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PUBLISHED DATE: - 23-11-2024
https://doi.org/10.37547/tajet/Volume06Issue11-07
PAGE NO.: - 54-62
ADAPTING SYSTEMS ENGINEERING TO
EVALUATE TECH STARTUPS: AN
INNOVATIVE FRAMEWORK BASED ON OMG
ESSENCE
Illia Shkirenka
Fractional CTO, Startup Advisor, Mentor at ULTRA.VC and Founder
Institute, Jakarta, Indonesia
ORCID: https://orcid.org/0009-0000-3256-9320
INTRODUCTION
In the context of the rapid growth of technology
startups, investors and mentors face a significant
challenge in objectively evaluating such projects.
Technology startups are characterized by high
uncertainty, complex structures, and a fast pace of
change, which makes their analysis difficult using
traditional methods. Standard approaches to
evaluating startups, which often focus on financial
and business indicators, are not always capable of
reflecting the technical aspects of a project, such as
architectural decisions, the degree of technological
innovation, and the team's competencies. These
RESEARCH ARTICLE
Open Access
Abstract
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elements play a key role in the future success of the
project but remain outside the scope of classical
evaluation methods.
Currently, there are several commonly used
methods for evaluating startups, such as the
Business Canvas model, product life cycle analysis
techniques, evaluation tables, and success metrics.
However, these approaches often do not take into
account all the technical risks and specificities of
startups, limiting themselves to a superficial
analysis. Moreover, many of them are poorly suited
to the dynamic conditions of technology project
development, leading to an incomplete picture of
the startup’s status and reducing the accuracy of
forecasting its success. In such situations, there is
an increasing need for a more systematic and
structured approach that can consider all aspects
of the product life cycle and provide a detailed
technical analysis.
The development of a new evaluation method
based on systems engineering principles allows for
consideration of the technological characteristics
of startups and a more accurate assessment of
their prospects. Systems engineering, by
integrating various disciplines and focusing on
comprehensive project management, offers a
universal tool for evaluation, covering both
technical and organizational aspects. The OMG
Essence standard, developed to formalize
processes and improve interaction among project
participants, provides a convenient platform for
creating such a framework. It allows the
structuring of key project elements and the
tracking of their evolution at each stage of the life
cycle.
The goal is to develop an innovative framework for
evaluating technology startups based on systems
engineering and the OMG Essence standard.
METHODS
Widyani Y. notes that the Essence standard was
approved by the International Object Management
Group (OMG) to formalize methods and practices.
The Flow System has also integrated this standard.
Essence allows the structuring of practices and
related information in an accessible and visual
form. This ensures their easy transfer,
understanding, and further adaptation, either
independently or in combination with other
methodologies. In turn, the Flow System applies an
extended version of the OMG standard, covering all
aspects of complex system management [1].
Samar Batool Shirazi S. and Saud Khan M., in their
article "State of Research Based on Essence," note
that the OMG Essence standard (Kernel and
Language for Software Engineering Methods) was
developed as part of the SEMAT initiative and
published in November 2014. It consists of two key
components: a language designed to describe
software engineering methods and a kernel,
representing a set of entities reflecting
methodological approaches in this field.
As for the language component, Essence
represents a new stage in the development of
situational method engineering standards,
significantly differing from its predecessors, such
as OMG SPEM 2.0 and ISO 24744. The main
innovation lies in a fundamental simplification: the
language has become less academic, the notation
has been simplified, and the methods of
application have been reduced to practical tools,
such as visualization through cards. However, this
"simplicity" may be perceived as excessive in some
aspects. For example, instead of the usual terms
"ontology" or "meta-model," Essence uses the
expression "common ground" [2].
The life cycle of a standard project, as described in
OMG Essence, is represented through the
integrated interaction of all key alphas. The
transition between alpha stages is facilitated by
checklists provided in the standard for the initial
stage. Subsequently, the project method can be
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customized to specific conditions, offering broad
opportunities for customization. In cases where
standard checklists do not fully reflect the specific
tasks of the project, new items can be added, or
their placement between project phases can be
modified, depending on the dynamics.
Additionally, the standard allows for the inclusion
of extra alphas if the integrated representation
proves insufficient. Alpha is an abstract entity that,
in practical work, is projected onto physical
objects: for requirements, these are documents;
for the system, components, and modules; for
work, tasks; and for the team, the actual
participants in the process. These physical objects
move through the stages of development, testing,
and operation, gradually evolving as the project
progresses.
Essence must allow for tracking not only changes
in these objects but also the state of individual
integral aspects, such as the team's competencies
when implementing new technologies or the
identification of strategic alphas necessary for
project development. A distinctive feature of
Essence is its approach to adaptation: it suggests
starting with simplicity and adding complexity as
needed, in contrast to models like RUP or PMBOK,
which are complex from the outset and require the
exclusion of unnecessary elements, potentially
disrupting system integrity [3].
This approach makes Essence a convenient tool for
use not only in complex projects but also in focused
tasks. For example, the experience of CUSTIS,
described by Olga Tsyganova at the "Applied
Systems Thinking" conference, demonstrates the
successful use of Essence for team formation,
which is relevant to many IT companies. The ease
of mastering Essence was a crucial lesson that Ivar
Jacobson learned from developing RUP, and this
aspect was central in the creation of the standard.
