Scenario Analysis

Abstract

Scenario Analysis or Scenario Planning is a tool for project, programme and portfolio uncertainty management.

Since its origin in the mid twentieth century, scenario analysis or scenario planning has developed from a fairly qualitative methodology with close ties to game theory, to a more qualitative tool. In the same period, scenario planning has possibly also become increasingly important, in an era where innovation and disruption has had everyone looking for the next way to flip over the table in the ever-changing market. (Amer, 2012) It is in the same instance that scenario planning becomes most valuable by enabling organisations to prepare for whatever the future might bring, thus not merely offering a better chance of surviving potential dramatic changes by mitigating risks, but in some cases also take advantage of said changes.

Scenario planning will help putting the process at hand into perspective, and enable to set success criteria for the end date (if project) instead of now (Tonnquist, 2009). It aggregates various projections of technical and non-technical factors into a consolidated overview of plausible futures, thus allowing for broader as well as more profound consideration of the future environments that may emerge. (Ford, 2012)