- Planning for Uncertainty
- Best Practices
- First Steps
Planning For Uncertainty
As the Covid-19 pandemic has demonstrated outlier situation lack historical data for creating accurate long term plans and accurate forecasting. However, the pandemic also demonstrate the importance of continuous data collection to stay agile, make short term plans and prepare to accelerate out of the economic uncertainty.
Economic uncertainty caused by the pandemic makes short term scenario plans of 1, 3, 6 month plans more important. Adjusting to frequent short term data that allows finance to examine potential impacts with more accuracy.
Perform a top down strategic analysis. Ensure the right people are brought into the fold decision making and data collection.
Perform a top down strategic analysis. Ensure the right people are brought into the fold for decision making and data collection.
Collect and Analyze Data
Collecting qualitive and quantitive data to develop key assumpstion is essential for scenario planning. A best practice is to compare findings with macroeconomic data from the past.
Limit Scenario Planning
Limiting scenario planning may sound counter intuitive, however by focusing on key drivers you can achieve more comprehensive scenario plans. Begin with a broad number of scenarios and narrow your set with key drivers to run comprehensive analysises. As you build more data into your plans, plans will be more comprehensive.
Make sure you have the technology to support your business needs. The technology should be scalable, quick and accurate, allow for multiple and complex scenarios. Oracle and NetSuite offer excellent software. Check this article for a quick comparison Oracle EPBCS and NetSuite NSPB
Use prebuilt simulation for scenario planning. These pre built simulators allow you to quickly create a range of scenarios with success probability solutions.
Create a game plan to continuous monitor and make adjustments. As your business acquires more data your scenario planning should keep pace.