Business Case Simulation
The Professional Version of Expert Business Case performs a limited version of a Monte Carlo Simulation in order to estimate your business case risks and the probabilities of success and failure. A Monte Carlo simulation allows you to take a set of assumptions which drive your business case cash flows and run thousands of random variations on those assumptions based on the expected accuracy of the assumptions. The end result provides a much richer understanding of the likely outcomes of your business case.
Expert Business Case's Monte Carlo simulation is designed very narrowly for creating charts, graphs and What-If analyses for business cases, but offers only a limited number of ways to vary your assumptions (only 4 probability distributions and no way to correlate assumptions which must be independent) in comparison with general-purpose simulation tools.
If you need a general purpose Monte Carlo Simulation tool, or one with a significantly richer set of distribution functions, or one where you can define how your assumptions are correlated, we recommend Vanguard Studio.
The probability distribution functions included in Expert Business Case Professional include the most commonly occurring distributions:
- Normal Distribution (bell curve)
- Lognormal Distribution (skewed right)
- Triangular Distribution (Low, Expected and High Values)
- Uniform Distribution
For a user without a statistical background, using simple distributions in a simulation (or even only triangular which are the easiest to understand) can provide a great deal of insight into the probability of success or failure of your business case.