Written by Heather L. Cole, November 4th 2021
Scenario Planning with IBM Planning Analytics
Did the Pandemic disrupt your business? Did it make you think you need to look at your business in different ways? Were you creating new Excel spreadsheets to run various scenarios and thinking there must be a better way? Well, there is! Scenario Planning with IBM Planning Analytics formally known as TM1 can be business changing!
What is Scenario Planning?
Scenario planning empowers decision-makers to identify various potential outcomes and anticipate the impacts, evaluate responses, and manage plans for all possibilities. It starts with a question, “What if ___________ happened?” Then you leverage robust models to project the financial and operational impact. You want the model to allow for the scenario to flow all the way to earnings and estimating cash flow. This will allow you to develop an action plan. Scenario planning when done right is an integrated approach to dealing with uncertainty.
Scenario planning allows team members to recognize and mitigate risks and plan for growth opportunities. It allows executives to anticipate different outcomes for the organization based on assumptions about forces that drive the market like interest rates, countries shutting down, and resource shortages
Why You Must Do Scenario Planning
I think we all can agree the world has changed! If the pandemic taught us anything it’s that we must learn to deal with uncertainty and be prepared for various situations. The only way to fully plan for uncertainty is scenario planning. Your organization’s future depends on it.
Why You Need the Right Tool
During the Pandemic many organizations scrabbled to create Excel models to do scenario planning. It is also possible to do what if modeling in Excel. But the question should not be can I do scenario planning in Excel, but should I?
For many organizations, the answer is NO! You need a robust tool designed for scenario modeling like IBM Planning Analytics (TM1).
Let’s say you move into a new house and now have a 5-acre yard and you need to mow it. You currently own a push mower. Could you cut your lawn with the push mower? Yes. But should you? My guess is it would take you at most one cutting to realize that you need a better machine for the job at hand!
Well, scenario planning is the same as your lawn. To provide rapid results and what if modeling of your business with Excel probably isn’t going to cut it. (Pun intended).
Scenario Planning with IBM Planning Analytics with Watson
At Lodestar Solutions we recommend and believe in the flexibility and power of IBM Planning Analytics for Scenario Modeling!
What is IBM Planning Analytics?
So, you may be thinking, is this a glorified Excel tool? No! It’s so much more than that because IBM has infused their Watson Technology into their Planning Analytics tool providing enhanced Predictive Forecasting. “Predictive forecasting augments human intelligence by using statistical and predictive analytics to identify and assess trends and seasonality patterns in historic values, greatly improving forecast accuracy” according to IBM’s Whitepaper you can download here.
But let’s cut to the chase. You don’t have time to waste! If you want to retain talent you MUST give them the right tools. If you want to be prepared for a rapidly changing business climate, you MUST run scenarios. So, you need the BEST TOOLS for Scenario Planning. I believe the best tool for running scenarios is IBM Planning Analytics!
Want to learn more about Scenario Planning? Email or call email@example.com, 813-425-2910 to set up a complimentary chat about scenario modeling and how you can lead transformation in your organization.
Not Ready for a Chat? Join our webinar. On November 18th, 2021 at 10:30am - Noon Eastern I will be hosting a webinar.
Mastering Transformational Planning: Why CFOs Should Lead this Initiative?
You will learn:
- Why you MUST become a transformational leader to become the Modern CFO everyone looks up to.
- How to attract the most in demand superstars that your competition wants so that you can realize transformation faster.
- Why Continuous Forecasting is the most important sought-after skill in today's uncertain world.
Attend our webinar and walk away with proven methods you can implement immediately to start your transformational journey. It all starts with a plan!