What If Analysis: Find Out How Changes Influence Your Business

What If Analysis: Find Out How Changes Influence Your Business

It is very difficult to succeed in a modern business environment without proper strategic planning. Very often having faced with difficulties companies become very vulnerable and can not respond to challenges. Indeed, in today’s business world problems get increasingly tougher and thus it becomes more difficult to solve them. At the same time it is possible to anticipate problems and changes, having prepared a couple of solutions to them. There are always various scenarios that might possibly become a reality in future. If company is able to analyze possible developments it can plan own counter action. In other words it will be aware of what might happen if certain factors change. What if analysis is actually quite popular throughout various businesses and industries. Sure thing, every top manager wants to feel secure in case something changes in the external environment, markets the company is operating in, relations with customers an business partners etc. These developments may not come true, but it is always good to be prepared. On top of that it is possible to say that proper what if analysis is about solving non-existing problems and evaluating possible and potential risk factors.

The name of what if analysis it is quite explicit – that is not difficult to guess what it means as long as you speak English. What happens if something happens to the company? What if analysis is widely used for business modeling. Moreover, the task of top management is not only to evaluate risk factors under certain changes and circumstances but also look for possible solutions to these potential dangers. What if analysis is often used in strategic planning since it involves future vision which is and on separable part of any strategic management system. This type of analysis may take various forms from simple excel sheets to use of complex Software Solutions which are mainly suitable for large companies.

Very often answering a couple of questions can really help predict the situation and develop various scenarios for company. If proper attention is paid to what if analysis problems would not seem that dangerous since top managers and business owners have several solutions. It will never come out as surprise or shock since what if analysis already contains description of possible developments.

Without any doubts, the best company top managers as well as external consultants are to be involved in what if analysis. At that, one needs to remember that involvement of own personnel is actually very important although some of them may lack fundamental knowledge in strategic planning. At the same time they possess valuable knowledge on situation and problems inside the company, and very often insiders information plays a great role in future planning.

What if analysis requires actual data on current company performance as it is very difficult to plan ahead and make assumptions without being aware of where you are now. What if analysis can be used in combination with balanced scorecard which is known as the best strategic management and performance evaluation tool.

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