In today’s volatile business world, making smart executive decisions is harder than ever. Balancing efficiency, long-term strategy, and the need to adapt quickly is a daily challenge.
For years, spreadsheets and business intelligence dashboards were sufficient. But with markets constantly shifting, customer behavior growing increasingly unpredictable, and supply chains under stress, these tools alone fall short.
This is where AI and simulation step in. Once used only by technical teams, simulation and AI in business intelligence have now become essential tools for top executives. As discussed in the AnyLogic webinar "AI and Simulation: What Executives Need to Know," hosted by Andrei Borshchev (CEO and Co-founder of AnyLogic) and Luigi Manca (Director of Simulation and Decision Intelligence at Engineering Group), we are entering a new era. One where AI and simulation are no longer side tools but belong at the center of executive strategy.
Contents:
- Simulation: from engineering niche to strategic necessity
- What AI and simulation do together
- What executives get wrong and how to fix it
- What executives should start doing now
- How AI and simulation help in your sector
- Conclusion
Simulation: from engineering niche to strategic necessity
For years, simulation has lived on the engineering or operational floors of organizations. It was seen as a “nice-to-have” analytical capability. Powerful, yes, but too specialized for the C-suite.
However, that perception is changing. As Luigi Manca highlighted in the webinar, simulation is now a critical part of decision intelligence. Gartner reinforces this shift, defining the discipline as follows: “Product leaders must leverage generative AI and simulation technologies to harness disruptive trends and innovate across industries to stay ahead of competitors.”
What’s causing this shift?
The answer lies in uncertainty.
We’ve seen pandemics, semiconductor shortages, energy crises, and ESG regulations reshape entire industries. Traditional forecasting can’t keep up. But simulation, especially when powered by AI, gives leaders a way to prepare for many possible futures.
Simulation helps executives navigate this uncertainty. It doesn’t predict the future; it prepares businesses for multiple probable futures.
It lets teams test decisions in a risk-free environment, explore edge cases, and surface second- and third-order effects. It empowers leadership to be resilient, not just reactive.
What AI and simulation do together
Simulation lets businesses model real-world systems and anticipate outcomes under varying conditions. Alone, simulation is powerful but requires a lot of manual setup. AI adds the ability to quickly explore many options, learn from data, and suggest better paths forward.
That’s why AI in business intelligence is such a game-changer. It shifts us from reactive reporting to proactive planning. Together, AI and simulation help executives:
- Understand how decisions impact complex systems.
- Run thousands of "what-if" scenarios without risk.
- Optimize outcomes across cost, time, and resources.
- Identify weak points before they become problems.
- Turn data into clear, visual strategies.
Here’s a practical breakdown of how AI and simulation complement each other:
| Feature | Simulation | AI |
|---|---|---|
| Models reality | Yes | Indirectly |
| Handles uncertainty | Very well via Monte Carlo, agent-based models |
Depends on data scope and quality |
| Learns from data | No | Yes |
| Generates scenarios | Yes | Yes especially with reinforcement learning |
| Offers decision support | Yes via experimentation |
Yes via prediction or optimization models |
When AI and simulation work together, they make strategy dynamic rather than static. Simulation builds the sandbox; AI explores it.
What executives get wrong and how to fix it
Despite the power of AI and simulation, many executives still underuse them. One of the most insightful moments in the webinar was the discussion around why simulation adoption has been slow at the executive level.
Executives often make three mistakes:
Mistake #1: Treating simulation as an engineering tool
Simulation is often delegated to developers or data teams without strategic framing.
Fix: Reposition simulation as a decision enabler. It should be in the same room as KPI discussions, M&A strategy, and risk management.
Mistake #2: Asking for “the best forecast”
Executives frequently ask simulation teams to identify the most “accurate” forecast scenario.
Fix: Let go of accuracy obsession. The goal isn’t to predict exactly what will happen; it’s to prepare for what might. Prioritize robustness over precision.
Mistake #3: Using simulation post-mortem
Simulation is sometimes used after decisions are made, either as justification or as a post-failure analysis tool.
Fix: Bring simulation upstream into strategic foresight. It should be a core step in evaluating new product launches, acquisitions, logistics changes, or infrastructure investments.
What executives should start doing now
The transformation of simulation from a technical aid to a strategic imperative requires executive action.
Here’s what leaders can start doing:
1. Build simulation capability internally
Don’t outsource everything. Grow internal expertise and invest in teams that understand simulation, AI, and business intelligence.
2. Integrate AI and simulation into strategic planning
Use them not as afterthoughts, but as a standard part of budgeting, risk management, and operational reviews.
3. Use dashboards that explain, not confuse
The value of AI in business intelligence is clarity. Look for tools that turn simulation results into simple, actionable visuals.
4. Make it cross-functional
AI and simulation shine when multiple perspectives are involved. Bring together operations, finance, and IT to ensure models are well developed, data is properly shared, and insights are actionable.
Industry-specific deep dive: how AI and simulation help in your sector
The power of simulation and AI in business intelligence varies by industry, but the benefits are widespread. Today, this combination forms a powerful decision-making tool that helps leaders make better, faster, and safer choices, especially in uncertain or high-risk situations.
In financial services, simulation helps banks prepare for market crashes and fraud risks. AI detects patterns, while simulation shows how different players might react. This combination supports stress testing and smarter investment planning.
In retail, companies simulate how customers move, shop, and respond to promotions. AI helps test pricing, layout, and stock strategies. Together, AI and simulation help reduce waste and increase revenue.
Read also: Tackling Retail Out-of-Stock with AI
Logistics and transportation companies use simulation to model delivery routes, warehouse operations, and supply chain performance. They can test scenarios like port closures or shipment delays, then find the best way to respond. AI adds value by helping to automatically suggest better routes or delivery schedules when plans change.
Healthcare organizations use simulation to plan hospital staffing, bed usage, and patient flow. During COVID-19, it was essential. Today, it helps reduce ER wait times and allocate resources efficiently. With AI in the mix, hospitals can adapt faster to demand shifts.
Read about a Canadian hospital experience from benefiting simulation
In manufacturing, simulation helps to optimize production lines and reduce downtime. With AI, systems can automatically suggest ways to improve energy use or staffing while meeting output goals.
Even sectors like energy, government, and education are using simulation. Energy companies model power grids to keep them stable. Governments use it to plan for emergencies like floods, public processes, or social crises. School systems simulate enrollment changes to improve how they use buildings and staff.
A mindset shift
AI and simulation are no longer futuristic tools. They are the new foundation of smart, fast, and resilient decision-making.
Executives who adopt this mindset will outperform those who rely only on static dashboards and gut instinct. AI and simulation don’t just tell you what happened. They help you understand what could happen and what you should do next.
Ready to explore the future of decision-making? It starts with simulation and scales with AI.
Get on board and start with a better forecasting approach today; get your AnyLogic.
