Deloitte acquires Simulstrat from King’s College London to bolster its Resilience & Testing practiceDeloitte, the business advisory firm, has acquired Simulstrat, a pioneer in scenario simulations for public and private sector organisations, commonly known as wargaming. Simulstrat is a spin-off from the department of war studies at King’s College London. The acquisition is believed to represent the first time a British university has spun off a company founded on a humanities academic discipline.
Simulstrat will be integrated into the Resilience and Testing team, part of Deloitte’s Information & Technology Risk (I&T Risk) practice. The firm’s I&T Risk practice consists of over 500 professionals who help organisations deal with complex risk and control issues. Deloitte’s resilience and testing team, already a market leader with over 40 specialist consultants, helps organisations prepare for and respond to high-consequence events.
Simulstrat, has pioneered the development of techniques to help both public and private sector organisations understand and prepare for complex future political, economic, social, environmental, technological, legal and regulatory events. It runs simulations founded on military methodology to help build contingency plans, inform strategies and test and validate the assumptions behind them. In June 2009, the health minister Lord Darzi, attended a Simulstrat simulation for senior strategists in the NHS that tested the UK’s approach to adopting interventional radiology.
The CEO of Simulstrat Ken Charman, who will be joining Deloitte as a director, commented: “Deloitte is willing to be innovative and pioneering in hunting down new methods for its clients. It has a proven and respected capability and is committed to leading the market in developing new and more robust methods of testing based on simulations, including live scenarios. So I am very excited that Simulstrat will be joining Deloitte.”
Rick Cudworth, head of resilience and testing at Deloitte said: “The acquisition of Simulstrat is a clear demonstration of Delolitte’s ambition to build a unique and market leading practice in this field. The addition of this expertise brings us one step closer to that goal. Deloitte will be able to help our clients simulate high-consequence events that will impact their business and allow them to take pre-emptive action.”
Alison Campbell, managing director of King’s College London Business Ltd said: “King’s prides itself on the quality of its research collaborations, forming mutually beneficial partnerships between business and research teams from across the College. It is pleasing to see that the excellence in research and innovation within the Humanities at King’s has been recognised through the acquisition of Simulstrat by Deloitte and we look forward to working with the company going forward.”
Ken Charman adds: “I was pleased to work with King's College London, and especially Professors Sir Lawrence Freedman and Michael Clarke to show the value of strategic simulations in enterprise decision support. Our acquisition by Deloitte is the perfect outcome.”
Simon Owen, lead partner of Deloitte’s I&T Risk practice said: “We are seeing increasing demand from our clients for sophisticated testing, simulation and validation of strategy and contingency plans through the predictive analysis that wargaming can provide. The acquisition of Simulstrat will significantly boost our existing capabilities. Operating in increasingly challenging environments, our clients have to confront issues such as climate change, commodity price volatility, political and economic instability as well as more traditional disaster scenarios. Business simulations can ensure their organisation is robust and resilient enough to withstand these challenges.”
King's College London is one of the top 25 universities in the world (Times Higher Education 2009) and the fourth oldest in England. A research-led university based in the heart of London, King's has more than 21,000 students from nearly 140 countries, and more than 5,700 employees. King's is in the second phase of a £1 billion redevelopment programme which is transforming its estate.
King's has an outstanding reputation for providing world-class teaching and cutting-edge research. In the 2008 Research Assessment Exercise for British universities, 23 departments were ranked in the top quartile of British universities; over half of our academic staff work in departments that are in the top 10 per cent in the UK in their field and can thus be classed as world leading. The College is in the top seven UK universities for research earnings and has an overall annual income of nearly £450 million.
King's has a particularly distinguished reputation in the humanities, law, the sciences (including a wide range of health areas such as psychiatry, medicine and dentistry) and social sciences including international affairs. It has played a major role in many of the advances that have shaped modern life, such as the discovery of the structure of DNA and research that led to the development of radio, television, mobile phones and radar. It is the largest centre for the education of healthcare professionals in Europe; no university has more Medical Research Council Centres.
King's College London and Guy's and St Thomas', King's College Hospital and South London and Maudsley NHS Foundation Trusts are part of King's Health Partners. King's Health Partners Academic Health Sciences Centre (AHSC) is a pioneering global collaboration between one of the world's leading research-led universities and three of London's most successful NHS Foundation Trusts, including leading teaching hospitals and comprehensive mental health services. For more information, visit: www.kingshealthpartners.org.
Notes for editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.ukabout for a detailed description of the legal structure of DTT and its member firms.
