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Data-driven storytelling opens analytics to all

Data storytelling, because it interprets and explains data, extends business intelligence to business users and not just those trained in data analysis.

Data-driven storytelling has the potential to revolutionize analytics.

One of the great challenges of analytics has been making it accessible to more than just the trained experts within an organization, the data analysts who understand how to interpret data and use it to make informed decisions.

And just as visualizations helped make data more digestible a decade or so ago and augmented intelligence is making analytics platforms easier for untrained users to navigate, data-driven storytelling can put business intelligence in the hands of a wider audience.

But unlike data visualizations and AI, technologies that only marginally extend the reach of analytics, data-driven storytelling can have a wider impact in enterprises.

Data storytelling, simply, is an automatically generated explanation of data. It's the story of the data under analysis, that interpretation that if left to someone without an expertise in data analysis can be dangerous. It's that story put in a narrative form rather than just straight analysis of the data.

"Data storytelling is what you say when you're actually trying to understand what's happening in the data and make a decision off of it," said Nate Nichols, chief scientist at Narrative Science, a data storytelling software vendor.

For example, Nichols continued, if someone comes home and sees a spilled glass of water on the kitchen counter and the wet footprint of a cat leading away from the water, they have a data set.

"That's what you get from a spreadsheet or a dashboard," Nichols said. "But you don't make a decision based off of that. You develop an interpretation of what happened, you tell a story -- the cat came in, tried to drink, knocked over the water and ran out. It's the story that helps you make the decision about how to keep the cat away in the future."

In a business sense, data-driven storytelling, for example, can be the explanation of sales figures in a report or dashboard.

Rather than just present the numbers and leave the interpretation up to the user, data storytelling platforms break it down and put into a written narrative that total sales in a given week were $15 million, which was up 10% over the week before and up 20% over the weekly average. Meanwhile, the sales figures include 100 deals with a certain employee leading the way with eight, and the overall increase can be attributed to seasonal factors.

A Narrative Science data story about the sales figures highlights the most relevant numbers in bold, creates a simple bar graph, and situates a block graphic below a bold headline over the narrative. A traditional spreadsheet would leave it to the user to interpret the same information presented in rows of numbers.

An organization's sales information is described in a sample data story from Narrative Science.
A sample data story from Narrative Science describes an organization's sales bookings.

And while data-driven storytelling has the potential to open up analytical analysis to the masses, it isn't merely for the benefit of those untrained in the language of data. Even those with backgrounds in data science can struggle to find the meaning within data that can lead to action.

"As a trained analyst myself, data was always a means to an end," said Lyndsee Manna, senior vice president of business development at Arria NLG, a natural language generation vendor. "But I, as a human, had to wrestle to extract something that was meaningful and could communicate to another human. The shift to data storytelling is that I don't have to wrestle with the data anymore. The data is going to tell me. It's knowledge automation."

The psychology

Human beings understand stories.

From the earliest cave dwellers telling stories with pictures through the present day, people have used stories to convey information and give it context. Analytics, however, has largely lacked that storytelling aspect, missed out on the power a story can have. Even data visualizations don't tell stories. They present data in an easily understandable format -- charts, graphs -- and in artful ways, but they usually don't give the data meaning in a richer context.

We've finally got a technology that actually can genuinely reach everyone in some way.
Donald FarmerPrincipal, TreeHive Strategy

And that leaves countless business users out of the analytics process.

Data storytelling changes that.

"It gives information context, it gives it purpose, and makes it more memorable and understandable," said Donald Farmer, principal at TreeHive Strategy. "For that reason it's very fundamental psychologically. Storytelling is essential. In a sense, data storytelling is nothing new because whenever we exchange data we do it with implicit stories. But data storytelling as a practice is emerging."

Similarly, Sharon Daniels, CEO of Arria NLG, said data-driven storytelling could revolutionize analytics because of the way humans react to narratives.

"If you follow how we evolved as human beings we started in caves with drawings and communicating with visuals, and then language came about and opened up our world, and the technology world is mirroring that," she said. "It's a very interesting thing to see the storytelling parallels. The language component and the storytelling is universal."

Meanwhile, because of the way people use storytelling to give meaning to information -- and because of the technology now being developed by data storytelling vendors that automatically generates a story to accompany data -- anyone in an organization can use data to inform decision-making..

According to Dave Menninger, research director of data and analytics research at Ventana Research, only between 20% and 40% of employees within most organizations use analytics in their jobs.

"Data-driven storytelling can expand the reach of analytics. The promise of storytelling is that we've been stuck at this level -- pick a number -- of penetration of BI into an organization, and we have the opportunity to achieve close to 100% with data storytelling," Menninger said.

