The Better Business Analysis Institute presence. The Better Business Analysis Podcast with Benjamin Walsh. Hi everybody, and welcome back to the Better Business Analysis Podcast with Benjamin Walsh. And today we'll be talking about a special model that we've developed here at the Better Business Analysis Institute. And this is something that's open source and free for you to use. And the model is the IEIT model. It's really a framework for
project classification. And these classifications of a type of project or a type of change will allow you to develop your Agile BA plans in such a way that you are setting this project up for success. It also helps project managers and architects alike. And it's something we don't talk about really when we start on a new piece of work. Sometimes funding models influence these quadrant areas
and we'll talk about that. And we're going to work through them on why we think this model is important, to be made explicit and something an exercise you should be doing when you start a project or even just to identify what's happening in your current project and to review whether or not you're doing the right things that are going to help ultimately make this project a success.
So the week before last, I had the team here from Defiant to talk about change and we talked about the commitment to change. We talked about beliefs and we talked about ownership. And that's the soft skills. So important that you don't have those soft skills, then your project is not going to be in the more likely to succeed bucket. And now I'm going to talk about some tangibles, some more of the
hard stuff. And so the hard stuff here is what what can we do and how can we tune our techniques to making a project more successful. And we start with awareness. So the IEIT model I want you if you have a piece of paper or grab a piece of paper. You can do it on the computer if you like, but it would be easy just to draw a quadrant on a piece of paper. So effectively A2 by two box or just across if you don't want to draw the boxes edges and we're
going to draw on our X&Y axis. If you can't, don't remember that from school, the Y axis is the one going down and up and the X axis is 1 going left and right. So we're going to be using this quadrant to explain what I'm talking about here and I'll if you're ready with your piece of paper that might help. So the IEIT model categorizes projects based on their level of innovation. OK. So that's one of our axes versus new and established. OK.
So there's a spectrum there. So you have this Y axes new and established and then along the X axis, the one going left to right, you have really an axis of improvement to transformation. OK, so that's what you want to be drawing on the end of the points improvement on the end
transformation on the other. And then on your Y axis, you'll have new and then you'll have established and so you end up with these four quadrants, if you like, which is connection between innovation establishment or established, if you like improved and transformation. One of those quadrants will look like an eye and an eye it will be innovation and improvement. Now this quadrant focuses on creating highly new solutions, products, services, processes with gradual improvements.
So there's an emphasis on experimentation and learning while minimizing, OK, if you're doing true innovation, you're trying something new in the market and and there are levels of innovation. As we talked about, there were things that'll be right up there in the quadrant.
There'll be things that'll be closer, closer to the centre, like it's, it's new for your company, like your it's new for your bank to release this app, but it may not be something that's new worldwide, OK. So there are levels of innovation and they should be tackled in the same way, even if we don't define them as true innovation.
But within that quadrant we can see project types like pilot projects, proof of concept projects, rapid prototyping, true minimum viable products with the capital P there for new ventures. OK. And this is the world where project management really has, sorry, product management has really helped us more than any other method. OK.
This is where I would say agile methodologies like Scrum and Kanban, design thinking, user experience testing, experimental frameworks like Lean Startup. They have really cemented this area of innovation and improvement as being a really hot area that that that in some ways is becoming almost a new category for a lot of companies, right, establishing teams, innovation teams, labs. And it's important to know that
both exist. And there are challenges though when we move our product out of this quadrant, OK. And they do develop to a point where they have to move sometimes to live freely within the Organism in which they exist. So your organizational structure and the size of your company matters here as well. That's another dimension that we can look at and we take the smallest company innovating a new product using improvement.
So true agile scrum, this is where the purest agile methodologies really work well and you know, working well with product management which is, you know, developing what the customer wants and testing with it. This is where we ideally talk about a lot of these theories and processes being the ideal state that we all want to work in. But it's only one of the quadrants in which it exists. So I'll give you an example for this quadrant if you haven't quite grasped it yet.
