Simulator must not be confused with Models nor Analytics tools. Although they all have many features in common, they also have key distinctions which sets them apart. These distinctions are often overlooked or simply ignored, hence organizations and IT-suppliers often use these terms indiscriminately with the ensuing confusion about what can/cannot be achieved with such tools. The diagram below summarizes the key distinctions which sets them apart.

On the X axis you have the major approaches found in most organizations: Data Mining & Analytics, Modeling and Simulation.
On the Y axis you have the typical tools also found in most organizations: Data Base, Slice & Dice algorithms, Mental Model, Computer Model and Simulator. On the coordinate plan of the approaches/tools you find which tool is typically used by within the context of which approach. For example Data Bases and Slice & Dice algorithms are typical tools of the Data Mining and Analytics Approach whereas the Mental Models of  Managers & Executives and their Computer Models are typical tools of the Modeling Approach, and so on. The asymptote curve in each cell remind us that each tool, however useful in a given approach, reach its diminishing return when pushed to its limit, hence the need to move to the next Approach/Tools level.

Approach/Tools level

On the right-most Y axis you have the ‘Understanding Scale’ that each Approach/Tools combination will typically delivers. The scale range from its lowest level, the raw data which are ‘uninformative bits’, to its highest level, deep and deeper understanding which are ‘event-related’ deep knowledge about preconditions for something to happen and consequences of something to happen.
In between you find diverse types of understanding: fragmented, shallow and deep. Note here that each row of the Understanding Scale is necessary, hence valuable, but not sufficient. The Mental Models of Managers & Executives are necessary to develop useful Computer Models and, eventually, Simulators; but then the knowledge discovered from Slice & Dice algorithms is a necessity for Managers & Executives to develop their useful reality-driven Mental Models…Yes a Simulator is higher than a Slice & Dice algorithm on the Tool-Sophistication axis, but the value of the former is function of the later.

 

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