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The ultimate guide to scenario planning

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Move from spreadsheet chaos to a streamlined approach

Excel spreadsheets are useful for getting results with simple formulas, but they aren’t designed to handle large data volumes and complex scenarios. These limitations become even more apparent as business models change and market dynamics shift. As a result, finance teams often become overwhelmed and burned out as they strive to meet tight deadlines with the tools available to them. At the same time, the use of predictive planning technology is skyrocketing: one in four organizations already use predictive algorithms and machine learning productively to produce their plans and forecasts in less time and with more accurate results, according to BARC research.1

One thing is clear: a more efficient scenario planning process can uncover advantages for finance teams and their organizations. Any team can elevate their process based on their unique needs – whether they’re seeking a step up from Excel or exploring artificial intelligence (AI) and predictive planning.

Overcoming scenario planning roadblocks

Scenario planning is an intricate process, requiring significant effort to create comparisons between several assumptions and scenarios. As finance teams endeavor to plan for multiple futures and meet tight deadlines, they often encounter disruptive obstacles that prevent them from achieving their goals. Overcoming these roadblocks is key to boosting efficiency and delivering accurate results:

Simulating just one scenario often means duplicating dozens of spreadsheets. By the time the process is complete, the information is out of date.

Solution: Automated scenario modeling

Automating repetitive tasks means reacting to changes quickly, as well as more time for strategic business partnering and preparing plans for each scenario.

Coordinating input and validation from stakeholders contributes to delays. Teams struggle to efficiently gather critical data and insights.

Solution: Streamlined collaboration

Using a shared platform enables stakeholders with diverse expertise to collaborate seamlessly and provide feedback in real time.

Obtaining existing KPIs is laborious, and accounting for internal and external drivers adds another layer of difficulty. Without relevant data and insights, decision-making becomes compromised.

Solution: Access to all the data that matters

Seamless data integration from various sources enables holistic planning. View relevant KPIs and make confident decisions based on real-time, accurate information.

Granular scenarios are essential for integrated financial planning, but this increases the number of potential outcomes exponentially, making the process even more complex.

Solution: Multiple granular scenarios

Creating more scenarios faster enables finance teams to generate highly detailed scenarios and equip decision-makers with rich insights.

Elevate scenario planning in Excel

Many teams invest in financial planning software to unify data within a central platform. However, not all solutions offer scenario planning benefits. Finance teams can streamline their scenario planning process with the Jedox Add-in for Excel 365, a user-friendly tool that integrates Jedox functionality into Excel. This enables finance teams to produce more scenarios faster and:

  • 1

    Create unlimited scenarios to explore various possibilities

  • 2

    Conduct driver analysis to uncover key drivers

  • 3

    Compare P&L summaries based on scenarios

  • 4

    Communicate clear insights with visual charts and dashboards

  • 5

    Automate data collection for continuous, detailed planning

  • 6

    Easily create comparisons with built-in analytics

Schedule a demo to explore the possibilities

Uncover the potential of AI

Machine learning, predictive forecasting, and other AI tools enhance traditional scenario planning methods, providing deeper insights into drivers of KPIs to build data-driven plans. Cloud-based planning tools, such as Jedox, make it easier to factor in external drivers, illuminate trends and opportunities, and compare multiple scenarios.

Combined with human expertise, these tools can help uncover trends and patterns that would otherwise go unnoticed. For example, finance teams could more accurately predict regional demand to lower inventory and free up working capital. Keep in mind that data quality determines the effectiveness of AI-powered forecasts. Finance professionals must ensure that all relevant data and commentary are included to enrich forecasts and deliver accurate plans.

Five steps to driver-based forecasting

AI empowers teams to deliver accurate planning, budgeting, and forecasting outcomes. Jedox AIssisted™ Planning meets finance teams where they are and adapts to their needs. The tool delivers driver-based forecasts that predict what-if scenarios, opening up more time to focus on strategy. Use these five steps to progress to AI-powered planning:

1. Data preparation. The first step involves identifying outliers and excluding them from predictions. Jedox handles the data-cleaning process to ensure accurate forecasting.

2. Traditional forecasts. Perform traditional forecasting based on all the data that matters. Create annual, quarterly, or monthly forecasts based on actuals to date and budget write-forwards.

3. Rolling forecasts. Automate forecasting so actuals are transferred to forecast figures on a rolling basis. Easily set the frequency and deliver forecasts based on a specific time frame.

4. Time series forecasts. Link seasonal, monthly, and other time-based trends to forecasts with the AIssisted™ Time Series Prediction wizard. Automatically detect patterns, ensuring reliable forecasts.

5. Driver-based forecasts. Link inflation, weather, and other key drivers to forecasts with the AIssisted™ Driver-Based Prediction wizard and determine which have the greatest impact.

Plan confidently for the future

Jedox simplifies budgeting, planning, and forecasting across the organization to enable faster, more data-driven decisions. The Jedox Add-in for Excel 365 is a simple way to instantly streamline scenario planning with Jedox while still working in a familiar Excel environment. Finance teams can also leverage Jedox AIssisted™ Planning to gain the meaningful insights they need to plan and forecast intelligently, including:

Revenue forecasting

Analyze large datasets and identify drivers with the greatest impact on the business. Evaluate and compare forecasts based on the team’s confidence in the model, and recognize risks and opportunities for different regions, products, or customers. Get transparent results with best-case and worst-case scenarios.

Demand planning

Understand drivers of the business to optimize resource allocation to meet demand. Leverage historical data and train machine learning algorithms to unique business needs. Augment internal data with third-party datasets to refine predictions based on commodity fluctuation, political risk, seasonality, and weather forecasts.

Customer churn predictions

Cluster customers and understand which drivers impact customer loyalty the most. Identify at-risk customers before they churn so teams can implement mitigation strategies.

Cash flow forecasting

Identify drivers with the greatest impact on cash flow. Make confident decisions about capital expenditures, investments, or expansion plans through automated forecasting of future cash flows.

Start delivering rich scenarios faster

Embarking on a streamlined approach to scenario planning requires the right tools. With the Jedox Add-in for Excel and AIssisted™ Planning, finance teams can seamlessly move from endless spreadsheet duplication to effortlessly crafting rich scenarios based on accurate data. When finance teams are empowered to achieve their goals, organizations can navigate the future with clarity and precision. Request a demo to uncover the power of streamlined scenario planning with Jedox and download the guide for more information.

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