Business resilience is key to the survival and prosperity of businesses, as it enables them to confidently embrace change. Investors, analysts and customers want to be sure that your business has the capability and resilience to deal with everything from minor market fluctuations to serious disruption.
Good quality scenario planning should be part of your financial governance. And today, with challenges including climate change and pandemics, it has never been more important to make sure that your business is prepared for whatever challenges lie ahead.
So, if scenario planning is so important, why does it under-deliver so often? When we talk to CFOs, finance directors and other FP&A professionals, we find that scenario planning is often one of the most frustrating tasks:
- It takes too long
- It often uses out-of-date information
- It doesn’t give enough insight to support quality decisions
Improving your business resilience with our scenario planning process
Let’s take each of these issues one by one:
It takes too long
Good scenario planning involves inputs from across the business. This means collecting information and data from a range of departments – from stock control to sales. Particularly in complex businesses, this data is often collected in different ways: on paper, in spreadsheets or in siloed databases or software systems.
Getting the latest information from colleagues around the business and then putting it through your planning process can take days – even weeks. By that time, the moment may have passed, or conditions may have changed, so you have put in a large number of hours without a reliable result.
This follows on from the speed – or lack – of data collection. The longer you have to wait for data, the less accurate that data will be. Using old data in your plan means you may make inaccurate assumptions or forecasts. That will cast doubt on your planning in general, put a barrier between the finance department and the rest of the business and frustrate your teams, who just want to do the best job they can.
It doesn’t support quality decisions
The point of scenario planning is to deliver options to decision makers. This might be to help with business disruption planning, to investigate new markets or locations, to game economic situations or to make plans for merger or acquisition.
These are critical decisions, and yet they are often being made on the basis of poor quality or out-of-date information – and at a slow pace.
Furthermore, scenario planning that is done ‘by hand’ often reflects the assumptions or biases of the person running the task – particularly if that person has been in the business for some time. And if someone new comes to the task, they may miss critical information.
How to transform scenario planning
We can help to solve all of these problems. By centralising all the data across your business, our system ensures real-time access to accurate data. This data is instantly accessible, speeding up your process, and a dedicated scenario planning process allows you to set up standard scenarios and change data values at any time. You can also create specific scenarios to help you model new options or see how your business would manage in certain situations.
You can do this in a Board meeting, giving senior leaders immediate access to the information they need to aid good decision making. Or you can do it with your team as part of a wider forecasting and planning process.
There is a better way to manage quality scenario planning. It saves you time and money while delivering actionable insights that the business can use straight away. It boosts confidence in your finance department and puts your team at the centre of strategic business planning.
Book a discovery call today to see how we can help you transform scenario planning in your business.