This post is about the similarities and differences, as well as the pros and cons of  scenario planning and traditional forecasting. They are (Mortlock, 2021):

Scenario Planning

       This concept is focused on how an organization can think in advance on how many different ways the future can unfold and how they can be resilient, effective, and responsive as the future comes into play. This concept also offers preparedness and enhanced flexibility to allow organizations to deal with risk and any uncertainty instead of purely forecasting. Scenario planning usually involves teams of people from different levels within the organization and provides longer-term multiple futures that are based on risks that are unknown and uncertain.

• Advantages – Scenario planning helps organizations understand effects of various events. This allows for preparation of initial responses. There is also the advantage of knowledge management.
• Disadvantages – it is an enormous process and can take a long time to create. Things could change during this time and will require adjusting. Plans will have to be put in place to deal with any changes that could impact the planning process.

Traditional Forecasting

       This concept focuses on the assumption that the future world will look much like it does now. Forecasting is not known to be creative and does not allow anticipated shifts in the organization’s environment, and this could cause challenges for the organization’s performance and strategy. Forecasting uses estimated future  business metrics such as budget, revenue, asset performance and inventory to make predictions.

• Advantages – Forecasting uses quantitative methodology and inputs to predict what will, or should, happen in the unpredictable future. It does this by interpreting any historical data found. This concept provides certainty based on known variables in the system. 
• Disadvantages - Forecasting is a for short-term plans and does not factor in risks and uncertainty. Also, because it relies on historical data it has a tendency to create gaps between the forecast and the actual.

Similarities and Differences

       The biggest differences between the two concepts are that forecasting assumes the most probably future can be calculated by observed trends that comes from the present whereas scenario planning does not see the future as something singular but as multiple futures. Scenario planning is more flexible than traditional forecasting which is more rigid. The concept to use is based on what the organization wishes to focus on and what will work better for them. Personally, I feel that predicting several future possibilities is the best way to go.

       The biggest similarities between the two concepts are that they both are a tool to help predict the future of an organization because they help organizations prepare for potential changes. They both look at present data to help determine a direction to go with their planning. Both concepts have been known to work and get good results depending on the need.

References

Calvello, M. (2020, February 14). Expect the Unexpected: Business Forecasting Makes It Easy. Retrieved from Image from Website: https://learn.g2.com/hs-fs/hubfs/forecasting-vs-scenario-planning.png?width=900&name=forecasting-vs-scenario-planning.png

Mortlock, L. (2021, May 12). Scenario Planning vs. Forecasting: 6 Questions to Ask to Prepare for a Post-Pandemic Future. Retrieved from Leadership Now: https://www.leadershipnow.com/leadingblog/2021/05/scenario_planning_vs_forecasti.html