Creating a Value Driver Tree (VDT) with SAP Analytics Cloud

Modern analytics are way more than just inights on a given situation. They are about using those insights to create and tune business planning models. They are also about using insights to combine them into simulations: what would happen if I change this "key influencer" or "that metric". These simulations - or What-If Analyses - are a simple necessity to modern analytics, if you'd ask me.

In SAP Analytics Cloud they have answered to this need in various ways:

  1. a formula based slider (more in a next blog): basically this is an input control in SAP Analytics Cloud that is driven by a formula and an input driving it. This input cvan either be an existing dimension or a list of values. The input is a parameter part of the formula, where the formula calculates the out put. An example is an input list going from -15% to +15 where that is made part of a formula to calculate the effect on margin: ((rev*[input])-cost/cost) to calculate what an increase/decrease on revenue would implicate to the margin.

  2. the Value Driver Tree (VDT) is amore advanced feature that leverages the interdependancies of metrics onto a driver for final output.

Value Driver Tree

The Value Driver Tree is a physical representation of interdependancies in measures that is used to generate a simulated effect of changing an underlying measure onto it parent. SAC allows for slider inputs to change metrics and recalculates the whole model on its outcome. Very, very powerful and extremeluy helpful for simulation and planning purposes.

Key to the Value Driver Tree is the correctness of the underlying SAC Model. First this model needs to be a planning model. Next the model should have defined hierrachies in its accounts (metrics). Below video shows you step by step how to create a VDT in a very simple - semi-automated - way.

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