This will be when you are developing a new mobile app, for example, for a coffee shop, local coffee shop with an MVP approach. The initial version focuses on core functionality like ordering and payment, with plans for, say, gradual improvement based on user feedback. Get the first step out, you know, query users, ask them to tell you what they want to do next. Cross all those ideas, you know, work out who the adopters are, all the great things. I spend a lot of time talking
about this area. I actually really enjoy it. It's where my heart sinks. But it's not actually where I operate on a daily basis, because I have a lot more consultancy experiences and skills actually in other areas. And the one thing about improvement and innovation is actually innovation and improvement. I and I is that if you're not operating within a company that's funding you or you don't have venture capitalists or partners who are able to pay your wage.
A lot of us are unable to economically work in this environment if we are supporting families and what not or got a big mortgage. So it's a place that we all want to get to. It's also a place in which companies try to replicate and big corporations and actually sometimes they fail for lots of reasons that, you know, this is not they. They even if the innovation improvement area is pumping out, they have a really hard time incorporating these products back into operations.
So there's some challenges coming out of this quadrant, which is a podcast for another day. All right, so let's move on to the next quadrant. And and you know, I do think it's a good idea for you to follow me along the way on your piece of paper. So you understand, you will find this very, very useful. All right. So our next quadrant is innovation and transformation. OK, so this quadrant represents true innovation with a radical change in approach project.
Here projects in the space aim to disrupt existing industries or create entirely new markets. So this is where the project types of things like true innovations, moon shot projects, so ambitious high risk benches are Greenfield initiatives. This is where you're not transforming your you will, you will be transforming your business, but you are literally transforming a whole industry and and those zero in New Zealand were embarked on this again.
A lot of these, a lot of these companies start here when you innovate. But the way that, you know, corporate structures work, capitalism works. You can't always stay in an innovative space. You've always got to like move out of it. This is the area again, Elon Musk I talk about often only because he is someone who's on the news, is, you know, this is
where SpaceX operates. This is where I would say Tesla does not operate anymore, which may be why it struggles a little bit up and down like a like a hot detector machine and in terms of its share price. But projects like Neuralink is another example. Here Facebook has got, you know, a few, a few projects in the space as well.
So these are, I would also say that Apple thrives in innovation and transformation where they come into an industry and they just transform it with the iPhone for example, and they're doing it now with the the kind of goggles. It doesn't just mean first to market, it means that you are using, you know, you're really breaking your ground. So the frameworks you want to use here is 100% design thinking. OK, this is really true design thinking. You're using open innovation
model. You're using stage gate models for managing risk because you've you're seeking external money for this. This is you, you can't. Unfortunately a lot of us like for example I was involved in the start up company about a year and a half ago and through an incubator and we were looking to innovate and transform a whole industry, right. But we're up against a major industry and in order for us to even get a head start in that area this is actually so this is pre pre COVID.
We almost needed more capital like we had to the baseline for capital to even compete in this market to even be known and not get like squished by the other players or the existing established players in this market. And we'll come to established in a minute was was hard And so you know we really lost it from a financial point of view in that area and it made it kind of it didn't make it even though we had a pretty good solution that we were looking at launching.
The amount of capital we needed to take the risk to roll that out with all those other external factors affecting us just didn't make it worth it. And primarily, you know, we literally had some big established players, not necessary in the category we're in, but some supporting categories that we needed in order to innovate in space or transform this or disrupt this, which is a keyword that we used at the time, made it next to impossible in the New Zealand
market. An example would be developing a new type of electric vehicle with a novel battery. You know, you could say Tesla was in the space, but if you could come up with a new battery that significantly increased range and reduced charging time, which they are at the moment in China. There's a few manufacturers on this, then that project requires extensive research, right.
It's really an engineering project, research projects, scientistic scientific people collaborating with external partner partners and a really, really high tolerance. So people are taking a gamble. A lot of VC firms or investment firms will invest in these and they you might have heard the term Unicorn companies. This is where V CS bit and put a holiday bits on holiday companies, some are very high risk and you know the chances of them actually breaking through
the market in this area are low. But if they do transform the whole market, the return on investment is absolutely huge. Then they go after what companies which are just doing innovation, in some ways innovation and improvement. So just some apps that might establish itself as being better than the rest. And then they have a whole portfolio I guess of things which they know are established where they're just going to get marginal growth on them.
