Value Driver Tree
Last updated
Last updated
When you present a visual model to define the Metrics as a function/formula of other parameters – all of which are broken down further, people understand the impact of changes to various key parameters on the overall outcome. This presentation is effective due to its tree-like visual analysis & because of the way in which formulas were defined & broken down into Individual drivers.
Value Driver Tree is a visual representation of business logic on how a set of drivers can link & build up the metrics or formulas.
Drivers are variables that Impact the the metric value, whereas the metrics are the business outcome that organizations intend to measure.
Value driver are set up with each branch to serve a purpose of defining one metric, which in turn would be used as Input to build another branch, thus building up the complete tree
Metrics/formulas are build using basic mathematical functions on drivers as well as advanced functions for complex scenarios.
Defining rules in value driver is much similar & simpler than defining formulas in Excel, but the output presentation provides transparent & clear understanding to any user with no/minimal technical understanding.
Once you understand the mathematical relationship between these drivers and Metrics, it is easier to understand how variations in one or more drivers can impact the overall outcome.
It presents the business logic flow in an user-intuitive way, like a mind map.
Performs simple or complex logic where dependent calculations are taken care of in sequence
It's easier & quicker to capture the business requirements by users with no technical help
Can handle complicated formulas with advanced functions
Can have multiple levels, meaning calculated results can form as Input for another layer of calculations & multiple levels form under part of a single value driver.
