BOULDER - Five years ago, while helping the U.S. Navy with a diversity work force project, a light bulb clicked on in James Kelly's brain.

Kelly, co-founder and chief executive of OptTek Systems Inc., and his team were hired to help the military organization model its enlisted force to ensure the right personnel would be on hand for any endeavors down the road.

"They were trying to understand how sailors moved through their careers in the Navy, why they stay and why they sometimes leave," Kelly said. "By simulating people moving through their careers, they could find out where gaps might occur this year, next year and in the future."

Using OptTek's simulation technology, the Navy could determine how changes in its incentive structure or benefits could keep the most critical people in the organization.

"Depending on specific attributes of an individual, like gender, ethnicity, age and life experience, the likelihood of staying in the Navy goes up or down," Kelly said. "We could help them simulate that and plan for the future."

As soon as the team saw the model's success in a military application, Kelly said, they knew the idea had merit and focused on replicating it for use in the commercial sector.

In 2008, after receiving a $450,000 Small Business Innovation Research grant from the National Science Foundation, the project morphed into the company's latest product, OptForce. Currently in beta mode, OptForce is slated to hit the shelves later this year, Kelly said. Several Denver-area companies are already testing it to provide the company with critical feedback about the product.

This new product, OptForce, has earned OptTek a Boulder County Business Report 2009 IQ Award in the Internet software: business category.

OptTek was founded in 1992 and is a provider of optimization technology for simulation software. The company's flagship product, OptQuest, is integrated into more than 95 percent of simulation software products sold today. In 2004, the company had revenues of more than $2 million.

Designed primarily for large-scale companies with thousands of employees, OptForce takes the data captured by human resource departments and, using simulation technology, optimizes the work force over the employment life cycle from recruiting to retirement.

Once employees are segmented into groups, the modeling software then calculates objectives such as health care, employee engagement, diversity goals and retention to effectively manage costs and plan for shifts in company strategy.

"Part of our challenge is to understand what segmentation makes sense," Kelly said. "Our goal is to get it right for a large segment. We might get it wrong for one individual, but the goal is to get it right over a large number of individuals."

Kelly cited the economy as one variable the software can model. "The chances of someone leaving a job go down quite a bit in an economic situation like we have right now. But when the economy is stronger, the chance is much greater."

Although other companies are "attacking various pieces" of the work force planning challenge, Kelly said, the competition's offerings aren't nearly as flexible and holistic a solution as OptForce.

"Many companies are focused on success planning or tracking a few critical people to groom them as executives," he said. "We're looking more at the entire work force."

When the product is available, it most likely will be sold directly to the end-user in a software-as-a-service model, with scalable pricing based on employee head count, Kelly said. Another option is to bundle it with software delivered by their channel partners.

Brian Wilkerson, global practice director for talent management at Watson Wyatt, is one of those testing the beta version of OptForce. Alerted to the product by a colleague, Wilkerson said he thinks it's a unique product in the marketplace.

"I really saw it as an opportunity to push the boundaries in work force planning," he said. "It's pretty innovative."

Wilkerson said companies are demanding more statistical modeling and optimization tactics in their work force planning. Many operations experts are becoming interested in human resources and, because they have used modeling in operations planning, are looking to apply it to human resources management. "It's definitely something we are seeing more of," he said.

After using OptForce with one client who is redeploying its work force due to new production locations, Wilkerson said the tool allowed the client to shave a significant amount off the costs associated with the new requirements.

"We did it by hand then calculated using the tool, and it came up with a 20 percent better - better meaning cheaper - solution," Wilkerson said.

"It's very unique in terms of what is available for work force planning," he continued. "Right now, they have a real niche. There are other tools that do work force planning but not any that do it using optimization as the background."