learning. Tools with generative AI capabilities, such as Tableau Pulse and Power BI Copilot, tell users what has changed in data sets and why.

BI and data visualization tools typically integrate directly with cloud data platforms, such as Google BigQuery, Snowflake, Databricks and Microsoft Fabric's OneLake. This architecture gives users a way to explore governed data in a unified environment that ensures KPI definitions are consistent across their organization.

For guidance on tool purchases, buyers can consult the vendor rankings and analysis in Gartner Magic Quadrant and Forrester Wave reports on BI platforms. Some notable vendors listed in the 2025 versions of those reports include AWS, Domo, Google, Microsoft, Oracle, Qlik, ThoughtSpot and Salesforce, which owns Tableau.

New and emerging trends in data visualization

Leaders want answers quickly, so visualization is moving from passive to active thanks to these technological advances.

• AI‑driven visualization.Tools now turn natural language queries into charts and dashboards. This shift toward on-the-fly visual creation speeds up results for business leaders who would otherwise wait for data analysts to provide answers.
• Augmented analytics. Tools automatically detect issues and trends, explaining them with quick visuals, so teams can act faster. Recent research from analysts and business schools finds that more enterprises are deploying agent‑style assistants that use governance as the guardrail to ensure answers are trustworthy.
• Real‑time streaming dashboards.Users can watch live KPIs with continuous updates rather than a daily refresh. As needed, they can click into a metric to see details and set rules, such as triggering an alert via Microsoft Teams when a threshold is crossed. This avoids the need for multiple tools and speeds response in areas such asIoT monitoring, fraud detection and logistics tracking.
• Immersive visualization. Augmented reality and virtual reality technologies help usersexplore 3D or spatial data when static charts hide key relationships, such as factory layouts and geospatial routes. AR/VR lets teams inspect data at true scale, toggle layers and capture context for design reviews and fieldwork.

Data visualization is a subset of the broader concept of data analytics. Learn the different ways in which advanced analytics tools drive business value.

Former TechTarget editors Cameron Hashemi-Pour, Kate Brush and Ed Burns also contributed to this article.