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April 30, 1997updated 05 Sep 2016 12:01pm

WAR-GAMING: THE FIRST STEP TO BECOMING A CYBERCORP

By CBR Staff Writer

This article is taken from Multimedia Futures, a sister publication.

In the past, if a company wished to hone its managers’ competitive marketing and strategic planning skills, it would probably send them out of the office to shoot paint balls at each other, listen to longwinded lectures and get drunk. While the drinking and physical activity still remains, multimedia-based virtual computer warfare is increasingly becoming a weapon in the campaign to improve managers’ business insight and skills.

By Paul Briggs

Companies today have little qualms about investing in computer simulations for product designs, manufacturing and processes, says Raymond Capece, president and chief executive of business simulation vendor Powersim Corp. But often, its managers are learning on-the-job and that’s a high risk proposition, especially when fresh MBAs are hired with little operating experience, Capece adds. Capece believes the only way to get ‘compressed experience’ is through business simulators or ‘War Games’, as they are known. He says: The companies that invest in them, place a high value on the notion of flight simulators for business. They are used to encourage managers to try high-risk scenarios within the safe environment of the computer. Unlike traditional forms of market trend spotting, Powersim believes business simulation tools can help to predict multiple business scenarios many years into the future. Similar to a type of clairvoyant-inspired disaster recovery plan, it can prepare a company on how to react if, for example, earthquakes affect memory prices or workers go on strike. This is an important weapon in top management’s arsenal, according to information technology industry guru James Martin, chief executive and founder of James Martin & Co. In his book, ‘Cybercorp: the new business revolution,’ Martin says that Dutch oil giants Shell Oil, were better prepared for the OPEC oil crisis in the 1970s, than its rivals, because it had explored, through simulation, what it would do if such a situation occurred.

Astounding improvements

Research by the US Department of Defense has revealed that interactive multimedia produces ‘astounding improvements in learning’. Compared to traditional methods of learning, such as classroom based training or video-based learning, the research discovered that multimedia tools cut training times in half, increase skill mastery by 45%, improve comprehension by 50% and improve consistency by 35%. While most business simulation tools on the market are still on conventional media, such as CD-ROM, Powersim’s products are Web-based. Called Metro, the tools are aimed at management consultants and fortune 500 companies that want to use a games structure for decision support, training and communicating new strategies via the Inter/Intranet. In contrast to the expense of sending management off-site for a few days, the cost savings of accessing business simulation tools via the Web is significantly lower and can be rolled out to a wider number of staff. But the real benefit of a Web-sim is that it’s like a 24- hour personal trainer that a manager can turn to and try things without any fear of embarrassment. The banking sector is one industry that is reaping the benefits of training staff with virtual business simulation software. In the past, financial workers, especially commodity brokers, were often dumped in front of personal computers and told to make money. Although most received, relatively, expensive but patchy training, this sink or swim scenario often lead to expensive mistakes. But today, more and more financial institutions are turning to multimedia to gain a competitive advantage. California-based KeyCorp, one of the US’s largest financial services companies, recently adopted a multimedia based training project with Omega Performance, to boost its staff’s selling skills. It did this by creating a virtual bank simulator. Executive vice president for KeyCorp’s consumer banking group, William Hann says that interactive multimedia will permanently change the competitive landscape in financial services. Robert Jones, vice president for community banking at KeyCorp says the project is not merely a fad – he believes this kind of simulation is: our future as a bank. Tools vendor Cognos has also recently launched a series of initiatives to help business managers make better decisions. It has based a virtual company game around a management book, entitled ’24 ways to impact your bottom line in 90 days.’ The book details how business intelligence software tools can monitor performance. Like Powersim, players become managers of a fictional company. In this case, a multinational car manufacturer. The object of the game is to juggle marketing, production costs and retail prices to make your company a success. To test the managers planning ability, players are also given added hazards of trade union disputes and supply shortages. Profitability ultimately decides the winner. But industry guru James Martin warns that software alone, will not provide the silver bullet solution needed by businesses in the run up to the Millennium and beyond. Martin encourages corporations to move into what he calls ‘Cybercorps,’ a corporation designed for the age of cyberspace, realized by the increasing adoption of the Internet: For real improvements you must address practices, plans, incentives, and relationships. Success is not dependent on a software problem as much as a change program.

Symbiosis of information

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In his book, Martin stresses that for corporations to survive into the next millennium they must think in terms of ‘Cyberculture.’ This is realized through a symbiosis of information and people. With the rapid growth of technology, there is so much training to be done and not enough teachers to teach it, says Martin. Within the cybercorp framework, knowledge is money. Corporate wealth grows, says Martin because employees work smarter. This can often be achieved by empowering staff with fast, cheap and effective multimedia training and business emulation tools. Martin sees the next ten years to be fundamental in the change to provide virtual education via the web. He believes there will be such a massive rise in web-delivered education that it might threaten the traditional ways of delivering education. Both Martin and Capece agree that putting educational material in a ‘games’ format does have great potential for learning. But Capece doesn’t see a mass migration of developers crossing the chasm to develop business games because a certain expertise in business studies, management training, strategy scenario is required. However, he concedes that the input of games programmers to business simulation software is essential to success in the market. To this end, Powersim is hiring some high-end games programmers for the development of the next generation of its products. It is also looking to partner with games firms and Internet Service Providers, like America Online. In a typical scenario that is becoming a familiar sight across the US, managers at off-site meetings are increasingly war-gaming, using business simulation tools on computers as a crucial part of the evening’s entertainment. In the past, the day’s lecture notes and instruction might have been ‘filed,’ and probably forgotten after a few weeks back at the office. Nowadays, managers are implementing business strategies, or war gaming learnt during the day to virtual scenarios at night. Why? Because they are having fun, says Capece.

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