Search
 
Best Practices

Real-Time, Dynamic Scenario Planning

How treasury and finance teams can incorporate more flexible and comprehensive scenario analysis into planning and forecasting processes.

By Manoj Shroff | November 19, 2020 at 12:12 PM
Stock illustration: numerous interconnected questions

The fast, highly disruptive pace of the Covid-19 pandemic has forced organizations to rethink their traditional approaches to financial planning, modeling, and risk management. Treasury and finance teams are navigating toward an uncertain future by using diverse sets of real-time data to gauge the impacts of different “what-if” scenarios on corporate performance. However, the complexity of today’s market conditions, not to mention the pandemic’s evolving impacts on business drivers, makes the standard scenario analysis process unreliable.

The global crisis has revealed the need for treasurers and CFOs to embrace a new, more robust approach to managing complexity in real time. This means making proactive, permanent changes to their forecasting, planning, and analysis processes. Why? Because the financial models of the past are no longer relevant. Finance teams cannot succeed if they think in terms of quarters and years; instead, they need to be planning their response to projected conditions in the coming months or even weeks.

As market and business volatility continues, finance and risk leaders will be at a major disadvantage if they don’t leverage dynamic scenario planning. Characterized by real-time modeling techniques and rapid simulations, this approach helps treasury and finance professionals better predict and plan for future challenges. Dynamic scenario planning leverages predictive internal and external financial data. The resulting strategic action plans stand up to disruption and macroeconomic risks, and they identify opportunities for revenue growth, while optimizing customer and supplier relationships.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

Recommended Stories

Treasury Races Toward AI

Treasury Races Toward AI

Mark O'Toole |

Artificial intelligence has great potential, but treasurers must learn to jog before they can sprint.

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.