In this context, it is interesting to note the
experience of Anatoly Levenchuk, who actively
applied Essence in his course at MIPT, replacing
previous standards with it [4].
Essence provides for five standard levels of
competence:
- Basic level
—
an individual has initial knowledge
and is capable of performing tasks under
supervision.
- Practical application
—
a specialist can
independently apply knowledge in simple contexts
and accumulate experience.
- Expert proficiency
—
a specialist demonstrates
confident application of knowledge in various
situations and can work without constant
supervision.
- Adaptation
—
a specialist can adapt and apply
knowledge in complex conditions and transfer it to
others.
- Innovation
—
a specialist is a recognized expert
who develops new approaches and inspires others
to implement innovations [4].
The framework developed based on the OMG
Essence standard represents a universal tool
suitable for use in various software development
scenarios. This standard, grounded in academic
principles, encompasses a wide range of methods
and practices, beyond the scope of this review. A
thorough immersion into the content of the
standard allows for a deeper understanding of its
application and offers valuable insights for
optimizing development processes.
Systems engineering is a multidisciplinary field
aimed at designing, integrating, and managing
complex technical systems throughout their entire
life cycle [5].
Thus, systems engineering integrates across a
broad range of disciplines, providing effective
management of complex projects in various
industries.
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RESULTS
Large corporations such as NASA, Boeing, SpaceX,
Virgin, Lockheed Martin, Siemens, and others
widely use systems engineering to simplify the
management of complex projects, minimize risks,
and ensure that products comply with strict
standards. In 2014, the Essence standard was
introduced, serving as a guideline for the
development, implementation, and improvement
of software development methodologies. This
standard is supported by the International Open
Standards Consortium (OMG) and is part of the
SEMAT initiative. SEMAT stands for "Software
Engineering Methods and Theory" and was
initiated in 2009 by Ivar Jacobson, Bertrand Meyer,
and Richard Soley [6].
Let us take a closer look at the core of the Essence
standard. In this context, a "problem area" refers to
a specific aspect or direction in software
development that requires attention. Within a
business context, these areas are key elements of
product creation and form the foundation for the
successful functioning of the organization:
- Customer: covers all processes related to the use
of the product and its operation, ensuring value for
both customers and end-users.
- Solution: encompasses all aspects related to the
development and specification of the product,
aimed at meeting customer requirements.
- Endeavor: covers everything related to teamwork
and methodology, aimed at the effective
realization of the solution for the customer.
This model provides opportunities for more
effective management of key tasks related to
customer needs, solution development, and team
organization (Fig.1).
Fig.1. Diagram of the Essence standard model [6].
These areas and related activities form a structured framework for addressing numerous
tasks in software development, enabling a
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thorough analysis of the key aspects involved in
this process. In each area, so-called alpha elements
are identified, which can be interpreted as key
indicators requiring attention and management at
various stages of development. These alpha
elements, representing dynamic components of a
project, require constant monitoring and
management to achieve successful outcomes. Each
element has specific stages, and tracking the
changes in these stages helps objectively assess the
current state and progress of the project. The
interrelationship between alpha elements is also
considered, allowing for a more precise
understanding of the mutual influence of processes
and stages.
Alpha versions, with all their states and stages,
serve as indicators of the project's current status,
helping to identify problem areas that require
attention, as well as providing the ability to track
overall progress and the effectiveness of
implemented solutions. Based on the standard, key
metrics are proposed that are important for
understanding the completeness and effectiveness
of the startup development process:
- Stakeholders
—
individuals or groups whose
actions can directly impact the success of the
system.
- Opportunities
—
factors or conditions that create
prospects
for
system
development
or
improvement.
- Requirements
—
descriptions and characteristics
of the system that need to be implemented.
- Software system
—
the software platform itself,
the result of the development process.
- Work progress
—
necessary planning, task
execution, and control throughout the project
lifecycle.
- Team
—
specialists with the required
competencies, including both technical and
management skills.
- Way of working
—
approaches and tools used by
the team to achieve project goals.
The OMG Essence standard proposes the use of
checklists for monitoring the status of alpha
elements. These checklists help track project
progress, identify deviations from the plan, and
promptly respond to emerging issues, allowing for
the maintenance of project balance and the
prevention of potential failures.
DISCUSSION
The implementation of the mentorship concept for
startups can become an important strategic tool,
fostering the development and support of
entrepreneurial projects at every stage of their
formation. This framework also might be applied
to the VC due diligence process. One effective
method is the use of a mental model for analyzing
and interviewing startup teams, which enables an
assessment of the current state of the business and
its growth dynamics.
For example, during the first interview or series of
interviews during due diligence with a startup
team, it is crucial to gather comprehensive data
that will serve as the foundation for making precise
management decisions. A lack of such information
can lead to distorted perceptions, which may affect
the success of the project. Using the Essence
system as a tool for evaluation allows for an in-
depth analysis of the business's current state,
ensuring that every critical area is addressed.
