It is not news anymore when somebody talks about increasing software content in today's vehicles, transportation systems and machinery. The software content and complexity has grown so tremendously and rapidly that even the most advanced product/software development techniques leave more to desire in view of evolving product life-cycles, feature content and need for development efficiency. Model-Based Design (MBD) techniques and V-Cycle based development processes address the significant need for managing complexity, and to some extent, efficiency in product development. Further efficiency in the development process can be achieved by enabling virtual validation of software components.The virtual validation environment for software not only has the ability to run the software component as a standalone unit for performance validation, but is also extended to the validation of the performance of the entire embedded software of an ECU, multiple ECUs and the entire system. This technique allows simulation of network communication, such as CAN, to verify performance of a distributed control system. The control system software, thus integrated on the virtual ECU network, can then be simulated together with the plant models targeted for real hardware-based, hardware-in-the-loop (HIL) simulation for early testing and debugging. This, in effect, helps reduce the effort of debugging in later stages leading to more success in the HIL testing phase. In addition to introducing errors, the simulation environment helps verify the robustness of software and its diagnostic capabilities.The virtual validation environment, as described above, lends itself to many possible use cases and can be an efficiency multiplier if integrated well within the development tool chain. In this paper, we discuss the use cases and an example tool chain that addresses this critical need.