Value Driver Trees

Use a value driver tree (VDT) to visualize the entire value chain of your business, instead of looking at isolated KPIs.

When to use a value driver tree

You may want to take a driver-based approach to planning, where you identify key driver values and model their impacts on top-level metrics.

The drivers are usually figures that you can influence directly, like product prices, headcount, or travel expenses. They could also be external factors such as tax rates or raw material costs. Say you’ve modeled how these factors will impact the value of your business, for example, net revenue, gross margin, and total expenses.

In this case, you’ll need to see how value flows through your model. Like a table, a value driver tree shows numeric values, and supports data entry so that you can adjust the plan. However, it also shows hierarchical links between different values, and how the values are interconnected.

For example, if you increase marketing expenditures, you’ll expect your overhead costs and your sales volume to increase. In turn, you’ll see an increase in your sales revenue, and the cost of goods sold. A value driver tree lets you visualize these different links and see how your changes affect the bottom line.

How value driver trees work

Value driver trees let you pick which account and cross calculations to display in each node, and how to filter the node. Then, you can link nodes together to form a directed graph. You can also quickly expand or collapse different groups of nodes. This way, you get a streamlined look at the most important values, without any distractions.

Value driver trees are set up to compare values across time periods that you specify, so they can help with long term strategic planning, or focusing in on a forecast.

You also perform data entry by keypad, so value driver trees work well with touchscreen-based Digital Boardroom presentations.

Note

Previously, you created value driver trees in a separate designer outside of the story area (Start of the navigation path Next navigation step  Create Next navigation step Process Next navigation step  Value Driver TreeEnd of the navigation path). You can still edit and display these legacy value driver trees. However, if you’re creating a new value driver tree we recommend building it in the story page instead. For details about legacy value driver trees, see Creating a Legacy Value Driver Tree.