The information contained in this press release is correct at the time of going to press.
Swine Flu Contingency Plan WargameIn military planning, the biggest challenges come from fighting a war on more than 2 fronts - Iraq and Afghanistan, for example. With the outbreak of Swine flu, there is now the very real risk of companies, already struggling against the financial crisis, facing a second major crisis. According to the Department of Health Scientific Pandemic Influenza Advisory Committee (1) the time taken for a pandemic flu to spread from its original incidence in the UK to its maximum could be as little as 50 days. Early action, including testing the robustness of response plans, will be essential to mitigate the potential damage. Using the model it created for a government wargame on combating a pandemic flu outbreak, Simulstrat is able to test resilience plans in response to the risk from Swine flu. In particular, to test the ability to put the plan into operation against the real-world threats we are facing. Simulstrat's experience shows that two of the most critical areas to test are the internal staff communication strategy and the need for regulatory relief. Simulstrat has been involved in testing the UK health infrastructure and believes the Government is well prepared. The NHS has worked through a number of exercises to validate its plans. But Simulstrat's assessment is that the prognosis for the private sector is less certain. Tests have taken place, like the Tripartite authority exercise Winter Willow that involved the UK’s financial markets, but Simulstrat believes commercial pressures mean that in general the private sector is less well practiced and more vulnerable to disruption. Air Vice-Marshal Steve Chisnall, who is Chief Operating Officer of Simulstrat and has direct experience of contingency planning on a national level, says “Large private sector organisations have detailed plans but they have less time to rehearse. These plans need to be quickly operationalised to deal with the realities of what we are facing. We are still awaiting confirmation of the exact profile of Swine flu but many companies will struggle to maintain operations if the attack rate reaches 50% resulting in a peak staff absenteeism of 15-20% for a period of seven to ten days. These organisations need to test their plans now – especially if they need to apply for regulatory relief. Organisations will also need to plan for the recovery phase - avoiding disruptions as people return to work and business picks up again”. Simulstrat runs strategic wargames for government, global organisations and international agencies. It acts as an independent external tester. Its UK pandemic flu wargame provided essential data on unintended consequences and unpredicted complications. For example, many companies had plans to issue masks to employees but made no contingency for collecting and destroying this kind of bio-hazardous waste. Statutory limits on working hours also threaten continuity if absenteeism rises beyond critical levels for key processes. Data and actions from an independent test from a trusted external source can remedy shortcomings and supply important reassurance for staff, suppliers, customers and shareholders that companies are properly prepared to manage the threat.
BBC Covers Simulstrat WargameRadion 4's flagship business programme "In Business" hosted by Peter Day dedicated a full thirty minute episode to the Bioscience Futures Foundation wargame on the UK Biotech funding crisis. The programme followed the course of the game and included interviews with Gill Samuels, Chair of the BFF, Jeremy Curnock-Cook Chair of Bioscience Partners, Eliot Forster CEO of Solace, Bruce Carter CEO of Zymogenetics. A podcast of the programme can be downloaded here:
http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness_20080828.shtml
BFF Wargame Results Press ReleaseBFF Wargame Highlights the Shortcomings of the UK Biotech Industry Compared to its US Counterpart UK Environment Needs Significant Change to Generate Global Biotech Successes London, UK – July 25th 2008 – The UK Biotech Business Development Wargame which took place on the 14th-15th July, 2008 to examine funding issues surrounding the biotechnology sector, has clearly demonstrated that the UK Biotech industry lags significantly behind its US counterpart in delivering value creation and business success. These results from the wargame, which was commissioned by the Bioscience Futures Forum (BFF) and was run by the wargame specialist company Simulstrat, are now set to prompt a compelling agenda for change that is needed to strengthen the biotechnology industry in the UK. Using a wargame enabled a direct comparison between biotech business building in the US and the UK. The game simulated two biotechnology companies, Sim BioPharma from the UK and Sam BioPharma from the US as they competed against each other in a bid to become a biopharmaceutical company with a market capitalisation in excess of £1 billion / $2 billion. Both companies were given exactly the same parameters at all stages of the game. Dr. Nigel Burns, Chairman of Cell Medica, who played on the UK team commented: “The wargame created a very realistic environment in which other participants could actually view the decisions and debates that typically happen between biotech companies and various stakeholders such as VCs, institutional investors and the media. These activities usually take place behind closed doors and without the wargame would have remained obscure and mysterious to many who attended. Being able to access and test the real opinions of key players in the industry was not only incredibly interesting but invaluable for all who attended the game.” The key findings from the game show that there are a number of crucial factors that limit the development of biotech businesses in the UK from their initial formation through to life as a public company. Key factors which the game was able analyse from a near life perspective and which were seen as clearly limiting the success of UK biotech were: - The limited ambition of UK biotech management which was compounded by UK investors’ much lower risk appetite. This contrasted with US management who were focused on higher investment returns and building a more sustainable business from Day 1
- The limited size of the UK market for biotech products meant that to generate significant returns access to and success in the US markets were crucial. Not surprisingly the experienced US executives participating in the game were able to deliver this much more effectively than their UK based counterparts
- The over-arching issue of pre-emption rights which was shown to limit investor interest from both US and UK private investors in the UK biotech space. The inability of UK biotech companies to access the significant funds that are available globally because of pre-emption rights was seen as a major drag on success
- The failure of AIM. The wargame also highlighted the major limitations of listing on AIM. This market, while creating a public value for companies, did not provide biotech companies with the ability to raise adequate follow on finance and did not provide the liquidity needed to attract a broad base of interested investors.
