Question

Discuss how more sophisticated simulation and Crystal Ball can be used to address complex business issues.

Answer 1

The complexity of the modern enterprise has made that technique less effective as relationships with partnering companies grow more complex and interdependent and data more transitory and intertwined. Time is now the biggest factor in capturing accurate snapshots of the status quo, and technology strangely has been more of a barrier than an accelerator of communications between partnering companies.

Crystal Ball Suite is the simplest and most complete tool for Monte-Carlo simulations + optimization +time-series forecasting for Microsoft Excel spreadsheets and models. Crystal Ball automatically calculates thousands of different "what if" cases, saving the inputs and results of each calculation as individual scenarios.Analysis of these scenarios reveals the range of possible outcomes, their probability of occurring, which input has the most effect on your model and where you should focus your efforts. Furthermore, with the Crystal Ball Professional you can use data from a variety of sources, including your ERP , Data Warehouse, Business Intelligence, etc. to :

• Build sophisticated time-series forecasts (for sales, product demand, production requirements, etc.) using CBPredictor.
  
• Optimize simple and complex multi-variable models and spreadsheets i.e. Maximize Profit, Minimize Costs, Maximize NPV, Eliminate Production Waste, etc. with OptQuest.

The complexity of the modern enterprise has made that technique less effective as relationships with partnering companies grow more complex and interdependent and data more transitory and intertwined. Time is now the biggest factor in capturing accurate snapshots of the status quo, and technology strangely has been more of a barrier than an accelerator of communications between partnering companies.

OptQuest is an optimization tool that runs with Crystal Ball. As an add-in to Crystal Ball, OptQuest enhances simulation models by automatically searching for and finding optimal solutions. At the basic level, OptQuest selects a value for each decision variable, enters those values into your spreadsheet, runs a Monte Carlo simulation on the spreadsheet, records the results, and repeats the process. With OptQuest, you can determine the best combination of decision variables that yields the results you are seeking!

Simulation now supplants forecasting. Today, complex models may be altogether nonlinear. Butterfly effects caused by slight disruptions, shortages or slow decision-making in the moment, for example, can rapidly oscillate into serious performance downturns. Effective models of business operations as well as performance simulations -- far more complicated to build and utilize than mere forecasts -- are mission-critical tools today.

In-house simulation of a business's operations -- with its intricate and expensive modeling and data support requirements -- is tough enough.

As more companies enter into partnerships, the data needed to run simulation models is no longer sourced in house but from partnering companies. Simulations that can project tomorrow's status quo -- and the impact of possible methodology and technology changes -- just can't be fueled entirely from home base; they need critical input from outside partnering systems. And, increasingly, the shelf life of that input is decreasing as lead times shrink along with reliability of those numbers from outside the company.

If a business model needs fresh numbers now to feed a planning simulation, then the numbers from partnership companies are likely to be from simulations as well.