File: 2026.10.26 - Lumenwire Audio - 01 Business Requirements.md
Lumenwire Audio: Business Requirements
Test case. Lumenwire Audio is a made-up company. Marcus was played by the case's stakeholder agent. Data is Sample data.
1. Document control
| Field | Detail |
|---|---|
| Version | 1.1 |
| Date | 26-Oct-26 |
| Status | Approved, with the Stage 2 challenge changes |
| Author | Gary, business requirements lead (KPI Creator, Stage 1) |
| Stakeholder | Marcus, co-founder and CEO, Lumenwire Audio |
| Sign-off | Marcus confirmed the playback with corrections, 26-Oct-26. Stage 1: Adam approved 26-Oct-26 (acting subject matter expert, test mode), including the v1.1 changes. Pending: the Head of Platform Engineering for the telemetry KPI; the CFO for the forecast KPI |
| Source record | 2026.10.26 - Lumenwire Audio - 01 Meeting Script.md |
2. Problem Statement
Revenue fell by about a third in a year, from A$118.4m to A$80.6m, and the board was caught by surprise because nobody puts the Finance, Sales and Engineering numbers together. Nobody can yet show, from one set of numbers everyone trusts, whether the business is still growing underneath the fall.
As stated by Marcus: Revenue went from A$118.4m in FY25 to A$80.6m in FY26, down about a third. The board says they were blindsided, and Ros (chair) wants to see the business properly, not just a quarterly P&L. The board wants revenue back to A$115m within two years and a view it can trust each month. Marcus believes hardware fell because of an industry soft patch (tariffs, interest rates, delayed venue projects, cautious OEMs), while software grew 38% to A$25.7m, gross margin rose from 71% to 77%, and there was a record 1,180 design wins. Q1 FY27 came in at about A$19m.
As Gary understands it: The fall itself is known. What's missing is one joined-up view that tells the board whether the business underneath is healthy or whether more falls are coming. Marcus has a story he wants the board to see, but by his own account: design-win conversion has never been measured, the CRM is bonus-driven, the forecasts aren't trusted, and the telemetry has never been used as an end-customer view. The dashboard has to test that story, not just tell it. The word to come back to is Marcus's own: "growing underneath the fall".
↑ Back to top3. Objectives
| ID | Objective | How it helps solve the Problem Statement |
|---|---|---|
| O1 | Get revenue back to A$115m within two years (date to confirm with the board) | The board's headline measure of recovery |
| O1.1 | Know whether we're still growing underneath the fall (Marcus's words) | The question nobody can answer today |
| O2 | Keep software growing, with gross margin holding up | Shows whether the part Marcus calls "the future" is real |
| O3 | Keep design wins turning into shipping products | Tests the leading indicator Marcus relies on but has never measured |
4. Audience and decisions
| Audience | Decisions | How often | Format |
|---|---|---|---|
| Chair (Ros) and the board | Are we still growing underneath the revenue fall? Do we keep pushing software? | Monthly | One page in the board pack, and on screen between meetings. Phone: unknown |
| CEO (Marcus) and exec team: CFO (Priya Anand), VP Sales (Gemma Lowe), Head of Platform Engineering (Tomasz Wierzbicki) | Where to put sales and engineering effort; whether to keep pushing software; which actions the board hears about each month | Monthly (to confirm) | Screen (to confirm) |
| Sales team | Where to focus, using the same numbers as Finance | Unknown | Unknown |
5. Business Requirements with Data Mapping
Owners are roles. Targets and thresholds are Gary's proposals unless marked "Marcus". Every measure is marked Draft: Kewpie to confirm.
5.1 Top 5 KPIs (what and why)
| KPI | Objective | Type | What do we want to know? | Why? | Action if outside threshold | Action owner | Priority |
|---|---|---|---|---|---|---|---|
| Total revenue, last 12 months, against the path to A$115m (K1) | Revenue back to A$115m (O1) | Lagging | Is revenue tracking towards A$115m, split hardware and software, as a trend | The board's headline target; the board hears from the CEO first | CFO takes the forecast apart OEM by OEM; CEO changes the sales plan and effort and briefs the board early (Marcus) | CEO | Must Have |
| New devices activated in the field, last 12 months against the year before (K2) | Growing underneath the fall (O1.1) | Leading | Are end customers still installing our devices, whatever OEMs are buying now | If installs hold while hardware revenue falls, OEMs are running down stock; if installs fall too, it's demand | VP Sales moves effort to regions and OEMs where installs grow; CEO tells the board whether it's demand or stock (Gary's proposal) | VP Sales | Must Have, pending Head of Platform Engineering; off page one until then |
| Software revenue growth without one-off large licences, last 12 months against the year before (K3) | Software growing (O2) | Lagging | Is software growth real and repeatable (total including large licences shown alongside) | Decides whether to keep pushing software | CEO and Head of Platform Engineering check the product; VP Sales checks the sales effort (Marcus) | CEO | Must Have |
| Design wins that ship, as a % of design wins old enough to have shipped (K4) | Design wins to shipping (O3) | Leading | How many design wins actually ship | Never measured; record design wins only matter if they ship | VP Sales refocuses on wins that will ship, not ones that earn a bonus; Head of Platform Engineering checks engineering support (Marcus) | VP Sales | Must Have |
| Forecast accuracy: actual quarterly revenue against the forecast at the start of the quarter (K5) | Revenue back to A$115m (O1) | Leading | Can we trust the forecast, so the board isn't blindsided again | Forecasts aren't trusted; Sales and Finance argue | CFO rebuilds the forecast OEM by OEM, one number for Finance and Sales (Marcus) | CFO | Must Have, pending CFO; off page one until then |
5.2 Targets, thresholds and sign-off
| KPI | Target (SMART) | Evidence | Green | Amber | Red | SME sign-off |
|---|---|---|---|---|---|---|
| Total revenue, last 12 months (K1) | A$115m by 30 Jun 2028 (the board's "within two years"; date to confirm, Q-1). The FY27 plan is FY26 × 1.15 on every line, so it repeats the Mar-26 one-off licence: without it the plan is A$84.2m, not A$92.7m. CFO to confirm whether it should | Observed Fact (value, Marcus); Strong Inference (date) | On or above straight-line path from A$80.6m (FY26) to A$115m | Up to 5% below path | More than 5% below. The FY27 board plan (A$92.7m) is shown as a second line; it sits 5.2% below the path at Jun-27, so delivering the plan reads Red. CFO to say which line the board measures against (Q-1, Q-2) | CEO, 26-Oct-26; Adam, 26-Oct-26 |
| New devices activated (K2) | At least 5% growth year on year by 30 Jun 2027 | Working Hypothesis | 5% or more | 0% to under 5% | Falling | Pending Head of Platform Engineering; Adam, 26-Oct-26 |
| Software revenue growth without one-off large licences (K3) | Back to growth (0% or more, without large licences) by 30 Jun 2027, against -15.6% now. To be agreed by VP Sales and CFO (Q-3) | Working Hypothesis | 0% or more | -10% to under 0% | Below -10% | CEO, 26-Oct-26; Adam, 26-Oct-26 |
| Design wins that ship (K4) | 35% by 30 Jun 2027, from 31.5% (Sep-26). To agree with the VP Sales once the 18-month window (Q-11) and CRM date back-fill are settled. Marcus's 80% was a belief, not a measure | Working Hypothesis | 35% or more | 30% to under 35% | Under 30% | CEO, 26-Oct-26; Adam, 26-Oct-26 |
| Forecast accuracy (K5) | Within 10% of actual for FY27-Q4 (30 Jun 2027), on the forecast the CFO chooses; Finance and Sales both shown until then (Q-5) | Working Hypothesis | Within 10% | 10% to 20% out | More than 20% out | Pending CFO; Adam, 26-Oct-26 |
5.3 How measured (Draft: Kewpie to confirm)
| KPI | How measured | Data source and fields | Filters and conditions |
|---|---|---|---|
| Total revenue, last 12 months (K1) | Sum of revenue over the last 12 months, each month, against a straight line from A$80.6m (Jun-26) to A$115m (Jun-28). R12M = -1 × SUM(gl_monthly.amount_aud) for revenue accounts; path(m) = 80.6m + 34.4m × months since Jun-26 / 24 | gl_monthly.amount_aud, period, account_code and gl_accounts.pl_group: the P&L Marcus trusts, same as the board pack. erp_invoice_lines.product_family as a cross-check | Revenue accounts 4000, 4050, 4100, 4110, 4200, 4210; flip the sign (credits). Rebates (4050) reduce revenue. Hardware = 4000, 4050, 4200; software = 4100, 4110. Reconcile to the stated A$118.4m and A$80.6m. Latest complete month |
| New devices activated (K2) | Devices joining a network for the first time in the last 12 months, against the 12 months before. COUNT(DISTINCT device_serial) by first_seen_ts | device_activations.device_serial, first_seen_ts; oem_id, country_from_ip, module_sku for splits. Engineering telemetry, the source Marcus trusts most | One row per device. Sample data is 1 in 10 devices: counts × 10 (growth % unaffected). Exclude test or beta-firmware devices if the Head of Platform Engineering says so (Q-4). Sample data from Jan-21 |
| Software revenue growth without one-off large licences (K3) | Software revenue last 12 months ÷ the 12 months before, minus 1, leaving out any single licence over A$1m (threshold to agree with the CFO). Total growth shown alongside | gl_monthly accounts 4100 (perpetual licences) and 4110 (subscriptions); software_licences.contract_value_aud as a cross-check | Sign flipped; latest complete month; July to June year |
| Design wins that ship (K4) | Of opportunities that reached design win at least 18 months ago, the share that have reached shipping | crm_opportunities.stage_entered_design_win, stage_entered_shipping, stage, stage_entered_lost; owner, region, oem_id for splits. erp_invoice_lines.oem_id, sku to confirm shipping, since the CRM is bonus-driven | 18-month window (Gary's proposal, Q-11). Exclude rows with no design-win date and report how many. Lost after design win counts as not shipped |
| Forecast accuracy (K5) | Each quarter: ABS(actual - forecast) / actual, for each forecast source | forecast_snapshots.forecast_amount, amount_unit, source, forecast_quarter, snapshot_date, product_family; actuals from gl_monthly revenue accounts | Convert AUD thousands to AUD. Use the snapshot on or before the quarter start (CFO to confirm, Q-5). Match product family to revenue accounts. From FY24 Q1 |
5.4 Sub-KPIs (they explain a Top 5 KPI)
| Sub-KPI | Parent | What it explains | Action and owner | Draft measure and source (Kewpie to confirm) |
|---|---|---|---|---|
| Months of stock cover at the OEMs that report (35 today, 46% of FY26 hardware revenue) (K2.1) | New devices activated (K2) | Whether OEMs are still sitting on stock or about to reorder, which explains installs holding while invoices fall | VP Sales tells the CEO a hardware recovery is likely and plans for it (Gary's proposal). Target 6 months or less by 30 Jun 2027 (10.9 now, 2026-Q3, units invoiced). Green 6 or less, Amber over 6 to 9, Red over 9. Pending with K2 | Units on hand at reporting OEMs (reels × 500) ÷ those OEMs' average monthly units activated or invoiced (Kewpie to confirm which), by calendar quarter; units on hand shown alongside; names matched to oem_master |
| Share of software revenue from the largest licences (K3.1) | Software revenue growth (K3) | Marcus's "how much of it comes from one big licence" | VP Sales shows growth without the biggest licence and plans the renewal (Gary's proposal). Green under 10%, Amber 10% to 20%, Red over 20%. Shown with and without the largest licence; while the Mar-26 licence is in the window (to Mar-27), the tile says so in words | Largest (and top 5) software_licences.contract_value_aud ÷ total, licences starting in the last 12 months. No customer names on the board page |
| Gross margin %, last 12 months (K3.2) | Software revenue growth (K3) | Marcus's "gross margin holding up" | CFO explains mix, cost or price (Gary's proposal; Marcus gave no action). Target 76% or more for FY27, the board's figure (BT-03, Finance), CFO to confirm. Green 76% or more, Amber 74% to under 76%, Red under 74%. Shown with and without one-off licences | (revenue - cost of sales) / revenue from gl_monthly by gl_accounts.pl_group |
| Months from design win to first shipment (K4.1) | Design wins that ship (K4) | Marcus's "how long it takes" | Head of Platform Engineering checks engineering support. Thresholds after baseline | Median months between stage_entered_design_win and stage_entered_shipping |
| Design wins per quarter (K4.2) | Design wins that ship (K4) | The count Marcus watches, read against conversion | VP Sales reviews how design wins are logged if the count rises while conversion falls (Gary's proposal) | Count of stage_entered_design_win by financial quarter |
6. Backlog (Nice to Haves)
| Item | Reason |
|---|---|
| Underlying earnings (EBITDA) | No action named; Marcus dislikes "accountant metrics". He isn't sure it's a Nice to Have but agreed to park it. Revisit once the CFO gives the FY27 targets |
| Design wins per quarter as a page-one headline | Reps are paid per design win with no clawback, so it can be inflated. Kept as a sub-KPI under Design wins that ship (K4) |
| Paid software features switched on in the field (telemetry) | Gary's idea; not raised by Marcus, no owner or action. Revisit after the Head of Platform Engineering explains the telemetry |
7. Data inventory
History and refresh for every system are unknown to Marcus (Q-6). Sample data ranges shown for reference only.
