What-if Scenario Planning
Seeing around corners: Mitigating risk and preparing for uncertainty
Top executives are paid for predictability. It’s their job to identify and proactively mitigate risk—to avoid the danger before it’s a reality. Sales and operations planning (S&OP) helps executives accomplish this goal, but only if they don’t fall into the “one number” trap. Instead, planning should be done in ranges—worst case, best case and expected—all along the S&OP process. The ability to identify the risk and impact of plan deviations is priceless. As Eisenhower once said, “Plans are nothing; planning is everything.”
Scenario planning is the ability to simulate and compare various business scenario options, and orchestrate desired business outcomes. In today’s highly volatile economic environment, corporate scenario planning is more necessary than ever before. Why is this the case? Rapid changes in the consumer landscape, fluctuating commodities prices, unpredictable capital costs—even climate change—mean that executives must be prepared for every possible contingency.
In short, executives must be ready with Plan A, B and C. While it is no longer possible to predict which plan is most likely to be executed, it is possible to identify the range of possibilities and develop contingency plans accordingly by conducting “what-if” analysis and comparing multiple outcomes.
Scenario planning/“What-If” analysis capabilities:
1. Allow an organization to consider and set plans for critical uncertainties
2. Challenge assumptions by allowing executives to explore the future
3. Enable executives to have a realistic approach to forecasts, plan their business by visualizing different scenarios and planning how the company would operate under any given situation
4. Provide a plan for more than one possible realizable/desirable future
5. Provide executives with a qualitative and quantitative perspective. It allows them to anticipate future threats and opportunities and encourages strategic thinking and learning
6. Empower organizations to handle new situations as they arise and promote proactive leadership initiatives
Steelwedge takes pride in being the leading provider of software-as-a-service (SaaS) solutions to enable complex scenario planning. The Steelwedge Sales and Operations Planning (S&OP) solution is unique in its power, flexibility, and low cost.
Steelwedge provides a single view of a company’s business, leveraging reliable “what-if” scenario modeling that pinpoints the business and financial impact of supply/demand trade-off decisions. Steelwedge enables the creation, analysis, and comparison of what-if scenarios to support demand/supply balancing and S&OP, as well as the alignment of financial plans with operations and overall business strategies. Steelwedge customers are well prepared to engage on the activities that deliver maximum results, given their ability to proactively plan for the opportunities and challenges that lie ahead.
Steelwedge provides the ability to:
- Present and socialize multiple scenarios with the right stakeholders
- Adequately model the realities of the value chain and conduct what-if scenario planning and simulations
- Perform the financial impact analysis of the different scenarios identified
- Drive the plan/scenario review and approval process through process management tools