Dr. Clive Meanwell, Chairman and Chief Executive Officer of The Medicines Company and Board of Director of BB Biotech AG, who played on the US team, commented: “The wargame was important for highlighting the crucial differences between conditions affecting the progression of US and UK biotechnology companies. Clearly, different operating environments, in particular tax structure, regulations and different decision making approaches, have major impact on corporate development.” The wargame also sought to develop solutions to the outlined failings of the industry in the UK which would provide a base for building an agenda for change. As UK biotech requires funding beyond what UK investors are currently willing to commit, then more needs to be done to diversify the range of funding options available. It was clear that, in the short-term, significant reform of pre-emption rights would need to take place to attract outside investors into the sector. Added to this, the assessors of the wargame propose the creation of specialist collective investment funds that would be tax incentivised and encourage longer term investment. For the long-term, the general view held would be to see significant adjustments made to the listing requirements of AIM that would see stronger, more advanced asset rich biotech companies come to the market. Air Vice-Marshal Steve Chisnall, the wargame’s Director and COO of Simulstrat commented: “The UK Biotech Business Development wargame was a great success and we are confident that these conclusions provide the foundation for an innovative agenda for change for the industry. I believe that the results of the game are proof positive of the application of wargames to solve strategic problems within business and across many different sectors.” Notes to Editors In the opinion of the assessors the UK Biotech team could not achieve the objective of the game which was to create a biopharmaceutical company with a market capitalisation of over £1 billion. In comparison to the US team, the UK:
· Attracted significantly lower investment at each stage of business development.
· Never pursued indications from more than one molecule in clinical trials.
· Was overly dependent on clinical trials data from the lead indication.
· Was forced to develop a business that aimed to sell out to pharma.
· Was in a position to build liquidity by having a prospect to go it alone.
· Sold out early at lower value.
· Was less able to survive a setback with its lead candidate.
· Relied on outsource suppliers and did not develop an independent organisation.
The BFF Wargame In order to provide a comparison to the UK biotech sector, in the game two simulated biotechnology companies, Sim BioPharma from the UK and Sam BioPharma from the US, competed against each other in a bid to become a biopharmaceutical company with a market capitalisation in excess of £1 billion / $2 billion. Both companies were given exactly the same parameters at all stages of the game; both began as University spin outs with a primary focus in oncology whose lead product was a potent, selective, specific and orally administered treatment for solid tumours. Each team comprised three leading members of the industry who made up the management team of the company. The teams were also accompanied by corresponding teams of investors representing both sides of the Atlantic and also a team of other key stakeholders in the industry such as analysts, journalists and Government. -End- About the BFF The BFF was launched by the Department for Business, Enterprise and Regulatory Reform (BERR, formerly the DTI); following the Bioscience Innovation and Growth Team report that advocated the creation of an expert group to represent the views and interests of the UK biotech sector and encourage a more supportive environment for biotech development. The BFF identifies issues in the sector and brings them to the attention of the Government, politicians and senior civil servants in a way that establishes a basis for change. The results from the BFF Wargame will be submitted through the Biotechnology Innovation Growth Team (BIGT) Review in the second half of this year. About Simulstrat Simulstrat is a leading wargame specialist company that focuses on the use of war-gaming strategy to test, explore and solve key business strategies and problems. Simulstrat is led by the some of the world’s most prominent academics and strategists with an unparalleled range of experience and specialist knowledge including conflict strategy, risk management, science and technology, biochemistry and international crisis strategy. For this wargame, Simulstrat was supported by Avige which supplied specialist domain knowledge on biotechnology funding. Simulstrat is a spin-out from King’s College London. Simulstrat was founded by Professor Sir Lawrence Freedman and Professor Ragnar Löftstedt of King’s College London, and Professor Michael Clarke, Director of the Royal United Services Institute. For further information please contact: Amber Bielecka Citigate Dewe Rogerson +44 (0) 207 216 4710 amber.bielecka@citigatedr.co.uk
