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Mastering Scenario Modeling in EPM Cloud: A Step-by-Step Guide

Author: David Silverstrim | 7 min read | July 11, 2023

Scenario modeling is crucial to any organization’s planning, budgeting, and forecasting. According to Gartner’s ‘Guide to Scenario Planning for Functional Leaders,’ research shows that agile decision-making and strategy setting result in oversized performance in disrupted times.

Gartner concluded that Agile strategy setting is facilitated by strategic scenario planning, which offers a framework and methodology to analyze potential futures. With the advancements in technology, the process of scenario modeling has become more sophisticated, accurate, and efficient. This is where the Oracle EPM Cloud comes into play.The Oracle EPM Cloud provides a comprehensive set of tools for scenario modeling, enabling organizations to create multiple what-if scenarios to better understand the impact of different business decisions. This cloud-based solution offers a flexible, scalable, and integrated platform that can help organizations streamline their planning and forecasting processes, improve accuracy, and reduce the risk of errors.

This article will explore the benefits of scenario modeling in the EPM Cloud and provide an overview of this powerful tool’s key features and functionalities. We will also discuss some best practices for scenario modeling and provide tips on how to get the most out of the EPM Cloud for your organization’s planning and forecasting needs.

Demand For Short-Term Agility

The COVID-19 pandemic has created unprecedented uncertainty and disruption for businesses worldwide, leading to sudden changes in demand and supply and making agility a critical factor in short-term forecasting and planning.

Consumer spending patterns have shifted significantly towards necessities and online shopping, while discretionary spending on luxury items has declined. On the supply side, disruptions to transportation and supply chains have led to artificial shortages and price hikes. Businesses have been forced to adapt quickly and respond to the rapidly evolving environment.

The challenge of uncertainty is particularly acute in the long-term planning process, making short-term agility more critical than ever. In this context, the EPM Cloud offers a comprehensive set of tools for scenario modeling that can help businesses optimize their short-term forecasting and planning processes.

Forecasting In Uncertain and Unpredictable Situations

The COVID-19 pandemic has brought uncertainty and unpredictability to the forefront of short-term business planning and forecasting. As a result, historical trend analysis, seasonality, and year-over-year comparisons are no longer reliable approaches.

Finance leaders are now turning to scenario modeling and rolling forecasts as more effective tools to deal with unforeseen levels of short-term uncertainty. CFOs are developing a range of scenarios to prepare for different outcomes and stay agile in the post-crisis world. Depending on their circumstances, businesses can take either a defensive cost-cutting or opportunistic growth strategy.

To capture a range of possibilities, businesses need a financial planning solution that can effectively perform scenario modeling functions. Oracle’s EPM Cloud offers a strategic scenario modeling solution ideal for contingency and business continuity planning efforts.

Operational Liquidity Management

Maintaining sufficient liquidity has become a top priority for businesses of all sizes in the current economic climate. As credit lines and short-term credit are restricted, organizations are fighting to ensure operational liquidity to sustain their business operations. To survive and stabilize their business in the short term, companies are taking steps to freeze non-essential spending, resort to payment deferrals, and restructure their balance sheets to ensure short-term liquidity and operational continuity. Adequate cash flow and balance sheet forecasting are fundamental to providing operating liquidity.

With Scenario Modeling in EPM Cloud, businesses can model different liquidity scenarios with ease and accuracy. Scenario modeling capability allows companies to explore a combination of capital and debt structures in their balance sheet to model for the best liquidity outcome. The debt scheduler functionality allows companies to model their debt instruments, enabling finance teams to make critical decisions for their business survival and long-term success.

Pre-Built Reporting and Analytics Tools:

Oracle EPM Cloud’s Scenario Modeling offers a comprehensive set of pre-built financial statement reports for income statements, balance sheets, and cash flows. By utilizing the pre-built financial statement’s structure and customizing it to a company’s specific chart of accounts, economic analysts and planners can quickly assess the impact of changes made to each scenario.

The system automatically balances these financial statements, providing instant feedback on the impact of changes to each scenario. Interactive dashboards and advanced reporting within EPM Cloud facilitate real-time analysis and report distribution, enabling effective communication of not just the numbers in the model but also the thought process behind them. With reporting and analysis available via a web browser or the familiar SmartView for Microsoft Office interfaces, EPM Cloud’s Strategic Modeling simplifies financial analysis and distribution for businesses of all sizes.

Contact Datavail to Take Advantage of Scenario Modeling in The EPM Cloud:

In today’s rapidly changing business environment, digital connectivity and cloud-based solutions have become crucial for businesses of all sizes and industries to ensure seamless collaboration and business continuity. The ability of finance teams to use cloud-based scenario modeling software, such as Oracle EPM Cloud, is essential to monitor and navigate crises effectively.

The solution’s pre-built reporting and analytics tools, including advanced reporting, interactive dashboards, and real-time analysis, can empower finance organizations to make proactive decisions and maintain liquidity in times of uncertainty.

Oracle’s Enterprise Performance Management (EPM) Cloud combines market-leading applications with cloud-based delivery to help organizations unlock the best business potential possible. Learn more by downloading our latest whitepaper, “Stop Budgeting Like It’s 1999: Oracle EPM Cloud Planning and Budgeting (PBCS) to the Rescue.”

Datavail’s expertise can help businesses maximize the ROI of their Oracle technology investments and plan for migration to the Cloud. By leveraging these tools and services, companies can ensure resilience and agility and stay several steps ahead of their competition. As remote work continues to become the norm, organizations must adapt and invest in modern solutions to remain competitive and navigate future uncertainties. Get in touch with our team of experts to learn how Datavail can help  move your business forward.


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