At the initial stage, special attention is given to the
analysis and study of the customer base. A key
aspect is forming a clear understanding of the
target audience. Detailed research on the target
group, confirmation of the problem's existence,
and ensuring a deep understanding of the interests
of all involved parties play a significant role in the
successful implementation of the project.
Additionally, assessing the economic feasibility of
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the project, considering factors such as cost
structure, market needs, and competitive
advantages, is of critical importance (Fig.2).
Fig.2. The client in the Essence standard [6].
The alphas of opportunities and stakeholders
serve as key benchmarks in project analysis. The
opportunity alpha focuses on identifying the
problem the startup is addressing, as well as
assessing the market presence for the proposed
solution and the potential for team interaction. The
stakeholder alpha involves examining the main
participants involved in the project, such as
customers, partners, and investors. For a thorough
analysis, the following questions can be
considered:
- What factors define current market trends for
this project? Is there a demand for the proposed
initiative?
- How many interviews with potential customers
have been conducted, and what conclusions can be
drawn from them?
- Are customers aware of the problem the startup
is solving?
- How deeply does the team understand the needs
and pain points of its target audience?
- What arguments support the idea that the team
has sufficient resources and competence for the
successful implementation of the project?
- Who among the project participants are the key
stakeholders, and what are their roles?
- Have all significant stakeholders been considered
in the project development process?
- How is the team's interaction with the main
stakeholders organized?
These questions can form the basis for interviews,
allowing for deeper discussion and revealing
additional aspects as the conversation progresses.
At the next stage, known as the "Solution," work is
conducted with system requirements and the
overall software. This stage involves a detailed
evaluation of the proposed technical solution to
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determine its alignment with the customers' needs
and expectations. Special attention at this stage is
given to the study of project and architectural
documentation, as well as other materials that
describe the system in detail. The requirements
must be based on the analysis of stakeholder
opinions and should take into account potential
business opportunities.
Fig.3. The principle of operation of the solution stage in the Essence standard [6].
Aspiration. At this stage, most system components
have been reviewed, and attention is now focused
on the final problem area
—
"Endeavor" which
encompasses all actions necessary to ensure the
full functioning of the system (Fig.4).
Fig.4. Description of the principle of aspiration in the Essence standard [6].
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This section provides a detailed analysis of the
team, tasks, and methods for their implementation.
The team is considered a group of specialists
possessing the necessary competencies to execute
the project. It is important to account for not only
technical skills but also managerial and other
applied abilities. The success of the project largely
depends on work planning and regular monitoring
of its execution. The way processes are organized
describes the team’s approach to solving tasks,
including the use of methodologies, frameworks,
and technologies.
The concept of relationships acts as a navigational
tool, helping to determine how various elements of
the startup interact with each other. This is crucial
for forming a holistic understanding of processes
and creating structured interview questions [6].
Thus, the OMG Essence standard serves as a
powerful tool for assessing software solutions and
startups. This approach helps more accurately
identify the current stage of business development
and ensures careful consideration of critical areas
when making strategic decisions.
Moreover, while the Essence standard provides a
reliable foundation for evaluating software
solutions, it should be noted that other models,
such as the "Lean Canvas," "Value Proposition
Canvas," and "Business Model Canvas," also exist.
These models provide valuable data for evaluating
business development, and in combination with
Essence, allow for a comprehensive analysis of
startups and software products, forming more
effective strategies. The application of such a
system can significantly improve the quality of
management and development, contributing to the
success of projects in various fields.
CONCLUSION
The framework proposed in this study, based on
the OMG Essence standard, has demonstrated its
value for evaluating technology startups by
providing a systematic and structured approach to
analyzing their development. The application of
systems engineering allowed for deeper
integration of key aspects such as project
architecture, technological solutions, and team
competencies, which traditional methods often
overlook. The framework successfully covered the
entire startup life cycle, enabling more accurate
tracking of progress and improving project
management.
The main advantage of using OMG Essence lies in
its ability to adapt to the specifics of each project
and provide flexibility in customization to meet
particular conditions. Through the structure of
alphas and checklists, the framework not only
allows for the evaluation of the current state of a
startup but also helps predict its future
development, identifying risks at early stages and
making timely adjustments to the team's direction.
This is especially important for startups with high
levels of uncertainty, where decision-making
requires precision and comprehensive analysis.
Thus, the proposed method for evaluating
technology startups opens new horizons in project
management, minimizing risks and enhancing
process efficiency. It can be effectively applied not
only to startups but also to large technology
companies that require optimization in managing
complex projects. Additionally, the OMG Essence
framework serves as a valuable tool for venture
investors, particularly during due diligence and in
the search for promising startups. With its
structured approach, it enables investors to gain
deeper insights into a project’s viability, assess its
current maturity, and identify critical areas that
need improvement. A key feature of the framework
is its ability to analyze startups at the level of
fundamental elements, such as the team,
technology, and market. This provides a
comprehensive view of potential risks and growth
opportunities. Such an approach not only enhances
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the quality of analysis but also supports more
informed investment decisions focused on long-
term success.
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