The value of scenario planning and answering the "What-if" question

Part 2 of a series on developing integrated analytical planning tools

By Martin Karm and Simon Massey

As our technology capabilities improve, so too should our analytics for solving complex problems and making informed investment decisions for growing cities and planning infrastructure. Drawing on our experience developing smart scenario planning tools for School Infrastructure NSW, we are publishing a series of thoughts on making the move into the integrated analytical space including why and how such moves make for better and more informed decisions about urban development and infrastructure investment. We don’t purport to be experts on the topic, rather, by articulating our thoughts we hope to learn from others experience through the discussion it creates.

In part two of this series (you can read part one here), we will examine scenario planning principles and how they informed the development of SINSW’s integrated data analysis platform. In particular, we will describe the need to keep coming back to the question “How will this data analysis enable better decisions?”

What is scenario planning?

Scenario planning has its roots in military strategy, but has recently begun receiving increased focus by government and business to assist with decision-making processes. Scenario planning quite simply seeks to answer the “What-if” question by effectively capturing complex social, economic and political interactions in rich detail. Furthermore, it seeks to present these interactions in a form that are easy to grasp and challenge the prevailing mindset.

The application of scenario planning principles in system design:

At School Infrastructure NSW, we have applied the principles of scenario planning in our School Planning Assistance [SPA] tool. The SPA tool is a web-based application, developed in partnership with SGS Economics and Small Multiples. The tool enables planners to test a range of school infrastructure possibilities, including where and when to build new schools, and how big to upgrade existing schools. The SPA tool seeks to implement scenario planning by simplifying data into a limited number of possible states with each scenario telling a story of how various elements might interact under certain conditions. Ultimately, scenario planning for schools aims to remove under-prediction and over-prediction of change, and stimulate school planners to consider alternatives that they otherwise may not have considered.

A visual representation of scenario planning:

The SPA tool enables planners to test infrastructure solutions, such as building a new school in Location A, or expanding / upgrading School B. As depicted in Figure 1, the No Asset Intervention map (bottom left) displays the relationship between demand and supply assuming all schools remain the same size, while Option 1 (bottom right) displays a revised demand and supply with the construction of a New School at Location A (purple). The maps highlight that the new school reduces the demand pressures in the eastern side of the cluster, while the line graph (Figure 2) indicates that the new school meets demand requirements through to 2027, but that further interventions will be required to meet demand through to 2032.

Figure 1: Illustrative extract from School Planning Assistance [SPA] tool

Figure 2: Illustrative extract from SPA Tool, Demand vs Supply across a School Cluster

The key learning from our development of integrated data analytics tools:

The SPA tool process taught us that the most important question is “How will this analysis enable a better decision?” Our resolution was the ability to answer the “What-If” question. What if we placed a new school at location A – how does that change the demand vs supply equation? And does it align to the ‘hot spot’ of growth? Quite simply, we have learned that engaging visualisations don’t enable better decisions unless they are supported with a planning process that guides decision-making. Applying scenario planning principles can be a key enabler in this process.

Reading that might be of interest:

For further reading on scenario planning, we found this article by Schoemaker 1995 to be a great read (yes, we know it’s old, but has been seminal in the scenario planning space). We particularly like how it describes the use of scenario planning to help managers to remove over-confidence and tunnel vision; a risk in all workplaces. Link.