So that's how kind of how they they work out their funding and and when it comes to Unicorn funding or innovation and transformation funding, they will bet on 100 things and 99 of them will fail. But if one succeeds then they get, you know they still make a huge amount of money. So we look at we're going to move on to the third quadrant and this is now space in which a lot of BA play in OK, let's let's. So the last two one, sorry #3. Our third quadrant is establishment and improvement.
So this quadrant focuses on optimizing existing solutions for better performance or efficiency. Projects here aim to make incremental improvements to establish product services process. This by far is the number one category in which a lot of us are operating OK. The project types are process
improvement initiatives. So you know the true process improvement lens, 6 Sigma projects, cost reduction projects or at least a business case that says you're going to reduce cost by, you know, taking one system and replacing it with another. Continuous improvement programs internally as well, not just projects in the sense of the capital P projects, they're all projects in my eyes because
you're spending money. This could be implementing, OK, I'm going to be careful here, new software systems to streamline workflow. Now when I say new software systems, they're established. So generally these are projects. These are not, you're not building a brand new software system. You are taking something that's off the shelf and putting it in here. And a lot of people make a mistake in establishment and improvement where they try and innovate at this stage.
And that's a failing. When you are going to do establishment and improvement, you should be working with an established a piece of software. You shouldn't be innovating on that software because you want unless it provides you with a competitive advantage. And if it does, you split your
project into two pieces here. OK, you split your project into establishing the the fundamental out-of-the-box software and then you create a SWAT team that works in quite a different funding model, quite a different way to then extend that product or build an app on top of it. They're two distinctly different pieces of work, two different mindsets and probably two
different skill sets. Here the frameworks we use in establishment and improvement, E and I are lean 6 Sigma processes, Kaizen methods, small continuous improvement. But we also for the establishing the software or the change we use Prince Two, we use PM Bock, PMP, the we use standard you know IIBA models. We use standard frameworks for doing this at the Better Business Analysis Institute.
This is where a lot of the collateral we have, a lot of the processes and redesign we have will help with all of these, but primarily it will be a better way of carrying out establishment and improvement for ABA, OK. So this is really where BAS traditionally play. An example would be implementing a new ERP system, you know enterprise resource planning system to streamline inventory and production processes in a manufacturing company.
This project might leverage, it will leverage established software to improve existing functionality, OK. So this is really, really important here. OK. So do you do we understand that? So we're kind of implementing system that exists and we're improving on it, we're improving our processes at the same time we're we're saying hey look it took us an hour to complete this process in our in our paper based system or our old system and we're moving to a new system that will reduce this time
period. So that's how you measure it through the process improvement, OK, from current to future state be taking the current, you're moving the current state to a new, a new system which is the transformation. But then you're improving on that by reducing the time it takes to do something. So you might be improving the screens, you might so you are you are improving the overall experience, but you're in an established environment, OK.
And the final quadrant we're moving to is establishment and transformation E And so this quadrant involve taking established solutions and fundamentally changing, OK. So projects aim to transform existing business models, OK, processes and organizational structures. This is where you are reengineering an organization and you could say that the project types here are process, business process reengineering, so radically redesigning
processes for efficiency. This is a place I actually like to play or what you actually find is that we we, when we say the word, radically redesigning the current state of these processes could be just just a mess. So they never were designed in the 1st place. So in some ways you're actually you when we say transformation we're transforming something that wasn't wasn't quite you know formed first place digital transformation initiatives.
So leveraging technology to significantly change our business operates. So consolidating all your applications into one ERP tool, replacing a whole series of staff through automation and AI mergers and acquisitions, that's a that's a place here when we're doing establishment and transformation, true restructuring, OK.
So an example might be merging two companies from different industries requiring requiring a complete overhaul of the business right structures, processes, IT infrastructure, moving you know all your infrastructure to this to the acquisition company model. Maybe it involves a high degree of complexity and risk. People are are touched, people lose jobs in this situation. So there are. So I'm just going to go over those again just just rapidly.
