I wanted to share with you a powerful method to visualize the impacts of the different inputs (for example, revenue, costs…) on the final output (for example margin, ROI…).
- identify where the biggest constraints are in an organisation’s ability to create value.
- be used in conjunction with sensitivity analysis to show which areas are at greatest risk for failing to deliver value.
- value a range of different investment options to find the optimal combination for creating value.
- provide transparency at the individual employee level to see how they contribute to the creation of value.
- allow you to benchmark operations that were previously too different to compare through traditional benchmarking methodologies.
Some Software provide a tool to create a dynamic visualization of the VDT of a company. Here is an example from SAP :
And here is a concrete example with a comparison between 2 different scenarios:
If you want to know more, consult the deep dive from Reuben Kearney: