Business Simulation: what it can and cant do.

Theres an excellent essay by Bill Rosser on business uses of simulation and comments on it, both from Gartner Inc.

Rosser says that business simulation is about to catch on: “We are on the brink of major change…. developments that enable much-easier human comprehension and a demand for superior performance… A substantial number of vendors of all sizes are vigorously pursuing business modeling (50 to 100, including IBM and Microsoft)…”

His list of lessons is very interesting:
“Simulation for the sake of simulation is worthless”
“Simulation must be easy for people to grasp”
“A duplicate of the real world is not useful… A narrow focus on improving some business performance aspect can be productive.”
“failures have occurred predominantly because the process was not adequately understood. …much system behavior is counterintuitive.”

He also draws up four scenarios, ranging from simulation in high-level strategic planning, to lower level uses of intelligent agents in CRM , etc., to disillusionment

This was published in July 2004. Sadly Ive only just seen it (thanks to a GoogleAlert received three days ago…….?) and it doesnt appear to have generated any external comments (except mine.)

This is a sensible essay and everyone interested in simualtion should read it.

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