In an informal sense, data-driven storytelling already permeates entire organizations. When a CEO speaks about earnings, for example, they start with hard numbers and then contextualize those numbers with a story. New technology, however, can extend the reach of analytics in a more structured way.

"What's happening now is these specific technologies that are being developed to support data storytelling are coming out, and they will [eventually] reach 100% of the organization," Farmer said. "That's why it's exciting in a technology sense. We've finally got a technology that actually can genuinely reach everyone in some way."

The technology

Analytics platforms largely focus on every aspect of the analytics process leading up to interpretation. They're about preparing the data for analysis rather than the analysis itself.

Vendors such as Alteryx and Teradata specialize in data management, loading the data and structuring it. Others such as Tableau and Qlik are specialists in the business intelligence layer, the presentation of the data for analysis. And still others, including software giants IBM and Oracle, enable each aspect of the analytics process.

Now, a crop of vendors has emerged that specialize in data-driven storytelling, taking that data that's gone through the entire pipeline and giving it meaning.

Narrative Science, though founded only 10 years ago, is one of the veterans. Arria NLG, which offers a suite of natural language generation tools in addition to its data storytelling capabilities, is another that's been around for a while, having been founded in 2009. And now startups like Paris-based Toucan Toco are emerging as data storytelling gains momentum.

Meanwhile, longstanding BI vendors are also starting to offer data storytelling tools. Tableau introduced Explain Data in 2019, and Yellowfin developed Yellowfin Stories in 2018.

"Everyone wants everyone to be able to make data-driven decisions and not have to have an analytical background or have their own analysts," Nichols said. "But for people that aren't analysts and that are just trying to understand the story and use that to guide their decision-making, that last mile is the hurdle."

According to Nichols, Narrative Science's data stories are generally short and to the point, often only a paragraph or two, though they have the potential to be longer.

Arria NLG's stories can similarly be of varying length, depending on the wants of the user.

"Whether you know about data and excel at BI or whether you don't, data can feel very overwhelming," Manna said. "The biggest thing [data storytelling] gives to humanity is to lift that feeling of being overwhelmed and give them something -- in language -- they can comprehend quickly. The gift is understanding something that either would have taken a very long time or never to understand."

One thing data stories are not, however, are push notifications.

Data stories are generally the final phase of the analytics process rather than embedded throughout. When BI vendors offer their own data-driven storytelling tools, they generally provide the opportunity to embed stories at points along the data pipeline, but that can be tricky, according to Farmer. If the tools are introduced too early in the process, they can influence the outcome rather than interpret the outcome.

"You have to be very careful with data storytelling," Farmer said. "For me, data storytelling has to be focused on a single subject."

In addition, he said, it's important to understand that data storytelling doesn't completely replace analysis. The stories produced by data storytelling platforms are linear, and the real world is far more meandering.

The future

Unlike most new technologies that start off in rudimentary forms and develop over long periods of time, data storytelling platforms already deliver on the promise of providing narratives that contextualize data and help the decision-making process.

However, they have the potential to do more.

Data-driven storytelling platforms don't yet know their users. They can analyze data and craft a narrative based on it, but they don't yet have the machine learning capabilities that will lead to personalized narratives.

"It really should be personalized explanation of the analysis and personalized instructions on what to do based on the observations," Menninger said. "Many vendors are at the point of explaining, and those explanations may be somewhat personalized for the region or product you're responsible for, but few vendors have gotten to the point where they're offering instructions."

He added that with machine learning, the tools eventually will recognize that a person might look at a certain monthly report or dashboard and then follow up by doing the same thing each time. But people with similar roles within the organization might do something different after they look at that same report or dashboard, so the software will recommend that perhaps the first person ought to be doing something different after looking at the data.

Daniels, likewise, said personalization is an important part of the future of data-driven storytelling.

"I would say the ultimate data storytelling would be hyperpersonalized, predictive analytics that is telling me not only what happened and trends but is also telling me what to look out for and what could happen in the future," she said. "It's bringing more predictive analytics into the data storytelling, and we're not far off from that."

Beyond personalization, data storytelling platforms will likely evolve to be more proactive, according to Nichols.

Now, the platforms require users to open their reports and dashboards and request the narrative.

"Part of data storytelling is understanding when a story needs to be told," Nichols said. "And when I think of a perfect vision for data storytelling, it's the system being proactive. It's telling you when there's a story you need to hear."

And the same is true conversely, he added, when there's nothing new of note and there's no reason to generate a new story.

No matter what the future holds, however, data-driven storytelling tools will always be about extending the reach of analytics to a broader audience, and for the first time, potentially everyone.

"I believe it's going to change the world completely," Manna said.

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