Scenario-based Project Management and What-If Analysis
Learn how we apply a what-if analysis to objectively evaluate and contrast potential future outcomes in data project management.
In IT data project management, not everything goes according to plan. You may spend as much time as you want coming up with a beautiful, doable, and practical plan, but in the end, you’ll almost always have to deviate just a little bit from it due to external factors.
Such events may have significant financial and time implications for your project if you aren’t ready for them. But if you can guess what will happen, you can take steps to make bad things less likely to happen and to lessen their impact if they do.
The meaning of “what-if” analysis
We use what-if analysis to think about portfolio of projects and how changes to those projects or alternative plans for those projects can affect the overall picture, including capacity, workload, and team utilization. The purpose of a what-if analysis is to provide insight into the potential outcomes of alternative business strategies, rather than relying on the status quo.
Knowing these potential outcomes allows you to prepare for them and mitigate their effects.
There are several points throughout a project or portfolio of projects when a what-if analysis might be useful. It’s essential to do so before starting any task, and it may also happen at major checkpoints along the road. If anything has changed from the initial plan, this permits project managers to reevaluate previous estimations and do new analyses.
Just exactly are “what-if” scenarios?
We use what-if analysis for anything from predicting the results of a delay in completing a job to planning for more complicated situations involving several variables.
Examples of typical “what if” situations are:
- What if crucial assets are not accessible when we need them or when we anticipate getting them?
- If a new project comes in, what happens then?
- Is it possible to replace these folks with fresh ones?
- What if we outsource some of the work on this project?
- What if certain steps or jobs take more time than we anticipate?
- How will the completion date change if work continues at the present pace?
- Do we speed up the process or put in more hours?
- Is there a plan if the actual cost of a project exceeds the estimated cost?
- Project managers may make necessary adjustments to schedules and budgets, or come up with alternative plans, in response to these sorts of queries.
Traits of a reliable scenario analysis
Imagination and originality are necessary for what-if analysis. Two possible outcomes, best and worst, are shown. Don’t simply focus on the most probable conclusion of a given circumstance; think about all of the other possibilities.
Involvement of relevant parties (or stakeholders). Project managers would be wise to seek the input of team members and subject-matter experts in order to gain a more nuanced understanding of the possibilities and potential consequences of various scenarios. Scenario summaries benefit greatly from the inclusion of historical precedents for “what if” scenarios.
Objectivity. When considering alternative outcomes, it is crucial to maintain an objective perspective. It’s better to take an evidence-based approach and be realistic about a scenario’s potential effect than to wish it wouldn’t happen or minimize its significance.
Importance of What-If Analysis and Its Benefits
1. Taking into account potential factors
A project manager may better anticipate potential problems by playing out “what if” scenarios. There is a good chance that a project won’t go off without a hitch, so it’s important to be prepared for the worst.
2. Having more reliable grounds for choosing
If a “what if” situation really occurs, without proper preparation, the project might be set back significantly as management figures out how to handle the unexpected complication. It’s stressful, and that might affect your judgment.
However, project managers may propose well-informed courses of action that best deliver on project goals with the rigorous analysis done at a later time.
3. Mitigating factors.
By preparing for such “what if” situations in advance, a project manager may lessen or eliminate their influence on the final product, should they occur.
Ironically, scenario planning may lessen the probability of such events occurring and increase the possibility of a project’s success.
4. More accurate forecasting of project outcomes
Uncertainty and unpredictability are inherent qualities of project variables. On the other hand, if you speculate and foresee potential changes to the project’s outline, you may increase its predictability. Project outcomes may be planned for with the use of variables.
Forewarning of a scenario’s potential consequences is one such way. Stakeholders are familiar with the effects of this situation and can anticipate what will happen if it comes to pass.
5. Complex and simple elements are analyzed in depth
What-if analysis may go on forever since it deals with what-ifs. Scenario managers might think of little changes to key aspects of a project or large, intricate ones.
The level of detail in your what-if analysis may be modified dependent on the difficulty or importance of the project.
6. Better financial planning
Project managers may use scenario analysis to see how different factors will affect the overall cost of a project and how best to approach it. Having this information at their disposal will allow them to make more informed judgments about other areas of spending.
For instance, if a project manager believes there is a high likelihood of a variable happening that would cost a lot to fix, they may decide to cut down on wasteful expenditure elsewhere to ensure they have the resources to cover this expense if it becomes required.
To sum up
What-if analysis has shown to be a very useful tool in data project management, allowing for better strategic planning to be implemented in the face of unknowns. Even when things don’t go according to plan, project managers may still meet their goals by taking into account all of the possible factors and how they could affect the project’s outcome.
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