The first business simulators were created during World War II by defense contractors trying to figure out how to meet impossible deadlines for the war effort, says Ritchie-Dunham. These early simulators were little more than project-planning maps and flowcharts created by hand.
Since then, computers have been applied to the process. Electronic spreadsheets, for instance, simulate the effect of changing what-if scenarios in accounting, says Barry Richmond, president of High Performance Systems, a Hanover, New Hampshire, simulation software maker.
The introduction of more complex issues into simulation came, oddly enough, from a computer game called SimCity that was intended to be used for entertainment. Shortly after Maxis Corp. debuted the game, which let players simulate the growth of a metropolis, businesspeople began approaching the Orinda, California, company about creating a simulator for real-life businesses.
John Hiles, founder of Monterey, California-based Thinking Tools Inc., a maker of high-end interactive simulation software created specifically to meet that need, has seen how businesses benefit from simulation. Hiles' simulation software, which can cost anywhere from around $1,500 for lower-end software to $1 million for a customized project, is used by several Fortune 500 companies for training and strategizing. Says Hiles, "It all grew out of the success of SimCity."