--- sourceDocument: Australia Governance, Risk, and Compliance sourceDocumentLink: https://servicenow-prod.fluidtopics.net/r/governance-risk-compliance Release : - australia ft:locale : - en-US ft:publication_title : - Australia Governance, Risk, and Compliance ft:clusterId : - grc bundleId : - grc workflow : - Technology --- # Building a scenario analysis using simulation # Building a scenario analysis using simulation {#ariaid-title1} * Release version: Australia * * Updated March 12, 2026 * * ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 8 minutes to read Use the scenario analysis process to assess how critical services perform under adverse conditions using statistical simulation. Starting with Operational Resilience, version 22.3.1, Operational Resilience application, you can follow a guided playbook to perform a scenario analysis. The playbook flow guides you from scoping a service and dependencies through to a treatment decision and, optionally, logging vulnerabilities and issues. Note: For the objectives, benefits, and known limitations of advanced scenario analysis, see [Scenario analysis](https://servicenow-prod.fluidtopics.net/QYXOxrc39P1_uH1Hc85f8g "Conduct a scenario analysis to assess how a critical service performs under adverse conditions. Starting with Operational Resilience, version 22.3.1, you can use advanced scenario analysis with simulation in the Operational Resilience Workspace. Apply statistical modelling to quantify financial impact and record a treatment decision."). Each scenario analysis runs in one of two methods, set in the Method field on the record: * Statistical Modelling --- Default. Runs the simulation as described in [Start simulation and run scenario testing](https://servicenow-prod.fluidtopics.net/tHTsKJkzDGEIQsDFaoVLHQ "Complete the simulation assessment questionnaire to provide the statistical model with the input values required to run the simulation."). * Manual --- Uses an SME-driven assessment template on the Scenario Testing step instead of a simulation as described in [Run a scenario analysis using the manual method](https://servicenow-prod.fluidtopics.net/8nMMDHVrv7s~tMf5Vvmgfg "Run a scenario analysis on subject-matter-expert (SME) judgment instead of statistical simulation. The manual method reuses the guided playbook but omits the Reference Data step and the quantitative Results step."). Omits the Reference Data and Results steps. All other playbook steps (Scope, Scenarios, Treatment Decision, Operational Vulnerabilities, Issues) are identical. {#scenario-analysis-playbook-experience__ul_sca_playbook_methods} ## Playbook interface {#scenario-analysis-playbook-experience__scenario_analysis_playbook_form} When you open a scenario analysis record in Operational Resilience Workspace, the Playbook tab appears in the form. This tab is the primary interface for running the complete scenario analysis. {#scenario-analysis-playbook-experience__scenario_analysis_playbook_form__entry__2} | UI Component | Description | |-|-| | Playbook tab | Tab displayed in the form when a Scenario Analysis record is opened in Operational Resilience Workspace. This is the primary interface for running the end-to-end analysis. | | Playbook header | Title of the current activity set. A check mark inside the header indicates the activity set is complete. | | Stage panel | Panel located on the Playbook form that displays the full list of playbook steps. For each step, the number of activities completed and a status circle is displayed. A check inside the circle indicates that step is complete. | | Activity stream | Content area displayed when a step is selected in the stage panel. Each step surfaces its own content, including a service selector, dependency list, scenario picker, reference data, simulation assessments, and results. | [ ] ## Steps for scenario analysis {#scenario-analysis-playbook-experience__playbook_steps} The scenario analysis playbook contains required and optional stages. Scenario testing consists of two sub-steps --- Input Assessment and Results --- that appear as separate items in the stage panel. You must complete both before the playbook advances to Treatment decision. The playbook guides you through the following steps: 1. Create a scenario analysis record ([Create a scenario analysis record using simulation](https://servicenow-prod.fluidtopics.net/2YlsmWkG2onFdXpLLsAAcA "Create a Scenario analysis record to assess how a critical service performs under adverse conditions using statistical modelling. Use the guided Playbook experience to move through scoping, scenario selection, simulation, results review, and treatment decision.")) 2. Add service and dependencies as part of the scope: ([Define the scope and dependencies](https://servicenow-prod.fluidtopics.net/z~PVu0QCXxEDIKfHVtc3Pw "Define the scope of the Scenario analysis by selecting the service to analyze and adding the dependencies that support it during a disruption.")) 3. Add scenarios and review reference data ([Add scenarios and review reference data](https://servicenow-prod.fluidtopics.net/LDFYOCAqxOAjOX9JkpvTAA "Select the adverse-event scenarios to test against the scoped service, then review the historical reference data that the system will use to auto-populate simulation inputs.")) 4. Complete scenario testing ([Start simulation and run scenario testing](https://servicenow-prod.fluidtopics.net/tHTsKJkzDGEIQsDFaoVLHQ "Complete the simulation assessment questionnaire to provide the statistical model with the input values required to run the simulation.")) 