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Slicing the pie

Slicing the pie

The amount of financial and quantitative data points in a company can be overwhelming for managers, especially considering an organization’s multi-dimensional and abstract nature and complex information structure. The capability to “slice the pie” — in other words, to visualize business finances, FTE, and other elements — allows global corporations to better understand their value chains. Such visualization provides a bigger picture of a company’s international operations, and with the right input of just a handful of data, it provides crucial insights into value chains, outliers, and trends.
This practical and quantitative approach can allow you to understand how the company:

  1. Operates on a global scale
  2. Utilizes the functions of employees (FTEs)
  3. Allocates its intangible assets
  4. Allocates profit margins within an MNE

The illustration below demonstrates 3 basic visualizations of an MNE’s Gross Margin, Operating Margin, and Full Time Employees across different locations. Slicing the pie based on these data points can provide important insights. For example, we can see that the gross margins of the UK and the Netherlands are almost equal, 31 and 33 percent respectively, while operating margins and FTEs vary significantly. In this way, we could conclude that employees working in the Netherlands are highly productive and create high value. On the other hand, the operating profit in the Netherlands of 60 percent becomes a gross margin of 33 percent, which could suggest that Dutch employment processes hinder created value as opposed to the value creation generated by UK employees.