Simulating with Value Driver Trees

Objectives

After completing this lesson, you will be able to:

  • Simulate and forecast with value driver trees

Value Driver Trees

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

Why Use Value Driver Trees?

Value driver trees use story calculations and dimensions formulas to help visualize:

  • Graphical planning simulations
  • Entire value chains
  • KPI relationships
  • Driver-based planning
  • Anytime granularity

You use value driver trees to take a driver-based approach to planning, where you identify key driver values and models their impact on top-level metrics.

Example of value driver trees in SAP Analytics Cloud, populated with sample data.

Drivers

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.

Value driver trees also show hierarchical links between different values, and how the values are interconnected. For example, if you increase marketing expenses, 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.

Key Points

VDTs are available for planning models and analytic models only. They aren't available for live models.

Value driver trees can be built based on formulas in the account dimension.

Value driver trees can be based on account dimension hierarchies or member formulas.

Formulas in the account dimension and the resulting value driver tree.

Value Driver Tree Features

You can use a value driver tree (VDT) to visualize how values flow through your model and to help you make strategic planning decisions and simulate different scenarios.

When you're finished building your value driver tree in your story, you can save and view it, share it with other users, or add it to a Digital Boardroom presentation.

Create a Value Driver Tree Based on an Account Hierarchy

Follow these steps to create a value driver tree based on an account hierarchy:

  1. Add the value driver tree to a story.
  2. Select the source planning model.
  3. Auto-create the value driver tree.
  4. Pick a hierarchy node.
  5. Choose OK.
Value Driver Tree Featured from a Hierarchy

Just remember that value drivers trees can't be used in other value drivers trees.

Note
Both planning and BI customers can create value driver trees and enter data in them, however, only customers with planning licenses can publish changes to a version.

Value Driver Tree Time Granularity

Set Date Range for Date dialog.

Date filters: The value driver tree uses a presentation date dimension to set the periods that display in each node. By default, it's the planning date dimension. You can only change its filter for the entire value driver tree, not for individual nodes.

The filter is optional, but you'll usually want to include it. It filters the values for each node, and it determines the time granularity and which periods are displayed for each node unless you specify a Presentation Date Range too.

Default Node

The Default Node is used to provide calculations and filters to all nodes in the Value Driver Tree. You can add your own calculated and restricted measures.

Settings are available for individual nodes, as well as the default node configuration that applies to all nodes. If you're adding nodes manually, start with the default node configuration, and then add nodes and change their settings as needed.

Builder panel on the right showing the default node configuration on the left.
Note
  • Calculated and restricted measures are maintained in the Cross Calculation area.
  • The date dimension can't be filtered in individual nodes.

Node-Specific Formula

You can also create node-specific calculations in your Value Driver Tree.

You can display the same cross calculations in all nodes, or change individual nodes. For example, all nodes show measure values, but the top-level node that shows both measure values and delta values.

Builder panel on the right showing the delta values in the node on the left.

Linking Nodes

Nodes in value driver trees maintain their relationships based on the underlying account formulas. Based on the underlying formulas, you can display parent and child nodes for any specific node.

Builder panel showing the Relationship section where you can link nodes.

There are two ways to add and set up nodes: manually or automatically based on the account hierarchy and calculation structure in the model.

Use Driver Value Trees to Simulate Scenarios

To quickly simulate different scenarios and see how individual value changes affect the overall scenario, you can enter data directly in a value driver tree based on a planning model.

A keypad lets you enter a new value, or change the existing value using a slider or a mathematical function. The new value is entered to the model, and the rest of the nodes update to show the effects of your change. Values can be typed in as well, without using the number pad.

At any point, you can undo or redo data changes by opening the Version Management panel from the task bar at the top of the screen.

Multiple Versions

Nodes in value driver trees can display multiple versions. Also, the nodes can display versions based on input controls.

If needed, you can display the same KPI in multiple nodes but with a different data region such as version.

Multiple Versions

Display Multiple Currencies

In the example below, you can see the underlying model has currency translation enabled with USD set as the model currency. The entity dimension determines the local currency in the node filter.

Multiple Currencies in the node on the left and the builder pane on the right.
Note
Currently, the new model doesn't support value driver trees.

Create and Configure a Value Driver Tree

Task 1: Create a Value Driver Tree

Business Scenario

You are working on a four-year projection of the income statement.

You need a way to visualize the impact on net sales when drivers such as growth rates change.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Add a value driver tree to a story
  • Use the auto-create functionality to create the value driver tree from the selected model
  • Configure the default node time granularity and filter
  • Input and publish new planning data

Task 2: Add Cross Calculations to the Default Node

Business Scenario

You have added a value driver tree to your story and now you want to create a cross calculation to restrict account values by version.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Use the Calculation Editor to configure a restricted account
  • Add an input control to the story to dynamically select version for the restricted account

Task 3: Add Nodes to a Value Driver Tree

Business Scenario

You want to add additional nodes to the value driver tree that was previously created in order to evaluate Net Sales, Discounts, and Discount percentage.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Add nodes to the value driver tree
  • simulate the effect of various discounts on the projection
  • Publish the data for the Scenario and Forecast versions

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