Differentiating What If Analysis from Scenario Planning

Topics: Future, Forecasting, Management Pages: 4 (1154 words) Published: June 28, 2012
Differentiating What-if analysis from Scenario Planning Introduction Be gone are the days when annual budgeting and planning steered the businesses, with changes being quiet predictable and minimal. With the increasing competition and changing economic environment, necessity to predict the future was recognized and as a result forecasting techniques were developed and widely adopted. Forecasts take a structured approach in scoping the uncertainties within a specified timeframe. Those predictions have the reasonable chances of being accurate. In the current situation of highly volatile business environment, organizations are forced to be dynamic in adapting to new futures enforced on them, even to ensure the very survival. This was very evident from 9/11 incident. Companies that ran on annual budgeting and forecasting, not expecting the aftermath of turbulence, were not to seen today. This triggered the epiphany of the fact that Forecasting techniques alone will not suffice to prepare the organization for critical uncertainties, which drawn back the focus largely towards the longlasting but least attended ‘What if Analysis’ and ‘Scenario Planning’

Purpose
‘What-If analysis’ and ‘Scenario Planning’ are planning techniques used to efficiently guiding the organization through Political, Economical, Social, Technological, Environmental and Legal changes. Though the end objective of both techniques is to prepare the business entity towards uncertainties, they are different in definition and the role they play in achieving it. Many a times, ‘What – If Analysis’ and ‘Scenario planning’ are perceived to be synonymous. This paper is a preliminary work in the direction of devising a structured approach to differentiate what if analysis from scenario Planning.

How ‘what – If Analysis’ and ‘Scenario Planning’ are different? What if Analysis is a wide thinking process of ‘What if’ there is a change (positive or point of concern) in the way things are happening today...
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