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Using econometrics to Bolster scenario planning
Scenario-based planning using econometric analysis can enhance the competitive advantage of a business and position an organization to be better able to adapt to an ever-changing business environment.
Worries over the future of the eurozone have been a consistent theme in the CFO surveys conducted globally by Deloitte’s member firms. A European Union member exit is only one possible outcome of the euro crisis, however. Others include a drop in the value of the euro, a complete breakup of the currency union, or a continuation of the current volatility. Each scenario could impact business strategy and operations not just in Europe but around the globe.
For CFOs, examining the impact of these possible outcomes requires a robust scenario planning process.
In this issue of CFO Insights, we discuss the four key phases of scenario-based planning and how econometrics analysis—the application of statistical techniques to analyze economic data—can be used to help CFOs and their finance teams establish effective, action-oriented processes.