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Scenario planning software on 1 agreed base case, so every branch updates itself.
We settle the base case first, with 1 owner per driver, and then build the branches on it. The price of the build is fixed after that read.
Scenario planning software branches alternative cases off a base plan and shows what each change does to revenue, cost and cash. Constancia, an EPM consultancy, builds it for multi-entity groups whose board wants a downside case by a date the base case cannot yet support.
- Reads
- The base plan as it stands, the workbooks each past scenario was built in and the drivers that differ between them.
- Produces
- 1 agreed base case with a named owner per driver, and branches that inherit every change to it.
- Then
- The build at a fixed price, and the first branch is the downside case the board asked for.
Scenario planning software does 6 jobs on 1 base case, and agreeing that base case comes before the other 5.
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- 01
The base case
1 plan, with each driver owned by a named person, that every scenario is measured against.
- 02
The driver switches
Price, volume, headcount, interest rate and exchange rate each have a switch a scenario can move without a rebuild.
- 03
The branches
A scenario branches from the base case, keeps its own driver changes and inherits every later change to the base.
- 04
The downstream effects
A volume change flows through revenue, cost of sales, working capital, cash and covenant headroom in 1 run.
- 05
The comparison view
Base, upside and downside sit side by side on the same lines, with the driver differences listed beneath.
- 06
The board version
The board sees the 3 cases and the 5 assumptions that separate them, signed by the person who owns each.
A downside case built in a copied workbook goes stale the day the base plan changes.
Where your board asks for a downside case each quarter, the finance team probably copies the forecast workbook and renames the copy. The base forecast then changes twice before the board meeting, and the copy keeps the old drivers.
The night before the meeting an analyst rebuilds the downside from the new base, and the cash line moves from the version the CFO read. Constancia has completed 58 implementations over 35 years, and a scenario survey with us starts by counting the versions of the base case in circulation.
We settle 1 base case with an owner per driver, then branch the downside from it, so a change to the base reaches every case.
Scenario planning software is worth building once a group is in 4 positions.
- 01
A base case with 2 versions
The CFO's forecast and the divisional forecast differ, and each scenario is built off whichever the analyst had open.
- 02
Scenarios rebuilt by hand
Each downside, upside or acquisition case is a copied workbook, and 3 cases take 3 weeks.
- 03
Covenants or a lender to satisfy
A bank, an investor or the board asks what a fall in volume does to cash and headroom, and wants the answer this month.
- 04
An acquisition or a refinancing in the diary
A dated event has turned the downside case from an exercise into a board paper.
Abacum (FP&A software) branches scenarios for a finance team that plans in weeks and holds its consolidation elsewhere. OneStream (EPM software) branches them for a group that wants the scenario's effect on the consolidated result and the covenants in the same model.
A scenario costs a rebuild in a workbook and a branch on a model somebody owns.
The middle column describes a platform that branches correctly and a finance team that stopped trusting the branches.
| A spreadsheet | A platform nobody owns | A platform with named owners | |
|---|---|---|---|
| The base case | The latest forecast file, or the one the analyst had open. | 1 base case on the platform, with drivers nobody has been appointed to defend. | 1 base case, with each driver owned by a named person and its date of agreement. |
| Building a new scenario | A copy of the workbook, 200 cells changed by hand, over a week. | A branch on the platform, built by the 1 person who knows how. | A branch any owner can open, moving the switches for their own drivers. |
| A change to the base | Every scenario copy is stale, and each is rebuilt or quietly abandoned. | The branches inherit the change, and nobody checks what it did to them. | The branches inherit the change, and the comparison view lists what moved in each. |
| The covenant and cash effect | Calculated in a separate treasury workbook after the scenario is finished. | Calculated on the platform from a cash logic that was built once and never reviewed. | Calculated in the same run, from cash logic that treasury owns. |
| The board paper | 3 charts from 3 files, and a footnote about which version each came from. | 1 export, with the assumption differences typed in by hand. | 1 view of the 3 cases, with the assumptions that separate them listed by owner. |
The base case a scenario branches from is the FP&A model, and 2 of its drivers are plans of their own.
FP&A consulting
The base case itself, built on drivers the business owns and the ledger's structure.
Read about FP&A consultingWorkforce planning
The headcount driver, with 1 count of people for every branch to start from.
Read about workforce planningAbacum Intelligence
The layer that drafts a scenario's commentary from the branch, once the base case is owned.
Read about Abacum Intelligence
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