on target

Treemapping your business

Treemapping is a form of visualization. A treemap uses nested rectangles to displays hierarchic data in an intuitive diagram. Look at the following treemap that shows how computer disk space is used:

Each rectangle represents a file or a folder. Its area is proportional to used space and its color represents its aging. This kind of visualization let you quickly identify large and possibly unused files and where they are located.

But … what about business? Here is a treemap, produced on the fly by PISA, to analyze profitability of a grocery chain. The size of rectangles is proportional to amount sold of each product, their color represents their profitability as shown in bottom legend):

You can immediately spot that Supplies profitability is quite better than food and frozen foods (that represents about 30% sales) have the lowest performance.

You could have used a classical combined chart to visualize the same information:

but obviously is is not so expressive as a treemap! Treemaps are also usually interactive: you can drill-down with a mouse click or park mouse pointer over a rectangle to have detailed information of its content and values.

In summary a treemap:

• Uses nesting to display hierarchy of aggregates, business or organizations of independent variable X associated with two dependent variables.

• First dependent variable is represented by rectangle size and usually shows the importance or impact of X.

• Second dependent variable generally uses rectangle color to represent a critical measure also associated with X.

• Since you immediately spot critical situations (rectangle color), their impact (rectangle size) and location (nesting) treemaps are an exceptional visualization technique for managers.

Now that you know what a treemap is, here is short list of its possible usages, just to cite a few:

• E-commerce: geographic region x sales x sales frequency

• Department store: products (by category) x sales x turnover

• Financial institutions: debtors (by branch office) x due amount x risk

• Human resources: department x payroll total x relative compensation (average over/under market)

• Accounting: Cost center x budget x compliance (actual / budget)

• Quality: Product x production volume x defect rate

• Production: Product x production volume x delay

Certain business intelligence tools and analytic applications, like PISA, already provide treemapping capabilities. Alternatively a free on-line application is available here (requires data in XML format).

Interested in partnership?

Would like to try or coach this technique with your clients, do you need any additional or technical detail? Please let me know! Component Bases Solutions has great interest in partnership with consultants. We can help you automate your proposed solutions in a very short time. We can also help to increase your visibility through links from many management tools we make freely available on the Web. Please contact for more detail.

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Posted at 12:00AM Sep 24, 2009 by admin in General  |