Technology-based simulations have been a niche for several decades limited largely to specialized processes such as flying an aircraft, operating on a patient or managing disorder at a nuclear power plant. However, corporate decision makers are applying them to more and more business processes these days.
This column is an ongoing series. Every other month, we administer a brief Web-based survey to CLO Magazine’s Business Intelligence Board (BIB) on a variety of topics to gauge the issues, opportunities and attitudes that make up the diverse role of a senior training executive. For this month’s installment, respondents shared their views on technology-based simulations. Topics covered included definition, current and planned use, obstacles to adoption and impact on organizational learning. An analysis of the results suggests that training executives have a collective affection for technology-based simulations as an individual and organizational enabler. At the same time, they differ widely in both their stage of adoption and their application of these products.
Based on these results and prior IDC research, technology-based simulations are nearing an inflection point. Of the 45 percent of BIB members whose organizations currently use them, 83 percent expect this use to increase; and 41 percent of those who have not yet adopted plan to do so in the next two years. However, several obstacles need to be dealt with before this next generation of e-learning reaches epidemic proportions. (See Figure 1.)
These challenges are being addressed in earnest today and will lead to a level of technology-based simulation adoption in the corporate sector at an epidemic level within the next five to seven years. The remainder of this column focuses on the three overlapping conditions that need to be met in order to facilitate this acceptance.
Condition One: Creating a Classification System
Like many things that combine art and science, simulations are difficult to classify because the term means different things to different people. A dependable starting place to meet such a challenge is the American Heritage Dictionary, which defines the term “simulation” as a “representation of the operation of features of one process or system through the use of another [process or system].”
Borrowing from this definition, technology-based simulation utilizes hardware and software to create a system or process to represent another system or process. Technology-based simulations include three basic components—active input, a controlled environment comprising a calculative engine and a presentation layer, and output. (See Figure 2.) Recent IDC research suggests that vendors and early adopters are now framing their discussions of simulation types around these three components.
What IDC has realized in its recent surveys of and discussions with users and developers of simulation products is that what one person considers a sufficient “representation” of the real world does not necessarily meet the criteria of others. (See Figure 3.)
While the learning environment in the scenario in Figure 3 mirrors the learner’s performance environment of working in the accounting system, this scenario does not qualify as a simulation. It lacks action on the part of the user as well as output (e.g., text-based feedback on her input into the system). The picture painted by the statement above might serve as a good self-running introduction to a simulation, similar to a live demonstration.
That there was an even split among corporate training professionals suggests there is still a need for better-defined simulation guidelines. Such a need is typical of products early in their lifecycle. Market education is critical to a greater consideration of simulations when deciding on the appropriate solution to a business problem. As Clark Aldrich from Simulearn said, “good professional simulation models need to be created before approaches to creating them can be generalized.” The ability to reference such models will help address the “lack of management commitment/ understanding,” which was cited as a significant obstacle to adoption by 51 percent of respondents.
Business benefits of simulation will become implicit when potential buyers have a better understanding of what a simulation is and is not. Models help convey value, which mitigates cost objections. End user application simulations and role-play simulations are two early models that have been embraced by many corporations and are reaping the growth benefits. Others will soon follow. Engaging content that is aligned with employee job roles and learning styles (i.e., that replicates the performance environment) will be a necessity to enhance existing models and build new ones. That Corporate America has just begun to employ the 70 million people born between 1977 and 1994 will likely mean a receptive audience.
Condition Two: Driving Down Simulation Cost
Regardless of value discussion, high-quality simulations that engage learners are prohibitively expensive for many organizations. However, per-unit development costs have come down in recent years and will continue to do so because:
- Vendors offering simulation products and services have built up their capabilities and intellectual property. They have also grown their supply of templates, content and tools to lower production costs and pass through savings to customers.
- Increased participation of gaming companies or their former employees has led to greater competition among simulation products and services vendors.
- Those areas where simulations have gained traction (e.g., end user application simulations) have benefited from the economies of scale associated with large numbers of users.
At the same time, the ability to absorb simulations will increase as organizations continue to invest in bandwidth, storage and processing power. IDC’s latest IT forecasts show investment approaching the record investment levels of 2000. Such investments will help some of those who cited “lack of infrastructure” as an obstacle to simulation adoption. Applications of simulations in new areas are always associated with price premiums for customization. Many innovators will take risks by paying these premiums. Much of the intellectual capital associated with successful engagements will be leveraged to create new simulation models to serve scores of later adopters. This will help address the obstacle of “lack of quality tools and services” available on the market. Figure 4 indicates that BIB members feel such developments are already underway. Nearly 65 percent of those surveyed feel that technology-based simulations are making a significant impact on organizational learning or will within a two-year time frame. Another 22 percent are predicting a wait-time beyond two years. Only 2 percent are total skeptics.
Condition Three: Demonstrating Value of Simulations
IDC has studied examples of organizations using technology-based simulations to address learning needs varying from certifying 10,000 financial professionals at a high-tech manufacturer on a new set of accounting principles to helping senior managers at a pharmaceutical firm develop a promotion and sales strategy for a new estrogen patch. BIB members also indicated that simulations offer fairly broad applicability. They indicated that stand-alone technology-based simulations are perceived as conducive to improving technical or procedural performance (i.e., hard skills). Furthermore, they indicated that simulations are as effective as formal classroom and on-the-job training when addressing “softer” skill objectives such as “planning business strategy” and “improving personal interactions.” As diverse as business challenges are from one organization or division of an organization to the next, IDC finds that many are reaping benefits from using technology-based simulations to address their learning challenges:
- They are actionable. Some simulations, such as application simulations, marry training to the user interface. With new systems and processes of all types, new behaviors need to be taught, and old habits need to be broken. Through repetition and practice in a safe environment, an unfamiliar audience can augment its skill sets.
- They train consistently. Many procedures need to be followed uniformly, which means that people in similar job roles need to understand the systems and processes in much the same way.
- They allow organizations to train globally. When an initiative or product is rolled out to a global audience, technology-based simulations can be distributed efficiently and make training possible whenever and wherever an employee works.
- They compress time-to-productivity. Often, training for the entire organization (or a substantial part of it) must be conducted over a compressed time period.
Well-targeted simulations put an emphasis on skill application and are often more readily available than a classroom with an instructor or coach. The evolution of adaptive assessment technologies will ensure that the skills being applied are appropriate for the user, which will make learning experiences more efficient. Compressed throughput times for training are especially valuable for businesses with high turnover, such as call centers or medical centers where residents work temporarily as part of their clinical rotations.
As organizations increase their application of technology-based simulations, more business successes will be demonstrated. The result will be a positive feedback loop that results in their being more a rule than an exception in the corporate sector near the end of the decade.
Actions to Consider
Technology-based simulations will grow in importance to corporate training professionals over the next few years as these three interrelated conditions are met. Those who are not yet using them or using them on a limited basis should consider the following:
- The risk-reward ratios for applying simulations to different skills needed by their organizations.
- Distribution as a portion of a curriculum that involves facilitation of a live instructor.
- The costs and capabilities associated with producing, maintaining and updating technology-based simulations—both in-house and outsourced models.
- The ability of existing IT infrastructure to accommodate simulation engines and content.
Michael Brennan is program manager of learning services research at IDC, a global market intelligence and advisory firm. George Kao is principal consultant at MTSCG, a learning technologies consulting firm. Send questions and comments to firstname.lastname@example.org.