What is Business Simulation?

Business Simulation is a training tool, which uses computer based simulation that simulates an industry. If used along with selective intervention by faculty, the tools gives a practice session to understand strategic imperative in risk free simulated environment.

Business Simulation simulates business environment. Teams comprising of 5-6 participants each form different companies that compete in the market for same product. The market is split into many segments. Each segment demonstrates specific behavior in terms of price, quality, service and product expectations. Various teams try to enter this market by investing predefined capital raised through equity capital. Market demand is met by various teams by taking decisions regarding what to produce, how much to produce, how to promote, who will make it etc. Based on demand and availability, companies would perform differently leading to profit / loss, inventory built up/ stock out, cash surplus / deficit etc., all of which eventually impact the share price. Computer program controls the market behavior and calculates the performance of each team.

Role of faculty in Simulation

Faculty assists by helping participants understand various aspects such as understanding strategies in the area of marketing, finance, production and HR, help them understand dependence between each other, help them connect the vision, strategy to actual decision, help them to understand group decision making. Faculty can constructively intervene by helping the team recover from troubled status if they have taken incorrect decisions.

Entrepreneurship Development Program that uses Simulation augments the game by talks in the area of finance, legal and governmental requirements in India, and introduction to basics in marketing management, supply chain management, information management etc.

Why Simulation?

(1) Simulation is risk free environment :

Being prepared to handle any kind of eventuality, being aware that situations can run amok and quickly, foreseeing potential traps - the knowledge of these business elements favor the experienced. Using business simulations gives participants the basics on running a business - profits, inventory costs, employee costs, production costs, to financial analysis, strategic thinking, operations, market analysis, leadership, company structure, and teamwork. Each mistake and "failure" offers one more notch of discovery for each person. Each counter action to correct mistakes allows each person to explore their own potential and creativity.

(2) Simulation highlights impact of collective decision making :

Being able to analyze challenging and varying situations and choosing to make a hard and fast decisions or extend a softer direction is essential for good business tactics. But, decisions about company matters aren't the only aspect to good business. People working together don't always have the same ideas on how to accomplish the same thing. They have to learn how to work together and use the best strategies. Communication, teamwork, and productive leadership are fundamental to having a successful business. SiDrive highlights this learning as the participants discover implications of their decisions.

(3) Simulation focuses on strategic decision making :

Many functional leaders / technocrats are highly operational. Although importance of effective operational excellence is not to be ignored, strategic decision making plays on interconnections of various functions. Computer based decision, gives lot more focus on data analysis, data application and fact based decision. It disconnects action however highlights impacts of decisions on potential action ( such as loss of average productivity due to bad wage decision).

(4) Simulation gives hands on practice of decision making :

As participants analyze their financial statements and reports, they get hands on practice for reading and using data (particularly financial data) in effective decision making. If played for five or more rounds, it also develops understanding related to analysis of trends and long term impact of decisions.

(5) Simulation encourages development of entrepreneurial ability :

As participants run their companies, they understand what it takes to run a business, that they are responsible for their decisions. They realize that they have to handle the consequence of their decisions since they are running their “own” company. They also discover importance of managing profits and cash, importance of developing products that respond to market needs, the need to reach out to customer etc. If the training program is concluded by conducting a mock AGM, participants get real flavor of how shareholders react to their decisions.

Simulation Based Programs by Enhance and Excel:

Enhance and Excel can support organizations with simulation based program in various ways.
1. We have faculty with long IT experience, so that nuances of any software is effectively handled by the faculty
2. We have faculty with experience in industry in various areas and hence can act as effective facilitator
3. We have faculty trained to use following simulations -

• Executive : Simulation by April Training Executive Ltd. that uses European car market.
  
  
• Capstone® : Simulation by Management Simulations Inc that uses electronic sensor industry market.
  
  
• SiDrive : Simulation developed by Global Solutions, Pune that can be configured to any industry.
  

4. We can use simulation as a training tool, as assessment tool in development center as well as a platform for competition.