ROI Case File No.279｜'Auralis Audio's Wandering Development Projects'

Chapter 1: Wandering Over Development Capability—The Price of Vague Judgment Criteria

The week after resolving the Medivida PDCA case, a consultation arrived from Northern Europe regarding an audio equipment manufacturer's development strategy. Case File 279 of Volume 22 "The Pursuit of Reproducibility" is a story about transforming vague judgments into clear criteria and ending development chaos.

"Detective, we're receiving surging development project requests from clients. However, we have no criteria for which projects to develop in-house versus outsource. Every meeting opinions split, decisions postpone."

Johan Lindqvist, Technology Director of Auralis Audio from Stockholm, visited 221B Baker Street with an exhausted expression. In his hands were lists of 20 development projects, each marked "under consideration" on decision documents.

"We're a Swedish manufacturer developing high-end audio equipment and IoT solutions. We want to strengthen in-house technology while lacking resources to internalize all projects. But we can't decide what to outsource, stalling all projects."

Auralis Audio's Decision Paralysis: - Founded: 2012 (audio equipment manufacturer) - Annual revenue: 12 billion yen - Development projects (under consideration): 20 - Average consideration period: 4.5 months (undecided) - Development engineers: 45 - Development delays: Average 6 months - Opportunity loss: Estimated 1.8 billion yen annually

Johan's expression held deep anxiety.

"The problem is our judgment criteria are 'somehow.' 'In-house to strengthen technology' 'Outsource due to time constraints' 'In-house because outsourcing is expensive' 'Outsource because of risks.' Criteria change per project, no consistency."

Wandering Judgment Examples:

Project A: IoT Audio Module Development - Sales: "Want it quickly, outsource" - Technology: "Our strengthening area, in-house" - Finance: "Outsourcing expensive, in-house" - Management: "Which is right?" - Result: 5 months considering, undecided

Project B: Cloud Music Distribution System - Technology: "We're audio experts. IT should outsource" - Management: "Too much outsourcing prevents technology accumulation" - Sales: "Either is fine, just hurry" - Result: 3 months considering, undecided

Project C: New Product Firmware Development - Technology: "In-house builds technology" - Finance: "Personnel costs exceed outsourcing" - Quality Assurance: "Outsourcing quality concerns" - Result: 4 months considering, undecided

"Without judgment criteria, we repeat circular discussions per project."

Chapter 2: Why-What-Who-When-Where-How Organization—Six Questions Grasp Essence

"Johan, what information are current decisions based on?"

To my question, Johan answered with a bitter expression.

"Basically 'intuition' and 'loud voices.' If I as Technology Director say 'should in-house,' it leans in-house. If Finance says 'cost,' it leans outsource. No objective criteria."

Current Decision Process (Subjective): - Information gathering: Each department brings fragmented information - Discussion: "In-house vs outsource" dichotomy - Judgment criteria: Not articulated - Result: Loud voices or last speakers decide

I explained the importance of structured thinking.

"Judgment wanders because you're not asking what should be asked. 5W1H—Why, What, Who, When, Where, How. Organizing information through these six questions clarifies judgment."

⬜️ ChatGPT｜Catalyst of Concepts

"Why, What, Who, When, Where, How. Six questions clear the fog"

🟧 Claude｜Alchemist of Narratives

"Chaos springs from lacking questions. Right questions guide right answers"

🟦 Gemini｜Compass of Reason

"5W1H is thinking's skeleton. Transform ambiguity to clarity, emotion to logic"

The three members began analysis. Gemini deployed the "Development Project-Specialized 5W1H Analysis" framework on the whiteboard.

5W1H's Six Questions: 1. Why - Why is this development necessary? 2. What - What to develop? Specific deliverables? 3. Who - Who develops? For whom? 4. When - By when to complete? 5. Where - Where to develop? Where will it be used? 6. How - How to develop? In-house? Outsource?

"Johan, let's organize the wandering 20 projects with 5W1H."

Chapter 3: Project A Dissection—Six Questions Lead to Answers

Phase 1: Project A's 5W1H Analysis (1 week)

We analyzed "IoT Audio Module Development," the most contentiously debated.

Conventional Discussion (Vague): "Want to develop IoT module. In-house or outsource?"

5W1H Analysis:

1. Why: - Q: Why is this development necessary? - A: Client (major appliance manufacturer) inquiring about "smart home-compatible audio module" - Q: Why should we develop it? - A: Client values our "sound quality" strength. However, IoT control part not evaluated - Discovery: Should in-house sound quality, IoT control can outsource

2. What: - Q: Specifically what to develop? - A: - Audio processing engine (DSP design, sound tuning) - IoT communication module (Wi-Fi, Bluetooth) - Control firmware - Cloud linkage features - Discovery: Of 4 elements, identify which is "differentiation source"

3. Who: - Q: Who develops? - A (in-house): Of 45 engineers, 15 audio specialists, 10 embedded, 0 IoT specialists - A (outsource): IoT-specialized development company - Q: Developing for whom? - A: Major appliance manufacturer, ultimately general consumers - Discovery: No in-house IoT specialist engineers. Outsourcing rational

4. When: - Q: By when to complete? - A: Client requests 6 months - Q: In-house or outsource—which is faster? - A: - In-house: 12 months (including learning period) - Outsource (IoT part only): 6 months - Discovery: Meeting deadline requires outsourcing

5. Where: - Q: Where to develop? - A: Stockholm in-house lab (audio-specialized equipment, no IoT equipment) - Q: Where will it be used? - A: Global market (requires each country's communication standard compliance) - Discovery: Each country standard compliance suits external experts

6. How: - Q: How to develop? - A: - Audio processing engine: In-house (our strength) - IoT communication/firmware: Outsource (expertise, speed) - Integration testing: In-house (quality assurance) - Discovery: Hybrid type is optimal solution

Phase 2: Judgment Criteria Articulation

From 5W1H analysis, clear judgment criteria emerged.

