Scenario vs Version
<h2 id="definition">Definition</h2> <p>A Scenario represents a set of assumptions used to explore possible future outcomes or impacts of different strategic decisions on an organization's financial and operational performance. Scenarios help in planning for uncertainties by modeling what could happen under various conditions, such as changes in market dynamics, economic conditions, or internal business decisions.</p> <p>On the other hand, a Version refers to a specific iteration of a financial document or model, such as a budget, forecast, or report, that is created at a particular point in time or under certain conditions. Versions track the evolution of these documents over time, reflecting updates, revisions, and changes made as new information becomes available or as plans are adjusted.</p> <h2 id="comparison">Comparison</h2> <table> <thead> <tr> <th><strong>Function</strong></th> <th><strong>Scenario</strong></th> <th><strong>Version</strong></th> </tr> </thead> <tbody> <tr> <td>Objective</td> <td>To explore and prepare for various future possibilities and outcomes.</td> <td>To document and track changes in plans or performance.</td> </tr> <tr> <td>Use Cases</td> <td>Strategic planning Risk management Decision making</td> <td>Budgeting revisions Forecast updates Reporting cycles</td> </tr> <tr> <td>Key Focus</td> <td>Understanding the impact of different assumptions on future outcomes.</td> <td>Tracking the historical evolution and updates of financial documents.</td> </tr> <tr> <td>Planning Aspect</td> <td>Forward-looking, focuses on what could happen.</td> <td>Historical and current, focuses on what has changed.</td> </tr> <tr> <td>Decision Support</td> <td>Supports strategic decisions by assessing multiple futures.</td> <td>Supports operational decisions by showing progress and adjustments.</td> </tr> </tbody> </table> <h2 id="5-important-considerations">5 Important Considerations</h2> <ol> <li><strong>Clarity in Purpose:</strong> Clearly distinguish between scenarios and versions within CPM processes to ensure they serve their intended purposes effectively.</li> <li><strong>Document Assumptions:</strong> For scenarios, document the underlying assumptions. For versions, note the specific changes and reasons for updates.</li> <li><strong>Stakeholder Engagement:</strong> Engage relevant stakeholders in scenario planning for diverse perspectives and in version management for transparency.</li> <li><strong>Analytical Tools:</strong> Utilize CPM software that supports both scenario analysis and version control for efficient planning and performance management.</li> <li><strong>Review and Update:</strong> Regularly review both scenarios and versions to reflect new information, changing conditions, and strategic shifts.</li> </ol>