Scenario Planning: Building Agility in Volatile Markets

The last few years have tested even the most experienced finance leaders. Many of us have had to manage inflation volatility, cost pressures, and rapid technological change, often at the same time. In this environment, the traditional annual budget simply cannot keep up. 

We believe that CFOs now need a different kind of planning capability. Scenario planning is no longer a theoretical exercise or something that happens once a year. It has become a living process that enables finance teams to react to uncertainty with confidence, not fear. 

A new era of volatility

Across the UK, CFOs are facing conditions that shift faster than our planning cycles. Interest rates are moving again; global supply chains remain fragile, and regulatory expectations continue to grow. 

According to Deloitte’s UK CFO survey, more than 70% of finance leaders now rank economic uncertainty as their biggest risk going into 2026. That figure alone tells us that the world has changed. Plans built on static assumptions can no longer guide decisions in this kind of environment. 

Scenario planning allows CFOs to build flexibility directly into the decision-making process. It helps us prepare for what might happen, rather than react after the fact. 

Moving beyond “best case, base case, worst case”

We often see organisations limit their scenario planning to three outcomes: best case, base case, and worst case. This is familiar, but it is not enough anymore. 

The reality is that volatility rarely fits into three neat boxes. Costs shift by percentages, not by binary events. Market demand fluctuates unevenly across regions or product lines. 

Modern finance functions are adopting what we call rolling scenario portfolios. These are dynamic, data-driven models that are continuously updated as new information becomes available. Instead of building new models from scratch, teams adjust assumptions and re-run simulations at the touch of a button. 

This approach provides a much clearer view of how a small change in one driver can ripple across the entire business. It helps CFOs understand not only where the risks lie, but also where opportunities may be hiding. 

Laying the foundation with clean, connected data

Scenario agility depends entirely on data. Without a solid foundation, even the best analytical models will collapse under their own complexity. 

We believe that most large organisations underestimate how much their planning speed is held back by disconnected systems and inconsistent master data. We still see finance teams trying to run scenario models on spreadsheets fed by multiple ERP instances, with no consistent data definitions. 

The first step toward modern scenario planning is to create a single, unified data environment. This usually means integrating the ERP, FP&A, and business intelligence platforms so that actuals flow automatically into the models. 

When the data is clean and connected, the finance team can: 

• Refresh assumptions instantly when new data arrives. 

• Reconcile actuals and forecasts automatically. 

• Share scenarios across finance, supply chain, and commercial teams without manual intervention. 

This kind of integration removes the lag between what happens in the business and what finance knows about it. 

Using AI and analytics to make planning smarter

Artificial intelligence and machine learning are now starting to change how finance teams build and test scenarios. Instead of manually adjusting every variable, predictive models can identify relationships, forecast drivers, and generate new combinations of assumptions automatically. 

For example, we have seen organisations use AI to model how energy prices, exchange rates, and supplier costs interact. These insights help CFOs and their teams understand which factors have the biggest impact on margin and liquidity. 

That said, automation will never replace human judgment. We believe the best results come when AI and experience work together. Machines can test thousands of possibilities, but it still takes the finance team’s insight to decide which scenarios matter most to the business. 

Bringing governance and discipline into the process

Scenario planning only creates value when it leads to better decisions. For that to happen, CFOs need to embed it into the organisation’s governance framework. 

This means making scenario planning a regular part of performance management, not an ad-hoc exercise. The most effective teams establish: 

• Clear ownership of model maintenance and updates. 

• Regular review cycles that align with board and executive meetings. 

• Direct links to action so that decisions such as hiring, pricing, or capital spending can change quickly when a scenario shifts. 

• Auditability and documentation that show where data comes from and how assumptions were built. 

Some companies have gone as far as to formalise a Scenario Governance Framework. We think this is a smart move, because it builds consistency and credibility, particularly in complex organisations where multiple teams are running their own models. 

Technology that enables, not complicates

The right technology can make scenario planning faster, more reliable, and more transparent. But the answer is not always to buy more software. 

From our experience, success comes from having systems that talk to each other and support the right process design. Cloud-based planning platforms, when properly integrated with ERP data, can automate much of the heavy lifting. Driver-based models can show instantly how operational changes affect financial outcomes. 

However, even the best tools will fail if data structures are poor or if workflows are not properly designed. We believe that building good data design and governance into the system architecture from day one is far more important than customising every feature. 

When technology, data, and process align, scenario planning becomes part of everyday business rhythm rather than a quarterly stress exercise. 

Building the right skills and mindset in finance

Technology alone cannot make finance more agile. Teams need to think differently about how they use data and how they respond to change. 

We encourage CFOs to invest in three areas: 

1] Skills: Give FP&A teams access to training in data analytics, scenario modelling, and data storytelling so they can interpret insights effectively.

2] Collaboration: Create cross-functional planning groups that include finance, operations, and commercial leaders. When everyone contributes to the same scenarios, alignment improves dramatically. 

3] Culture: Reward adaptability and curiosity. Teams that can test and learn quickly will always outperform those waiting for perfect information. 

Scenario planning should feel like a continuous conversation about the future, not a one-off task for analysts. 

From resilience to advantage

For many CFOs, the next stage of finance transformation is not just about surviving volatility but turning it into an advantage. 

We believe that organisations that can model multiple futures quickly and accurately will make better strategic choices. They will be able to allocate capital faster, anticipate disruption earlier, and give their boards confidence that decisions are grounded in data, not instinct. 

Scenario planning, when supported by the right systems and governance, is how finance becomes a proactive partner to the business. It shifts finance from “reporting the past” to “navigating the future.” 

Key takeaways

• Treat scenario planning as a continuous process, not an annual task. 

• Build on a connected data foundation integrated with ERP and operational systems. 

• Use AI and analytics to enhance the team’s judgment. 

• Establish governance that ensures consistency and trust in the outputs. 

• Develop the skills and culture that make agility sustainable. 

 At Positive8, we believe that finance should lead the organisation through uncertainty, not simply react to it. By combining sound data design, practical system integration, and strong governance, CFOs can build scenario planning capabilities that make their businesses both resilient and ready for opportunity.