Uncertainty, no matter the reason causes it, complicates the planning and budgeting at a company. Usual financial and operational models don’t work. At the same time, the number of variables that need to be considered increases.
All this leads to the fact that the company should turn business operations to scenario planning, where the final result may depend both on macroeconomic and trade parameters, or on efficiency of new equipment. Let’s revert to the practical side of the process and look how it works in companies.
Special software for scenario forecasts in business
The most convenient tool for scenario forecasting is complex business performance management software. For example, here we should mention resource planning software, financial analysis and planning (FA&P) software, sales and operations planning (S&OP) software and other types of planning and budgeting software. Such software allows users to build dependences on elements and variables and then switch between scenarios at a click. The only difficulty can be loading data from third-party sources into the system. If there are forecasts of interest and exchange rates that need to be downloaded from certain websites, an ordinary user will need the assistance of a developer to integrate this data into the system.
Scenario panning and budgeting in Excel
Sometimes a company does not require such a serious level of digital transformation. In this case, planning and budgeting activities are often limited to financial and operational models in Excel. Such spreadsheets include a number of tabs on which information (about a project, a company division or whatever) is specified granularly. Also, such Excel files attend tables with aggregated data. In such cases, the only option for scenario planning would be to create several similar files for each scenario. Otherwise, Excel simply will not handle such a wide array of data.
Hybrid solutions for business
Hybrid business solutions can help to cope with it. Spreadym combines all the functions of full-fledged business performance management software and Excel spreadsheets. The platform allows users to set scenario conditions, the change of which will affect the final result in the same file. Conditions can be changed with one click on the button on the control panel. All plans and budgets, as well as their scenarios, are stored on the server and are available at the same time to all users with the appropriate access. Watch the video to see what it looks like.