I recently went to Sydney to conduct some training programs on Advanced Excel and Power BI. While I was there, I met my good friend Danielle, who runs Plum Solutions, a financial modeling consultancy & training company. We got talking about various things and the topic eventually turned to “finance people and Power BI”. We debated whether finance professionals (analysts, reporting people, financial modelers and controllers) should bother learning Power BI or stick to Excel.
As this is an interesting topic, I am sharing my thoughts in this post along with a video of our debate at the end of it. Feel free to chip in and share your views to.
Let’s examine both sides of the argument. We start with why you need to learn Power BI and then look at why you don’t want to.
Why finance people should learn Power BI?
- Power BI is visual & easy: You can quickly take a P&L or complex model outputs and turn them in to a bunch of interactive visuals with Power BI. We all know how much decision makers and customers love visuals. So this is a huge win.
- Power BI makes it easy to share stuff: We all know about the 70Mb workbooks that calculate NPV of a project or compare few different scenarios. Unfortunately that hunk of a file can’t be emailed CFO as she is globe-trotting and can’t run array formulas on her iPhone. On the other-hand Power BI files can be shared easily. You just publish and send the link or notification to the people. They can check it out on phone / tablet / computer and interact too.
- Consolidate data with Power Query: Ok, this is not just Power BI thing. With Power Query, we can consolidate files, stitch together tables and merge different sets of data. This means, no more manual tasks or laborious lookups.
- Visual scenarios with what-if parameters: You can use what-if parameters, slicers in Power BI to make interactive scenarios. This is so much better than using either scenario manager or changing cell values in Excel.
- Work on larger sets of data easily: Excel has physical limit of 1mn rows per spreadsheet. So if you are forecasting operations of a large company, chances are you have more than a million rows and hit the limit in Excel. Power BI has no such limits, so you can happily work on larger data-sets.
- Power BI is regularly improving: Almost every month Microsoft releases a new version of Power BI. This is good for people who are building things as you have new capabilities to rely on and improve user experiences.
Why finance people don’t need to learn Power BI?
- Power BI is not Excel: This is the big one. You can’t create everything you do in Excel with Power BI. Many things that finance people do in Excel like making statutory statements (balance sheets, P&L etc.) or creating scenarios or running monte-carlo simulations on forecasts are ridiculously hard to reproduce in Power BI. Power BI good for visuals, but all the heavy lifting must be done in Excel.
- Power BI doesn’t yet have many basic finance functions: Simple things like calculating NPV or Future value of a cash flow become a laborious mathematical exercise in Power BI. This is because the calculation engine of Power BI – Power Pivot, yet doesn’t have many finance functions.
- Power BI is very technical: Most finance people would learn how to work on finance & accounts in Excel. So Excel becomes a second language for them. But Power BI is not an extension of Excel. It is a deeply technical and complex software. So to get most of out it, finance people need to pick up technical skills like DAX, M and data modeling.
- Power BI is regularly changing: Let’s admit it. Nobody like change. As Power BI rolls out new version every month, you will be forced to stay on top to feel at home. New features come, screens change, buttons move around and options add every month. Knowing all this and keeping up can be hard.
My take – Learn Power BI anyway
I think Power BI is a valuable skill to acquire nevertheless. The reasons:
- Reuse the skills in Excel: Core components of Power BI – Power Query & Power Pivot can be used in Excel too.
- Learning new things is fun: Just as squats make your legs fit, learning new things keeps your brain fit.
- Power BI can open new doors for you: With each new skill you acquire, you will find new opportunities. It can help you find that exciting job or start a business.
- Power BI is free: Power BI Desktop software is free to download and install. There is heaps of free tutorials, examples and videos online (including on chandoo.org) to help you learn it. Even Excel is not free. So why not give it a try.
- Data skills are hot: Skills like how databases work, how to analyze data and how to tell stories thru visuals are very hot now. Power BI (and Excel too) makes it very easy to practice these skills.