5. Review results and make a treatment decision ([Review results and decide the treatment](https://servicenow-prod.fluidtopics.net/rAGRGvcgwjth5OM6mSprEw "Review the simulation output metrics, then select a treatment strategy to address the identified risk.")) 6. Log operational vulnerabilities and issues (optional) ([Log operational vulnerabilities and issues](https://servicenow-prod.fluidtopics.net/ZJVTacaO_n6njsaF8_9ZYQ "Optionally document operational weaknesses and link issues identified from the scenario analysis results to support remediation tracking.")) 7. Complete the scenario analysis ([Mark the scenario analysis as complete](https://servicenow-prod.fluidtopics.net/IUIIMXE9yAmMUiYZVgRD3Q "Complete the Scenario analysis after all required playbook steps are finished to lock the record and make the results available for reporting and governance review.")) {#scenario-analysis-playbook-experience__ol_n2r_1pq_z3c} The following table describes each stage in the scenario analysis playbook. {#scenario-analysis-playbook-experience__playbook_steps__entry__2} | Stage | Description | |-|-| | Scope -- Services | Service that you want to analyze. You can add only one service per analysis; to change the service you must create a new record. | | Scope -- Dependencies | Dependencies such as systems, people, third parties, and locations that support the selected service. Once you mark them as complete, this selection is locked and cannot be changed. | | Scenarios | Adverse-event scenarios from the library (for example, Cloud service outage, Network connectivity failure, and so on). | | Reference Data | Historical risk-event records that the statistical model uses as reference data. The Risk events list is empty by default. Select Add to choose the desired risk events. Selected records are captured as a snapshot on the scenario analysis record. Events that match your filter and are created after you mark the step as complete are not added retroactively. The snapshot does not refresh when the source record is updated. Once marked complete, you cannot add any further risk events. | | Scenario Testing | Simulation assessment that includes a questionnaire. For more information, see [Start simulation and run scenario testing](https://servicenow-prod.fluidtopics.net/tHTsKJkzDGEIQsDFaoVLHQ "Complete the simulation assessment questionnaire to provide the statistical model with the input values required to run the simulation."). | | Results | Simulation output metrics. Contains Simulation Results. You can adjust the answers in Scenario Testing until you select Mark as complete on the Results step. | | Treatment Decision | Decision to treat the identified risk. Offers the following options: Accept, Mitigate, Avoid, or Transfer. | | Operational Vulnerabilities | (Optional) Operational weaknesses logged from the analysis results. | | Issues | (Optional) Issues logged for a separate remediation tracking. | [ ] ## Statistical model profile {#scenario-analysis-playbook-experience__statistical_model_profile} The Statistical model profile is set by an administrator and controls how the simulation runs. It links an Annual Loss Model (or other statistical model) to the assessment question templates used to collect input parameters. The profile translates technical model parameters into plain-language questions that business users can answer without needing to know the underlying mathematics. One statistical model profile is shipped with the base version: Annual loss model driven by risk events. Note: The Statistical model profile field on the Create Scenario Analysis form is a reference picker, not a drop-down. You can select only one profile per analysis. {#scenario-analysis-playbook-experience__statistical_model_profile__entry__2} | UI Component | Description | |-|-| | Name | Name that identifies the Statistical Model Profile. | | Statistical Model | Mathematical model used to run the simulation. Currently, only Annual Loss Model is supported. | | Input Assessment Template | Smart Assessment template that collects Lambda, Mu, and Sigma values from the SME. | | Output Assessment Template | Smart Assessment template that surfaces the computed results to the analyst. | | Table | ServiceNow table from which reference data is drawn to auto-populate assessment answers (for example, risk events). | | Active | Status that indicates whether the profile is available for selection when creating a new Scenario Analysis. | [ ] ## Scenario analysis profile --- parameter and questions {#scenario-analysis-playbook-experience__scenario_analysis_profile_parameters} A Scenario Analysis Profile links a Statistical Model Profile to the input and output assessment templates and maps model parameters to plain-language questions. The profile translates Lambda, Mu, Sigma, and other Monte Carlo parameters into questions that business users can understand and answer. {#scenario-analysis-playbook-experience__scenario_analysis_profile_parameters__entry__3} | Parameter | Mapped question | Direction | |-|-|-| | loss_frequency_lambda | How many loss incidents do you expect to occur over the chosen time horizon (typically one year)? | Input | | simulation_runs | How many simulation runs are required? | Input | | severity_mu | What is the typical financial loss per incident over the chosen time horizon? | Input | | severity_sigma | What are the variable losses (sigma)? | Input | | min_loss | What is the minimum credible financial loss that could result from a single incident? | Input | | max_loss | What is the maximum credible financial loss that could result from a single incident? | Input | | selected_percentile | Provide the level of risk sensitivity you want to analyze. | Input | | loss_tolerance | Service impact tolerance for financial loss (sourced from the linked service). | Input | | mean_expected_loss | What is the model's calculated Average Annual Loss? | Output | | var_50_percentile | What is the model's Typical (Midpoint) Annual