Innovative technology in business simulations and experiential learning
“Full business” simulations that model a company’s detailed operations are best suited for live, multi-day classes in which teams compete in a shared industry marketplace over several simulated years of play. In the simulated industry, company strategies can be fully developed and played out, financial and operational approaches executed, and broad business topics explored in group lectures and discussions.
But what if your learning objectives are much narrower and your time-frame very limited? Such as a 2-hour meeting with a handful of operations staff to illustrate and discuss the impact of a specific set of decisions on business results? For example, what is the potential impact on revenue over 5 years if our average price went up by $100? What if our Expenses went down by 5 percentage points? What if our Service Representatives could process 25 customer service requests per month instead of 20?
A typical full-business simulation is not well suited for this purpose. Instead, limited “What-If” simulation tools focus on a selected set of variables that can be manipulated to quickly display a projected, multi-year business result shown in familiar company metrics. This type of tool can be very effective in demonstrating the long-term effect of day-to-day decisions and “my potential impact” on business results. A What-If Tool is a sophisticated “whole-business calculator” that presents the user with a limited set of variables. In a staff meeting or even individually, users can engage with this calculator to examine scenarios that illustrate how specific actions (or lack of action) affect real world business results.
As an example, PriSim recently developed a Claims What-If Tool to help demonstrate the impact that insurance claims and service operations have on an insurance company’s bottom line. PriSim has also developed What-If tools for mortgage-banking loan originations, aerospace and defense Return on Invested Capital and Estimate at Complete calculations, and for motorcycle dealerships. (Follow this link to see a work-in-progress web version model of the insurance claims tool.)
Multiple scenarios can be developed and quickly analyzed using a What-If Tool. These scenarios are highly effective in creating “ah hah!” moments and illustrate the ramifications of actions on specific, real-world business results.