Optimizing planning with scenario planning in Strategic Planning Workspace

  • Release version: Xanadu
  • Updated August 1, 2024
  • 4 minutes to read
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    Summary of Optimizing planning with scenario planning in Strategic Planning Workspace

    Scenario planning in the Strategic Planning Workspace empowers portfolio managers to optimize portfolio planning by creating, comparing, and approving multiple planning scenarios. This process helps assess potential outcomes, align plans with strategic goals, and select the most effective portfolio plan for a defined planning cycle.

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    Key Features

    • Prioritization tab: Add, remove, and adjust planning items and their timelines within a scenario.
    • Roadmap tab: Visualize planning items on a Gantt chart-like timeline, enabling drag-and-drop adjustments of start and end dates.
    • Financials tab: Set custom budget targets and simulate multiple budget scenarios to compare financial outcomes such as Capex and Opex allocations, helping balance resources with strategic objectives.
    • Outcomes panel: Displays critical financial indicators including budget targets, allocation status, benefits from planned items, and actual costs from out-of-plan items, with color-coded alerts for budget variances.
    • Scenario management: Create scenarios from existing plans, compare scenarios side by side, approve the best scenario, and manage scenario lists by renaming or deleting.
    • Customization: Personalize financial views using time scale and range filters to manage budgets on monthly, quarterly, or yearly cadences aligned with organizational planning cycles.

    Practical Use and Benefits

    Portfolio managers can simulate different planning and budget combinations to make informed decisions, ensuring prioritized items fit within budget constraints and deliver monetary benefits. Scenario planning supports regular planning cycles, mid-cycle adjustments, and financial reviews, facilitating collaboration with program managers and financial teams to align portfolio plans with organizational strategy.

    Approved scenarios become the new live portfolio plan, enabling dynamic and strategic portfolio management that adapts to evolving priorities and financial conditions.

    Important Considerations

    • Budget allocation at the portfolio level must be enabled and budget attributes configured to allocate funds by expense or cost type.
    • Financial scenario planning supports Epics, Projects, and Demands; customers using Legacy Investment Funding should migrate to the new experience.

    As a portfolio manager, optimize your portfolio planning by comparing potential outcomes, assessing their alignment with strategic goals, and approving the best scenario as your live plan.

    Scenario planning items in the Prioritization tab

    The Prioritization tab of the Scenario page enables you to add and remove planning items to/from a scenario and adjust their dates.

    Prioritization tab of the Scenario screen

    Scenario planning items in the Roadmap tab

    The Roadmap tab displays a Gantt chart-like view of the planning items in the scenario, showing their planned start and end dates across the portfolio plan timeline. Using the Roadmap tab, you can drag the bars representing planning items across the timeline to adjust their dates.

    Roadmap tab of the Scenario screen

    Scenario planning items in Financials tab

    The Financials tab of the Scenario page enables you to set custom targets, budget, and compare the allocated budget against target using the outcomes panel.

    Financials tab in Scenario planning view detailing the budget and forecast values of planning items.

    Portfolio Manager can simulate multiple scenarios with different budget combinations and compare their outcomes to arrive at an informed decision to balance the resources and strategic objectives. Using the financials view in Scenario planning, you can get a simulation mode for the financial information. Using this view, Portfolio managers working on the portfolios, can set a portfolio budget target for a particular planning cycle, which could be a monthly, quarterly, yearly, or beyond a year up to 5 years. Using this defined budget, portfolio users can prioritize the planning items within the portfolio to analyze if the prioritized items can be executed within their portfolio budget, while reviewing the monetary benefit from the prioritized items.
    Important:
    Enable the budget allocation property to allocate budget to your planning items at portfolio-level and configure the budget attributes to allocate budget by expense type or cost type.

    Create multiple scenarios to compare them, and work with your stakeholders to approve an ideal plan with better monetary benefit returns. Once approved, the approved Scenario will become your new portfolio plan for the defined planning cycle. For more information to know about the changes happening in a portfolio after scenario approval, see Approve a scenario in Strategic Planning.

    You can perform financial scenario planning throughout your planning or execution cycle depending on your organization needs such as at your regular planning cycles, quarterly reviews, or financial review cycles. Financials in scenario planning helps you to arrive at an informed decision and customize the portfolio planning to match with your organization needs.
    Note:
    • Financials in scenario planning is supported only for Epics, Projects, and Demands type of planning items.
    • Customers using the Legacy Investment Funding should migrate to new experience to work on the financial scenario planning.

    Personalize your scenario planning financials view using the Time scale and Range filters. Manage the budget of your planning items by monthly, quarterly, or yearly cadence depending on the planning cycle of your organization.

    Outcomes panel in Scenario planning

    The outcomes panel in the simulation indicates the financial information of the portfolio such as target and budget amounts for Capex and Opex, set budget target for this simulation, utilized and remaining budget from the target, benefit from the In-plan items, and the actual costs accounting from the out of plan items. The aggregated data is fetched based on the portfolio timeline range including the target and budget data.

    Representations in outcomes panel for the identification.
    Table 1. Outcomes panel representation
    Indication Definition
    Red text for amount without progress bar indication for Total Simulated Budget No defined or set target amount for this scenario.
    Red text for amount and red progress bar for Total Simulated Budget Total allocated budget for planning items exceeds the scenario's set target amount.
    Red text amount for Capex Budget Capex Budget allocations exceed the scenario's Capex target.
    Red text amount for Opex Budget Opex Budget allocations exceed the scenario's Opex target.
    Green text for budget amounts and green progress bar Budget allocation for each expense types and total budget is within the scenario's set target.

    Scenario planning features

    In scenario planning, you can perform the following actions:
    Feature Description
    Create a scenario in Strategic Planning Create a scenario from the current plan, or another scenario, in a simulated environment to compare the scenario with the live plan and other scenarios.
    Compare scenarios in Strategic Planning Compare scenarios and the live plan side by side to review tradeoffs and items added or removed from the plans.
    Approve a scenario in Strategic Planning Approve the best scenario.
    Manage scenarios in Strategic Planning View list of scenarios, rename scenarios, and delete scenarios.

    Scenario planning use cases

    The following are high-level use cases for scenario planning.
    • Fiscal year planning: Megan Burke, Portfolio Manager at ACME Inc, is planning for the next fiscal year and is required to prioritize planning items and align them with the organizational strategic goals. Megan creates a scenario for the portfolio plan and then uses the Prioritization tab to align items with goals. Megan holds discussions with program managers and with the financial team, creates multiple scenarios, and compares them. Megan approves the optimal scenario as a well-aligned strategic portfolio plan for the next fiscal year.
    • Mid-cycle reprioritization; Changed priorities emerging mid-year require adjustments to the current portfolio plan. John Doe, the product manager at ACME Inc, creates a scenario and incorporates the changed priorities. John adjusts the plan based on the program manager's and financial team's feedback and finalizes the plan.