Loss? | Output | | std_deviation | What is the model's standard deviation of annual losses? | Output | | var_90_percentile | What is the selected percentile for tail risk (90th)? | Output | | var_95_percentile | What is the modeled annual loss at the 95th percentile? | Output | | var_99_percentile | What is the modeled annual loss at the 99th percentile? | Output | | max_loss (output) | What is the Maximum Annual Loss (USD) observed across runs? | Output | | tail_risk_average | What is the Tail Risk Average (USD)? | Output | | prob_exceed_tolerance | What level of financial loss has the probability of being exceeded? | Output | [ ] The parameter column on the Statistical Model Profile record is fixed. You can re-map an existing parameter to a different assessment question or update an existing question but the number of questions and parameters remains same. You cannot add new parameters or remove existing ones because the parameters are tightly coupled to the annual loss model that ships with the base version. Note: The Monte Carlo simulation uses a log-normal severity distribution and a Poisson frequency distribution. These distributions are set and you cannot configure them. ## How the simulation runs {#scenario-analysis-playbook-experience__simulation_execution_model} When you select Start Simulation, the simulation is dispatched synchronously to the Triton inference server. The default number of simulation runs is 100,000; you can reduce this number through the simulation count question on the input assessment. On completion, the playbook displays a "Simulation Completed Successfully" banner. Re-running the simulation with the same inputs may produce different output values within the same statistical range. Every "Start Simulation" request submits a fresh run to the engine. ## Simulation results {#scenario-analysis-playbook-experience__simulation_results} After the simulation runs, the output assessment surfaces quantitative metrics. These values help stakeholders understand the financial and operational impact of the scenario. {#scenario-analysis-playbook-experience__simulation_results__entry__2} | UI Component | Description | |-|-| | Average Annual Loss | Mean financial loss expected each year based on the simulation. | | Typical (Midpoint) Annual Loss | Most likely single-year loss outcome from the model. | | Variation (Std Deviation) | Variation such as how much loss values vary from the average. Higher values indicate greater uncertainty. | | 90th Percentile Loss | Loss exceeded in only 10% of simulated outcomes --- high-risk scenario. | | 95th Percentile Loss | Loss exceeded in only 5% of simulated outcomes --- very high-risk scenario. | | 99th Percentile Loss | Extreme tail-risk loss value exceeded in only 1% of outcomes. | | Tail Risk Average | Average loss in the worst outcomes beyond the selected percentile (conditional value at risk). | | Probability of exceeding loss tolerance | Key output value. Indicates how likely the scenario is to breach the service's defined impact tolerance. | | Simulation Results tab | Quantitative output metrics from the simulation run. | [ ] Note: Each input question that the back-fill automation auto-populates shows a Last responded by System badge under the answer. The badge stays in place if you overwrite the value; it is for informational purpose only. ## Treatment decision {#scenario-analysis-playbook-experience__treatment_decision} The Treatment Decision step shows selectable cards, one per treatment strategy, with a required Reason field for the card grid. Selecting a card highlights it and writes the chosen strategy to the Treatment field on the underlying record. After submitting the treatment decision, the optional Operational Vulnerabilities and Issues steps are available. {#scenario-analysis-playbook-experience__treatment_decision__entry__2} | UI Component | Description | |-|-| | Accept | Option to proceed without taking remediation actions. | | Mitigate | Option to create actions to reduce the likelihood or impact of the risk. | | Avoid | Option to change or discontinue the service or dependency to eliminate the risk. | | Transfer | Option to shift the risk to a third-party, for example through insurance or outsourcing. | | Reason | Free-text field for entering the justification for the selected treatment strategy. Provided for all four treatment choices. | [ ] ## Workflow Studio Playbook {#scenario-analysis-playbook-experience__section_x54_mbq_bjc} Playbook are created in Workflow Studio and displayed in workspace pages built in UI Builder. For more information, see the following topics: * [Exploring Workflow Studio](https://www.servicenow.com/docs/access?context=exploring-workflow-studio&version=australia) * [Getting started with Playbooks](https://www.servicenow.com/docs/access?context=getting-started-processes&version=australia) {#scenario-analysis-playbook-experience__setting-up-csm-playbooks_ul_t2g_qzb_ccc} **Related tasks** * [Verify the Smart Assessment templates setup](https://servicenow-prod.fluidtopics.net/UT8iV4poa2rLE4WBdyERFQ "Verify that the input and output Smart Assessment templates are set up and published in the Assessment Workspace before running an advanced scenario analysis. The Statistical model profile in the advanced scenario analysis uses these templates to present plain-language questions and display simulation results.") * [Create a scenario analysis record using simulation](https://servicenow-prod.fluidtopics.net/2YlsmWkG2onFdXpLLsAAcA "Create a Scenario analysis record to assess how a critical service performs under adverse conditions using statistical modelling. Use the guided Playbook experience to move through scoping, scenario selection, simulation, results review, and treatment decision.")