Scenario Planning: It Is No Longer a Question of Why, But When

I recently had the opportunity to do a joint webinar with one of my customers, Mr. Henry Tjan, Head of Global FP&A at AirAsia Expedia.The Anaplan story at AirAsia Expedia, a joint venture of AirAsia and Expedia, is a great one. Using Anaplan, they have moved away from the manual process of spreadsheet-based planning in favor of implementing scenario-based planning using the power of Anaplan’s in-memory platform, purpose-built for business users to manage massive volumes of data and turn the complexity of business operations into powerful models—in real-time.

Three years ago, the two travel (Expedia) and holiday (AirAsia) companies recognized that the Travel Business industry had huge potential to grow and partnered up to claim their share of the market. As a growing enterprise, they became aware all-too-quickly of the limitations of using spreadsheets as a business planning and forecasting tool.

Too much data!

Some spreadsheets used for Budgeting and Forecasting became as large as 30-40 megabytes in size. It became increasingly difficult to share and consolidate the plans from various regions at the corporate level.

Real-time what-ifs required

Between point of sales, line of business, and various channels, the business planning processes were becoming increasingly complex. In addition, there were complexities around converting Book Revenue into Stay Revenue. The travel industry is extremely volatile, and as such, is often vulnerable to unpreventable scenarios like the following:

  • International disputes (e.g. decreased transactions with China because of ongoing conflicts with Japan over water rights)
  • Illness and disease (e.g. H7N9 bird flu or H1N1 influenza)
  • Variables or unpredictability in finance (e.g. the state of the Foreign Exchange Market or credit card fraud)

Too much planning overhead

The AirAsia Expedia FP&A team was also aware of another troubling phenomenon: they were spending lot of time on planning processes such as forecasting, long-term strategy planning, outlook, and year-end estimation. In fact, they were planning and planning and planning all the time – leaving no time for analysis.

Given the above situation, Henry realized that spreadsheets would no longer be able to meet the requirements of the various business scenarios the FP&A team was dealing with. He started looking at other solutions but he didn’t have the option of a huge capital investment, which is required by traditional on-premise planning solutions. He also couldn’t spare the resources that were necessary for the implementation of a new planning system.

Then, Henry heard about Anaplan. He met up with Anaplan team and shared some of his processes with them. Within couple of days, Anaplan got back to him with an Anaplan model containing the AirAsia Expedia processes and data. This gave Henry and his team the confidence they needed to decide that Anaplan was the solution they needed.

As Henry states “It really worked. Anaplan was not too different than what my business users were doing.” The platform was easy to adopt and the team actually enjoyed using it: “they were always happy to put their plans and figures into Anaplan.”

The best part was, AirAsia Expedia didn’t have to pay a huge upfront cost. Because Anaplan uses agile methodology for every deployment, models can be built for less money and in shorter amounts of time. The very first Anaplan model AirAsia Expedia built took just 6 weeks to complete.

Once basic planning processes such Budgeting and Rolling Forecasts were set up in Anaplan, Henry explored using it for Scenario Planning so that various scenarios could be built into the plans.

Scenario Planning involves identifying key factors such as online transactions, various scenarios (grow, hold, shrink), definition of trigger (such as Forex rates), and threshold trigger parameters for each of the scenarios. Below is an illustration of how it was applied at AirAsia Expedia:

Henry led AirAsia Expedia away from the legacy environment of spreadsheets and manual planning to modern scenario-based planning using the power, immediacy and connectivity of Anaplan’s in-memory platform.

To learn more about Henry’s experience implementing scenario planning with Anaplan, get your headsets on and use this use this link to listen to recording of our recent webinar featuring his story.

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