Enabling Budget Resilience with Scenario Planning Tools from Phocas

⇨ Scenario planning allows finance and its business partners in sales and operations to explore various future scenarios, considering both internal changes and evolving market conditions.

⇨ However, the process is often seen as time-consuming, leading to insufficient utilization and limits organizations' capacity to prepare for or respond to changes.

⇨ Leveraging cloud-based tools such as Phocas Budgets & Forecasts transforms scenario planning into a dynamic, automated process

Strategic planning, particularly data-driven Scenario Planning, is a key tool used by organizations to anticipate future changes and how they affect a company’s financial health. This approach allows finance and its business partners in sales and operations to explore various future scenarios, considering both internal changes and evolving market conditions, which is vital for effective budgeting and forecasting.

However, the process is often seen as time-consuming, leading to insufficient utilization and limits organizations’ capacity to prepare for or respond to changes. Many finance teams find themselves hamstrung by the limitations of their SAP ERP systems when attempting to implement effective scenario planning, a critical component of strategic budgeting and forecasting. The traditional reliance on manual spreadsheets for this process is not only challenging but also inefficient, especially when multiple scenarios need examination.

Without a solid foundation, scenario planning risks becoming an exhaustive, low-yield exercise, offering scant practical insights for decision-making. Daniel Cuthew, Global Partnership Executive at Phocas Software emphasizes, “To do scenario planning well, SAP users need to be able to quickly and easily combine their ERP data with data in other systems for a holistic business view. Relying solely on collating manual spreadsheets for this task can prove incredibly time-consuming, given the process inherently requires multiple scenarios to be analyzed.”

Organizations need to prioritize uncertainties that demand attention, explore potential future scenarios that stretch beyond the existing business models, identify and mitigate key risks, and ensure agility in the scenario analysis process to adapt swiftly to new insights. Cuthew advocates for a trio of core strategies to enhance effectiveness:

1. consolidating financial, sales, and operational data;
2. fostering active stakeholder engagement and collaboration; and
3. integrating scenario planning into your budgeting and forecasting mechanisms.

Addressing these areas through specialized software can significantly streamline and improve the scenario planning process.

Leveraging cloud-based tools such as Phocas Budgets & Forecasts transforms scenario planning into a dynamic, automated process. By providing seamless integration with SAP and over 200 other systems, it centralizes data, enhances collaborative efforts with in-built workflows, and incorporates driver-based data functionalities. This comprehensive approach significantly optimizes the effectiveness of scenario planning, guaranteeing that budgets and forecasts remain adaptable and relevant.

Phocas streamlines the process by aggregating data from ERP and any other sources into a single, unified platform, ensuring that all team members have access to the latest financial, sales, and operational information. Designed with user-friendliness in mind, the software offers flexibility in budgeting by supporting many methods and offers integrated workflows, which expedite feedback and enhance collaborative efforts. Its driver-based capabilities support precise sales forecasting, demand planning, and headcount management. With the ability to juxtapose live data against performance metrics, Phocas facilitates efficient scenario planning and more accurate reforecasting.

Cuthew highlights, “Because Phocas is so easy to use, finance teams on SAP can collaborate on scenario planning more effectively with sales and operational teams. This helps them to produce more accurate budgets and forecasts, promote companywide buy-in on the numbers and improve budget resilience.”

Phocas Budgets & Forecasts streamlines scenario planning, making it a quick and straightforward process that significantly conserves time. In Phocas, scenario planning is executed using the lookup tabs in Budgets & Forecasts. Lookup tabs are very handy tools and allow SAP users to pull out various inputs, then model different scenarios by changing drivers or assumptions. For example, users might begin by evaluating various options for increasing revenue and assess their contribution to the desired growth level. They can then stress-test outlined strategies, such as selling more to existing customers and adding new channels, determining high, medium, and low figures for each. This powerful analysis helps SAP users to quickly assess whether these levers collectively deliver the desired revenue increase.

Phocas enables every member of the business to experiment with various assumptions and observe their impact on outcomes, facilitating informed decision-making by comparing different options. In a business environment filled with crucial uncertainties, having access to planning tools that simplify risk management and enhance strategic thinking is invaluable for fostering a robust business foundation.