Scenario-Based Budget Modelling
MediumTesting budget allocations under different demand, policy, or economic scenarios.
The Pain
Budget planning assumes a single future, but demand and costs vary. When leadership asks what happens under different scenarios, finance teams build one-off spreadsheet models that take weeks. Comparing options side by side requires duplicating work across multiple files.
What's Possible
AI enables rapid testing of budget scenarios: different demand levels, policy changes, or efficiency assumptions. Finance can show leadership clear comparisons across options. Budget planning becomes more robust by considering multiple futures.
Signals This Is Worth Exploring
Budget planning assumes static demand and costs
Scenario requests take weeks to fulfil
Leadership makes decisions without seeing alternatives
Past budgets often proved wrong due to unforeseen changes
Impact
Budget scenarios produced in days rather than weeks
Clear comparison of allocation options under different assumptions
More resilient budgets that account for uncertainty
Finance positioned as strategic advisors rather than number processors
Typical Approach
Assess
Identify key variables and scenarios relevant to budget planning. Document current modelling approaches.
Pilot
Build scenario capability for one budget area. Test with upcoming planning cycle.
Scale
Extend to full budget with self-service scenario testing for budget holders.
What to Watch Out For
Scenarios may be misused to justify predetermined positions
Too many scenarios can paralyse decision-making
Assumptions need clear documentation and governance
Models require regular updates as conditions change
Questions to Think About
Before we talk, you might want to consider:
What scenarios would be most valuable to test in your budget planning?
How do you currently handle uncertainty in budget assumptions?
Who needs to see scenario comparisons and in what format?
What variables have the biggest impact on your budgets?
Build On This
Once the basics are working, you can expand:
Sensitivity analysis
Identify which assumptions have the biggest budget impact
Rolling forecasts
Update scenarios as the year progresses
Stress testing
Test budgets against extreme but plausible scenarios
Want to explore if this fits your organization?
Book a 30-minute call to discuss your situation and whether this use case makes sense for you.
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