Deloitte is using simulation technology to plan its future
An AI solution to cut through the noise
For centuries, the business world has grappled with an important question: how can we make the most of our potential?
Just like in life, different business decisions lead to different outcomes. A choice here means a road not travelled there. Often, there are far too many possibilities for a human brain to compute.
In today’s complex, fluid markets, past performance isn’t necessarily a guide to future success. So, as we plan our own firm’s growth strategy, we’re using technology to help us make decisions about our future.
Using digital simulation technology, we’ve built a powerful capability that, when combined with our people’s knowledge and expertise, enables us to forecast our actual growth more accurately than with human judgment alone.
In markets that are hard to predict, understanding the probable outcomes of business decisions is valuable.
“Business growth is good for the economy, and it’s one of the UK Government’s biggest priorities,” says Deloitte Growth partner, Nick Turner.
“For a large firm like ours, how we grow is as important as how much. So, we’re using digital simulation technology to develop a nuanced picture of demand in the market and understand where we can make the most significant progress.”
One of the first F1 teams to pioneer digital twin technology was McLaren Racing, using it to enhance on-track performance. The technology creates a digital representation of reality that can be used to test responses to millions of scenarios.
Based on the same principle, we’re applying the tech to our firm’s complex planning processes.
Using macro-economic data, and our knowledge of the market and our business, we’ve created a powerful model that brings human judgment together with billions of data points, to help us play out and better understand millions of possibilities.
The result is better-informed decisions. In fact, the simulation model has predicted our firm’s growth, 12 months ahead of it happening, to a very high degree of accuracy.
“By applying simulation technology to a specific business scenario, and understanding what a business wants to achieve, we can simulate the probability of its goals becoming reality.”
Hannah Lewsley, Strategic Simulation Lead, Deloitte
Trusting the science
Through Deloitte’s partnership with McLaren, we have a long history of applying digital-twin technology to business challenges.
Learning from McLaren’s method, we’ve used the technology to support a range of operational client ambitions. They include work in the shipping and aviation industries to shape operational decisions and decarbonise, and optimising manufacturing processes such as changeovers on production lines.
As simulation technology has developed, we’ve built on this knowledge further, applying its principles not only to operations, but to strategic challenges like M&A, market entry and defending against competitive actions.
“We can now have a much more nuanced discussion with clients about their plans and ambitions,” says Deloitte’s strategic simulation lead, Hannah Lewsley.
“For example, we’ve applied this approach to clients who are looking to take a scientific, risk-based approach to M&A.
“By applying the approach to business scenarios and understanding factors like the level of risk a business wants to take and its expected return on investment, we can simulate the probability of their goals becoming reality.”
The exciting thing about the approach is its potential. Pushing innovative ideas forward is one way to open new avenues for this growth.
Realising our potential
The accuracy and usefulness of our simulation model to date has inspired us to keep developing it, so we can apply what we learn to our business challenges, as well as our clients'.
Here are three interesting takeaways from our experiences so far:
1. Our model is only as smart as our people
Our simulation model will get better with time, but it is only as good as the intelligence we feed it. The more data we feed in, to factor in what’s happening in our business and in the wider world, the more accurate its predictions will be.
2. Confident predictions can help us be bold
This approach gives us the confidence to make bolder decisions, supported by data, when we believe it’s the right thing to do for the firm. If we’re planning a bold strategy or stretch target, we can simulate the outcomes to predict results first.
3. Staying ahead of the curve
Our previous planning methods worked well in the short term. But when it comes to forecasting six months away or further, that’s where businesses most risk missing opportunities. The simulation model is enabling us to predict the future impact of a wide range of factors affecting business.
Get in touch
Hannah Lewsley
Director & Strategic Simulation Lead
halewsley@deloitte.co.uk
+44 (0)77 8830 1095
Our simulation model will get better with time.
But it is only as good as the intelligence our people feed it.
