Scenario planning, as outlined in the AFP Guide, is a structured approach that complements traditional budgeting and forecasting by preparing organizations for multiple possible futures amid uncertainty and volatility. It involves developing alternative scenarios to challenge assumptions, overcome biases, and encourage critical thinking, enabling finance and FP&A teams to advise and react quickly to changing conditions. This process enhances business agility, supports proactive decision-making, and fosters cross-functional collaboration, ensuring organizations can adapt and thrive in unpredictable environments.

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