Two tools, different purposes
Financial forecasting projects a single expected outcome based on historical data and trends. It answers: "What will most likely happen?"
Scenario planning explores multiple possible outcomes by varying key assumptions. It answers: "What could happen — and how should we prepare?"
When to forecast
- You have reliable historical data
- Conditions are relatively stable
- You need a baseline for budgeting
When to use scenario planning
- You're entering a new market or launching a new product
- External factors are unpredictable
- You're evaluating strategic choices
- You need to stress-test your assumptions
The best of both
Smart businesses use both. Start with a forecast as your base case, then create scenarios around it. Scenarity is built for exactly this workflow — start from a realistic base and explore alternatives.