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How to Use Bar Charts in Your KPI Dashboard
The bar chart is the most commonly used method for the visual representation of data and key performance indicators (KPIs) in the business world. Bar charts are as commonplace as they are easy to create and interpret.
How Bar Charts Work
Bar charts group data into bars with lengths proportional to their value. The value being compared could be a number, frequency or any other form of measurement.
In a typical bar graph, the X axis represents the groups that are being compared, while the Y axis represents their values.
These types of charts are very useful for illustrating KPIs as a user can understand the values very quickly — a single glance is usually all that is needed. For a real world example of the kinds of data which are appropriate for bar charts, Google Analytics use them for the KPI tracking of:
• Visitor acquisition (Organic search, Direct, Referral or Social) and bounce rate
• Age demographics (18-24, 25-34, 35-44, 45-54, 55-64, 66+)
• Audience Overview — Language
Typically, bar charts are used to display simple groupings of data where direct comparison between the values is necessary. A typical user wants to see where their website visitors came from at a glance and a bar chart makes it easy to understand this essential KPI.
In technical terms, a bar chart is useful for comparing nominal categories (a group of objects that share a characteristic). That might be population size in specific countries, the source of website visitors or which advertising mechanism brought in a sale.
Avoid using a bar graph when comparing objects that have vastly different characteristics.
Bar charts can also be flexible, accommodating more advanced forms of data while remaining easy to interpret. Other forms of bar charts include:
Horizontal Bar Charts
Normally bar charts are drawn with categories along the X and values on the Y. The horizontal chart reverses the axis so the longer the bar is (horizontally), the more value it has. It is often used when displaying categories of data that have long names, because it is easier to format and understand the text.
Grouped bar charts
Grouped bar charts be used to contrast sub-groups inside the major groups. For example, you are comparing a KPI like sources of revenue from different stores. Each store might have three ways they sell products — online, in-store and by postal order. A grouped bar chart could display each store with three separate bars that represent their sales methods.
Usually bars of different colours and a legend will be required so the user can quickly understand the different types of values in the KPI being measured. Care needs to be taken to avoid information overload — too many bars and the information is no longer conveyed succinctly. Overuse of grouped bar charts can make interpretation time-consuming and should be avoided in such situations.
Stacked bar charts
Stacked bar charts are similar to grouped bar charts. However, instead of using multiple bars to represent sub-groups, they incorporate different colours in a single bar to represent each sub-group. This allows the viewer to easily compare the overall values of each group and the sub-groups within each group.
Tips for Using Bar Charts
While bar charts are very simple to construct and understand, there are a few ways to increase their usefulness when you are presenting valuable information like KPIs.
Use comparison lines
If you have a number of values being compared, it is often useful to include lines that represent the average or mean value. So if you are comparing sales values between stores, you can easily see which stores are above average.
Use grouped bar charts more often
As long as there aren’t too many categories, grouped bar charts remain easy to understand and convey a lot of information
Use bar charts as drilldowns
Bar charts can be very useful for providing more information from within another chart. If you had a pie chart displaying a KPI like sales, hovering your mouse over a segment could bring up a bar chart which displays how the sales occurred. Most modern KPI Management Software offers the ability to represent data in this way.
Ensure that sub-groups tell something relevant
When using grouped or stacked bar charts, always make sure the sub-groups are relevant to the main groups. Having unrelated data can be distracting or useless for the viewer.
Use colours in creative ways
Colours are very useful for representing subgroups in stacked bar charts, but they can also be used to represent KPI performance. You can highlight the higher performing categories in different colours and graduate the colours for each bar.
Bar charts can be used in conjunction with visual representations like maps to create a very intuitive and useful experience. Many KPI tracking software packages now allow users to combine different graphs and make data easier to visualise.