Even the most diligent planners are unlikely to create scenarios that reflect the plight that COVID-19 has on businesses and the economy. The worst-case outcome, which many predicted at the beginning of the year, right now might be the best. This is why scenario modeling is such a critical process among events that affect business.
By creating a standard scenario for each plan, you effectively create a set of guidelines to move through the storm. These standard scenarios do not affect the exceptional nature of the current circumstances, so it is essential to be based of every planning process. When you compile your standard scenario, the effects resulting from this exceptional situation will be at the top and these alternatives will deviate significantly from the standard scenario.
The ability to modeling alternate scenarios is critical to a rapidly changing situation in a flexible way. This is because any plan built today could be ignored tomorrow because of the still too uncertain and evolving situation. The standard scenario is a reference point that we can try to get back to as soon as possible after these conditions have passed.
Creating a scenario is a really important function to create a healthy business continuity plan. It is very important to look at the worst-case scenarios here and to develop a contingency plan for every one of them.
In times of crisis, providing financial stress tests and plans to recover money is essential to understanding the effects of money. The best the company can do is model the impact of these scenarios on performance. This helps you understand how much your capital will be able to influence adverse economic events. This is an important first step in determining the steps you need to take to recover and reduce your cash needs.
Discover the key capabilities you need to support ongoing scenario forecasting and modeling, and succeed in these turbulent times. CCH Tagetik's financial forecasting software provides business modeling, ‘’what-if’’ scenarios and forecasting as part of a unified enterprise performance management solution.
Based on macroeconomic factors, such as unemployment, to the specifics of companies for example income, budgeting scenarios require a precise grip of their factors. Get more meaningful scenario analysis and more accurate and detailed plans, budgets, and forecasts.