Watch the debate with Danielle
I recorded a video with Danielle where we debated pros & cons of Power BI for finance people. Watch it below or see it on my YouTube channel.
What is your take on this?
Do you work in finance? What are your thoughts about Power BI? Share them below using comments. I want to hear what you think.
Want to learn Power BI? See these tutorials & articles
If the jargon of Power BI world is spinning your head, start with this simple explanation of what is Power BI.
For more examples and tutorials, check out the Power BI category on Chandoo.org or see this epic introduction video.
18 Responses to “Best Charts to Compare Actual Values with Targets – What is your take?”
Great post. I can't vote, though, because the answer I want to put down is "it depends". As with all visualisations, you've got to take into account your audience, your purpose, technical skills, where it will be viewed, etc.
I'm with Andy: It depends. Some I would use, some I might use, some I won't touch with a barge pole.
Naturally I have comments 🙂
The dial gauge, though familiar, is less easy to read than a linear type of chart (thermometer or bullet). It's really no better than the traffic lights, because all it can really tell you is which category the point falls in: red, yellow, or green.
By the same token, pie charts are so familiar, people don't know they can't read them. Remember how long it takes kids to learn to read an analog clock?
Bullet charts don't show trends.
With any of the charts that have a filled component and a marker or ine component, it makes more sense to use the filled component (area/ column) for target, and the lines or markers for actual.
[...] Best Charts to Compare Actual values with Targets (or Budgets … [...]
I voted for #6 even though I agree with the other comments that it depends.
The majority of the votes are for the #2, thermometer chart. I still have yet to understand what happens when you are above plan/goal, which was brought up in yesterday's post.
Also, I agree with Jon in that it would be better to flip the series and make the filled part the target or goal and the line or marker the actual.
I am also a fan of using text when appropriate if the data is among other metrics in a type of dashboard. Calling it out by saying actual and % achievement is a good option.
Another "it depends" vote. Are you just looking at one or are you comparing a number of targets with actuals? You didn't include a text box. The problem with sentences is that they can get lost in a page of gray text. A text box can call attention to the numbers and line them up effectively.
I'm with Jon: "Some I would use, some I might use, some I won’t touch with a barge pole" and I'm surprised that some of your readers voted for the last group.
Jon says:
With any of the charts that have a filled component and a marker or line component, it makes more sense to use the filled component (area/ column) for target, and the lines or markers for actual.
Why does this make more sense? I like 6 the way it is, although I would use a heavy dash for the plan/target marker.
"It depends" is also my take. What I usually try to drill into my clients dashboard design is the fu ndamental difference between spot results (am I on target for this month) and long term trends.. I always try to create 3 different set of graphs to represent real perormance:
- spot results vs objectives
- cumulative results vs objectives
- long-term trend (moving average) mostly) to see where we're going
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Jon says:
With any of the charts that have a filled component and a marker or line component, it makes more sense to use the filled component (area/ column) for target, and the lines or markers for actual.
Why does this make more sense? I like 6 the way it is, although I would use a heavy dash for the plan/target marker.
I totally agree, Bob. I would normally favour a line for the target and a column for the actual, you can see quite easily then which columns break through the line, then.
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Thermometer charts: "Not appropriate when actual values exceed targets" - this is easily solved by making the "mercury" portion a different color from the border, then you can clearly see where the expected range ends and the actual values keep going.
People seem to knock gauges quite a bit in dashboarding, but trying to show comparison of realtime data between operating sites and targets for each site can easily be done with a bank of gauges that have the optimal operating points at 12 o'clock.
The human eye is great at pattern stripping, and any deviation of a gauge from the expected 12 position will quickly register with an operator and attract his attention. Using a colour background, or meter edge, will also indicate the sensitivity of a particular site.
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I am wondering how will the plotting work, for some of the targets which may have been achieved before time. E.g. for the month of Jul the target was 226 and the actual was 219. So the chart will show a deficit in meeting the target by 7 points but what if this 7 may have been completed earlier in month of June. So ideally it not a deficit.