Auralis Audio's Development Judgment Criteria:

Projects to In-house: 1. Audio processing etc., our competitive advantage source 2. Sufficient in-house specialist engineers 3. Strategic area where technology should accumulate in-house

Projects to Outsource: 1. Not directly linked to our competitive advantage (general technology) 2. Lacking or insufficient in-house specialist engineers 3. Tight deadlines, can't meet considering learning period 4. Requires special facilities/certifications

Hybrid Type (partial in-house, partial outsource): 1. Projects spanning multiple technology areas 2. In-house our strength parts, outsource others

Phase 3: Application to 20 Projects (2 weeks)

We applied judgment criteria to all 20 projects.

Judgment Results: - In-house: 5 (audio processing, proprietary algorithms etc.) - Outsource: 8 (web development, IoT communication, certification acquisition etc.) - Hybrid: 7 (core technology in-house, peripherals outsource)

Project A Final Decision: - Audio processing engine: In-house (3 people, 4 months) - IoT communication module: Outsource (specialist company A, 3 months) - Integration/quality assurance: In-house (2 people, 2 months) - Total development period: 6 months (meets client request) - Cost: 60% of in-house only

Chapter 4: Judgment Reproducibility—5W1H Template Construction

Phase 4: Decision Process Standardization (1 month)

To make 5W1H analysis reproducible, we templatized it.

Development Project Evaluation Sheet (5W1H):

[Why]
□ Why is this development necessary? (Business purpose)
□ Why should we develop? (Competitive advantage)
[What]
□ Specific deliverables?
□ Which part is differentiation source?
[Who]
□ In-house specialist engineers: ___ (sufficient/insufficient)
□ External partner candidates: _____
[When]
□ Deadline: ____year__month
□ In-house period: ___months
□ Outsource period: ___months
[Where]
□ Required facilities/environment: (available/unavailable)
□ Regulations/certifications: (domestic/overseas/unnecessary)
[How]
□ Recommendation: (in-house/outsource/hybrid)
□ Reason: ________________

Phase 5: New Decision Process (Establishment)

We established 5W1H in the organization.

New Process: 1. Sales receives project 2. Technology Director creates 5W1H sheet (1 day) 3. Related departments supplement information (2 days) 4. Present recommendation per judgment criteria (1 day) 5. Management meeting final decision (1 hour)

Comparison with Conventional: - Conventional: Average 4.5 months, no conclusion - New method: Average 5 days decision

Results after 6 months:

Decision Acceleration: - Project decision period: 4.5 months → 5 days (96% reduction) - Decided projects: 2 of 20 → 18 of 20 (90% decision rate) - Decision meeting time: Average 3 hours → Average 45 minutes

Development Efficiency Improvement: - Development delays: Average 6 months → Average 0.8 months - Deadline compliance rate: 45% → 88% - Customer satisfaction: 3.2 → 4.5

Cost Optimization: - Development cost: Average -22% reduction (appropriate in-house/outsource judgment) - Engineer utilization: 65% → 87% (clear role division)

Strategic Technology Strengthening: - Audio processing engineers: 15 → 22 (concentrated investment in in-house areas) - Patent applications: 3/year → 11/year (focus on core technology) - Competitive advantage strengthening: Acquired industry top evaluation in audio quality

Customer Voices:

Major Appliance Manufacturer Procurement Director: "Previously waited 5 months from proposal to response. Now get clear answers in 1 week. Plus, focusing on sound quality as core improved quality."

In-house Engineer: "Previously a 'jack-of-all-trades,' pushed into non-specialty development. Now concentrating on audio expertise, my skills improved."

Chapter 5: The Detective's 5W1H Diagnosis—Questions Transform Chaos to Order

Holmes compiled the comprehensive analysis.

"Johan, the essence of 5W1H is 'structured thinking.' Judgment wanders because you don't ask what should be asked. Why, What, Who, When, Where, How. Organizing information through these six questions naturally clarifies judgment."

Final Report after 12 months:

Auralis Audio was evaluated as "the fastest decision-making company" in the Nordic audio equipment market.

Final Achievements: - Annual revenue: 12 billion yen → 16.8 billion yen (+40%) - Operating margin: 8% → 18% - New product launch speed: 2x - Customer satisfaction: Industry top

Johan's letter contained deep gratitude:

"Through 5W1H analysis, we transformed from 'a wandering organization' to 'a deciding organization.' Most important was articulating judgment criteria. Now even new employees can make appropriate judgments using the 5W1H sheet. Judgment isn't person-dependent intuition but reproducible technology, we understood."

The Detective's Perspective—Questions are Thinking's Blueprint

That night, I contemplated decision-making's essence.

The true value of 5W1H lies in its simplicity. Complex analytical methods only specialists can use. But six questions anyone can use. And just answering these six questions structures vague information and clarifies judgment.

Questions are thinking's blueprint. Right questions generate right thinking.

"Those wandering in chaos have no questions. Those advancing clearly have right questions."

The next case will also depict a moment when structured thinking opens a company's future.

"Why, What, Who, When, Where, How. These six questions illuminate the labyrinth's exit"—From the detective's notes

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