BFF- UK Biotech Business Development WargameIn university research and start-ups the UK leads Europe and is second only to the US in terms of biotechnology patents registered and businesses launched. Yet compared to the US, there are no large, successful UK biotechnology companies. The Bioscience Futures Forum (BFF) was launched by the DTI (now BERR) as an expert group to represent the views and interest of the UK Biotech sector, and to encourage a more supportive environment for biotech science development. The BFF has commissioned strategy experts from Simulstrat to run a business Wargame on the Biotech environment. In a two day event (July 14/15), a drug development Biotech start up will be simulated in a UK and a US fund raising environment with the objective of creating a billion dollar business. High profile representatives from UK and US biotech companies, investors, government, pharmaceutical industry, procurement, patient groups, medical research and media will participate in order to create an agenda for change for the benefit of the entire UK biotech industry. For more information please look at: Download The official brochure of the event here:  The official BFF War-game website: www.bff-wargame.com
CFO Europe, February 2008 - Battle Plans
"Corporate war games could be the best way of testing business strategy"
Eila Rana
CFO Europe Magazine, February 15, 2008
"What's the best way to test a business strategy? Bring in someone from outside to try to stop it, says Ken Charman, CEO of Simulstrat, a corporate war-gaming company spun off from London's King's College last year. Armies have tested their battle plans this way for years. Why shouldn't companies do the same with business plans?"
http://www.cfo.com/article.cfm/10610720/c_10632673?f=insidecfoeurope
King's College Business Continuity
To support the Disaster Recovery and Business Continuity planning project, the College arranged for an Exercise Day to take place on Friday 20 July.
A number of key individuals who would be expected to form the front line strategic management and incident response teams in the event of an emergency affecting the College took part in this exercise. These individuals were grouped together into the Emergency Management Team (EMT), which would take strategic responsibility in a genuine emergency, and the Incident Response Team (IRT), which would be responsible for operational considerations.
The day began with an ice breaker for the teams which required them to break out into groups to consider the implications to the College of a serious outbreak of meningitis at a hall of residence and on Campus.
After a brief coffee break the teams were told that there was news that a serious incident affecting the College was unfolding north of the river, and the teams were requested to re-form into their groups to await further news. News of a serious fire was then fed into the teams in their rooms, and a lengthy and very detailed simulation was then played out for the rest of the day.
The event concluded with a series of de-brief sessions, from which a report will be generated which will help inform the College’s Disaster Recovery and Business Continuity planning process in the future.
Cheltenham Science FestivalSimulstrat ran a showcase event at the Cheltenham Science Festival to demonstrate how simulations can be used to create and validate complex strategy. Four teams of fifteen year old students participated in an event alongside business leaders and health experts to develop a coherent district health strategy for a developing African country. Simulation Showcase - Cheltenham Science Festival
Protecting your business from ‘Unknown Unknowns’"Most businesses have a continuity plan to ensure they are able to continue operations successfully and protect financial security, employees and customers in the event of disaster striking. The plan is, however, only as good as the imagination and strategic planning that creates it".
The Telegraph Business Club produced the following article on Simulstrat...
Avian Flu Simulation
A recent article in the Telegraph discusses the advantages of War Games and the recent Simulstrat simulation on Avian Flu.
"The idea of using war gaming to address pandemic flu was conceived by the Bioscience Futures Forum (BFF), a Department of Trade and Industry group, chaired by Dr Gill Samuels, working with a team from the Department of Defence studies at King's College London, one experienced with war gaming.
The simulation, sponsored by biopharma companies and the DTI, was run over two days last July at the DTI's London conference centre.
They tested how Britain would cope with a "moderately severe" scenario for a theoretical pandemic of "Sumatra Flu" beginning in December 2006 The scenario envisaged 21 million UK cases in two waves of outbreaks and a death rate of up to 2.5 per cent.
By the time almost 20 million of the UK's population had developed full symptoms, there had been 485,000 deaths. "The economy was now depressed with an expected loss of £41 billion," added the report."
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