The Importance of Aligning IT With the Business for Modeling and Scenario Planning

by Simon Tucker
October 16, 2008

If the company found that an increase of $x per gallon in fuel prices would have a devastating impact on the company, they could decide to increase buying of fuel contracts to guarantee prices, or invest in more fuel-efficient vehicles. They also could change the way they do business, such as transporting via rail as opposed to road. Whatever the decision, modeling and scenario planning arm the company with the information it needs to potentially survive otherwise unforeseen circumstances.

Planning for what might not happen is as important as planning for what you expect to happen. Being prepared, aligning the enterprise around a common set of goals, and having the ability to turn the business into an agile organization that can quickly adapt to change is vital to its success. Many people from across and down the organization are involved in modeling the business and testing different scenarios.

However, this vital process can be achieved only if CIOs and IT management are allowed to have open communication with the business and build a robust IT infrastructure to support a common set of assumptions, drivers, and data that are accessed using the latest EPM solutions.