So we've got the four quadrants, we've got innovation and improvement which is really focusing on new solutions like market based solutions. We're improving on that. We've got innovation and transformation, right. When we are innovating, right, we're taking, we are still doing innovation, but we look and we're looking to transform an industry, right. So that's quite different to innovation and improvement where you are improving.
You're putting out an app and you're improving something, so you're making it better and a lot of, a lot of when you go to market, this is a really good, this is a safer place to to to focus. So let's say a banking app is coming out, a phone based banking app to manage your accounts and really it's aiming to, you could say disrupt in some ways, but let's say it's just better than the competition
that's already disrupted. So if there was a competitor to Uber or a search engine and you know competing with Google it's it's just trying to be better than the established industry and you're you're so you're not you're just improving on that you're improving on what's available today and and and a lot of that lean startup involves in that.
So there's an existing market or you're you know you're going after existing customers and you you're improving their jobs to be done with innovation and transformation. You are truly doing breakthrough industries. You're taking a risk that in my you know you you are hoping there's a market and you're taking big massive leaps to change an industry in which Apple did with the iPhone.
That's that's a good example of innovation and transformation establishment and improvement is when you are optimizing existing solutions for better performance or efficiency you might be putting in. So don't don't don't get me wrong here it's also about implementing systems and improving them that you know lift and shift, you know move to cloud, putting a a better ERP system in, right.
So a lot of us plan that space and then finally you have establishment and transformation where you're doing massive transformation that could be IT massive NTN transformation or changing complete establishing a whole new suite of business model or processes organizational structures or IT infrastructure. OK. And you're so they're the four quadrants and I want you to think about what project you're currently working on or if you're not ABA, which pro which area do you think would be sound
like the most fun. A lot of BAS get caught up in the fact that they want to do innovation. So they might they might know, hey look I'm not going to be able to do this ground breaking transformation of an industry. I'm not rocking the world. I work for a bank, but I'm, I really want to be in the team that does innovation, improvement, right, releases products, banking for example.
It's really sexy and that's cool, you know, getting that team do that, follow those methods, but but then also people try to take those methods and then apply them down in the establishment and improvement or establishment and transformation and they just don't work. They have a completely different, you have to have a completely different approach when you're working down at the established area, basically both the improvement and the transformation of that.
So when you work in an established industry or established business model, the you're going through business cases. You can't be true agile, OK, you can't be true agile, you can't, it doesn't actually work. You need to have more of a waterfall wrapper or a business case wrapper around small agile teams, but they work within an
established area, OK? And when you do establishment and transformation, as you're doing true transformation and established environment is another way of saying that you, you know you have change managers, you have organizational structure trees, you have process modeling. So BA work very well in the established established area of both improvement and transformation. But you need to then work in other methods as you work in other areas like the innovation area.
So I hope you understand now about the IEIT model. I hope that you can see what project you're doing and understand that your approach to the project needs to be different, the set of processes, frameworks that you need to be different. But I'm also going to tell you about something else that we've that we've talked about before
which is the 4P plus model. So the four P plus model also developed by the Institute of Better Business Analysis is a a model that exists regardless of which of these projects that you're working on. So it's your consistent heart. So you can wrap these four quadrants around the four P plus
model and the 4P plus model. If you can't remember what it is, it's it. It talks about people, it talks about processes, it talks about projects and it talks about products and those four entities and how they work and how and that sequence they that exists regardless of which type of project classification you're working on.
So you start in a different area and you focus your attention and how you go about each of those stages and how you interact with people, what methodology you use, how in depth you go into people for example, or project planning. Or you know do you do a lean canvas, which is you know a real basic business case or do you do a full business case. That's determined by the the IEIT model, but the four P plus
model is consistent. So those two models hand in hand are very, very powerful and help define our what when we're doing projects. I'm going to talk more about the what in the future and probably publish out some articles about this and so you can kind of understand how these methods work. But I hope that you've got value today and I'll see you next time.