February 27, 2015

Create a business-simulation: from A to Z. Part 1

Сreating a business simulation is always connected with a detailed survey of customer's needs, a thorough study of the company's operation system, and a deep immersion in the business processes, being the key to a future product. In this article, I would like to clarify this complex, but incredibly exciting process in a detailed way.

This part of the article is devoted to the objectives of business simulation and its general concept development. Please note: this algorithm is suitable for online simulations without face-to-face sessions with a trainer.
What are the benefits of business simulation?

  • People gain experience through trial and error in a risk-free environment. Making a decision in a real life leads to unavoidable consequences, since you can make any mistakes in the game and see how they affect the final result.
  • The player gets the opportunity to hone skills and knowledge gained. The game experience helps you structure theoretical knowledge and determine the most successful models of behavior. While playing, you can practice in choosing the best options for actions and decisions.
  • The game experience has a positive impact on the player's involvement and motivation.
Generally, a business simulation is quite an expensive development, thus, in most cases, it is worth creating them for 100 managers or more. It is economically sound to develop the business simulations for 1000 individual employees or more.
What goals does the business simulation pursue?

  • Train specific skills, e.g. to identify clients' needs or to decide on project resource allocation.
  • Build a holistic picture of company performance, understand working principles in different departments, their connection, and mutual influence.
  • Broadcast the corporate culture in general and in particular.
The first step of development: create a project plan
First of all, you need to identify the main target audience of the project. Then, you should identify educational goals for each segment of the audience. You need to indicate what knowledge the participants should get, what skills they should develop, how should they change their behavior after the business simulation is over.

Sometimes, one of business simulation goals is the employees' assessment. It may include the knowledge and analytical skills of the participant. The evaluation of communication skills may either have a complex structure or only cover the basics. The participants progress is being assessed to improve their motivation. You may check the example of the progress assessment in the well-known "Lumosity" service. You don't get there any assessment of your skills, but you can track your progress: where you have started and how your answers (solutions) have improved during your work with the service.
Пример оценки прогресса в сервисе «Люмосити»
Пример оценки прогресса в сервисе «Люмосити»
Use limitation

It is worth paying attention to the operating conditions for a business-simulation: whether you will use it at home or in the office, on a tablet or on a laptop, what is the data flow-rate.
Off top
Historically, the main genre of business simulations is step-by-step strategies. Considering that management activities go hand in hand with finance, business simulations are often economic strategies. The player's actions are not limited in time: the player makes all necessary decisions and starts the move. At that time a range of parameters is calculated, they depend on the player's decisions and force majeure circumstances. It can be a single user or a multi user strategy: in the former case, the participant should get the maximum result without any interactions with other participants; in the latter case, it is a team game or a competitive game. The player may either be a part of a team and manage different units or play in a competitive market when each participant develops his own company. Modern business simulations use the elements of a real-time strategy when it is possible to talk to a mentor if the participant has faced any issues. Thus, the consultation time or the number of attempts to solve the client's issue is limited.
The second step: concept design
The business simulation concept should solve a range of issues

The plan of the main screens and the management areas
To identify the suitable game for the participant, you should study the subject area out. E.g. if we are talking about the management of an industrial enterprise, then we may create a model of the main production areas, starting from input resources and the technological process up to the final product. In the sphere of retail sales, we may provide the following screens: location selection map, screens for sales management, logistics, human resources, procurement, administrative and economic part.

For each management sphere, it is worth identifying and reflecting the key management parameters and macro-indicators in the concept. E.g. the key features for retail sales management are a line of goods, prices, promotions, loyalty programs, etc., as well as the seasonal factors which are beyond the player's control. Traffic, conversion, average purchase amount would be considered as the macro indicators.


A script and a plot

A script and a plot are illustrative of the initial conditions of the game, goals, player's capabilities, scenario and the result, expected after the simulation is over. Below are three examples of the script.

  • In the beginning, the player can work on a low-capacity production area. When the game is underway, the player should increase the enterprise capacity, efficiently allocate resources at each step, and plan product release and sales. The player's goal is to get the maximum profit. Some unforeseen events happen during the game, e.g. raw materials prices rise, loan rates change.
  • The player has some fixed resources: the store and a flow of customers, the last one depends on the season and is beyond the players' control. The player's goal is to manage available resources to maintain balance at every step. At the beginning of the game, the store runs at a low level, and the player's task is to debug and to improve processes, to reduce costs, to increase sales and to attract more customers. The player's success criterion is the store's profit.
  • The player has some area (region or district), where he needs to place some objects (outlets, branches, centers) with a specific influence area, costs, and indicators. When the game is underway, the player should gain the greatest influence on the given area, he should expand all available resources and allocate them effectively. The player's goal is to gain the maximum influence and get the maximum profit. Some unforeseen events happen during the game, e.g. new players may appear, the political situation may change.

Testing

The description of the built-in testing mechanism, the evaluation of advance in the participant's knowledge and skills, and the feedback mechanism. It is typically located in the player's profile and reflects the current progress and the overall result in the business simulation. If the model of knowledge assessment allows interpreting the results, then the system can provide participant's results assessment, and identify development areas and recommended activities.


Game mechanics and engagement tools

Simple game mechanics include ratings, levels, badges (various small rewards provided to the player for his activity). More complex mechanics are the tutorial scripts and training quests, that display the advance in knowledge and skills in the player's profile.


Basic game and training cycle

The game cycle is a detailed version of the game performance with its timing of each action. It helps you determine the approximate time needed to complete the game.


Evaluation of development period and costs

When you have created the concept that solves all the mentioned issues, the iterative process of the business simulation development goes into action. I'm going to talk about it in the second part of the article.
by DMITRY KOSHELEV
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