| Source (owner) | Tables in the Sample data | Grain | Marcus on trust | Quality notes |
|---|---|---|---|---|
| Finance ERP and ledger: P&L and board pack (CFO) | gl_monthly, gl_accounts, erp_invoice_lines, sales_orders, oem_master | Month by account; invoice line | Trusts the P&L for what it shows | Ledger credits are negative. Sample data Jul-19 to Sep-26 |
| Forecasts (CFO and VP Sales) | forecast_snapshots | Snapshot by source, quarter, product family | Doesn't trust Finance forecasts: built off last year's run rate | Mixed units (AUD and AUD thousands) |
| Sales CRM (VP Sales) | crm_opportunities | Opportunity | Trusted less than the P&L: reps work to a bonus | 33% of rows (2,932 of 8,990) have no stage dates. Data requirements: VP Sales to back-fill stage dates; VP Sales and Finance to add a shared product or SKU key between the CRM and the ERP |
| Engineering telemetry, Grafana (Head of Platform Engineering) | device_activations, device_heartbeat_monthly | Device at first join; device by month | Trusts it most; "covers basically everything out there" | Never used as an end-customer view. Sample data is 1 in 10 (activations) and 1 in 200 (heartbeat) |
| OEM stock reports (VP Sales) | oem_inventory_reports | OEM, quarter, SKU | "A bit patchy"; never looked at them | Top 40 OEMs, free-text names, calendar quarters |
| Software licences (CFO, Marcus thinks) | software_licences | Licence contract | Not stated | Not stated |
| Board targets and FY27 budget (CFO) | board_targets, board_plan_fy27, board_budget_fy27 | Target; month by product group or P&L line | Marcus doesn't know the FY27 targets | Not adopted until the CFO walks through them (Q-2) |
| Account manager bonus plan (People team) | sales_incentive_plans | Plan year, role | Context for "reps are working to a bonus" | Reference only |
8. Constraints and chart preferences
- One page, monthly, for the chair and the board; on screen as well as in the board pack
- Things people in the business can act on. No "accountant metrics" (Marcus)
- Sales and Finance use the same numbers
- New devices activated (K2) and Forecast accuracy (K5) stay off page one until the Head of Platform Engineering and the CFO have given their view
- Naming OEMs on the board page: CFO and legal to decide. Be careful naming customers
- Show the trend towards A$115m, not a single point. All three outcomes on one page
- Tools and other chart preferences: ask the VP Sales or CFO
- Data request: add a required "reason lost" field in the CRM for any opportunity lost after design win (owner: VP Sales). The design-win bonus (A$400 per win, no clawback) is referred to the VP Sales, CFO and People team, and is outside this project
9. Assumptions
| Assumption | Evidence |
|---|---|
| FY25 revenue A$118.4m, FY26 A$80.6m; software A$25.7m (up 38%); gross margin 71% to 77%; 1,180 design wins; Q1 FY27 about A$19m. Stated by Marcus, not yet calculated | Working Hypothesis |
| Financial year runs July to June | Observed Fact |
"Within two years" means the year ending 30 Jun 2028. The Sample data's board_targets lists A$115m for FY28, set by the Board on 26-Aug-26. Marcus asked that the date be confirmed with the board | Strong Inference |
| About 80% of design wins ship (Marcus's belief, never measured) | Working Hypothesis |
| Device activations show what end customers install, not what OEMs buy (Gary's proposal) | Working Hypothesis |
Since FY25, account managers are paid A$400 per opportunity moved to design win, no clawback if later lost (sales_incentive_plans) | Observed Fact |
| All owners, actions, targets and thresholds not marked "Marcus" are Gary's proposals | Observed Fact |
10. Open questions
| ID | Question | Owner | Due |
|---|---|---|---|
| Q-1 | How was the A$115m set, and does "within two years" mean the year ending 30 June 2028? | Chair, via the CEO | 6-Nov-26 |
| Q-2 | What are the FY27 targets for revenue, gross margin, earnings, software and design wins, and where did each come from? | CFO | 6-Nov-26 |
| Q-3 | What target should Software revenue growth without one-off large licences (K3) carry, and what size makes a licence "large"? Starting proposal: back to growth (0% or more) by Jun-27; large = over A$1m | VP Sales with the CFO | 6-Nov-26 |
| Q-4 | What can the telemetry show and not show as an end-customer view: coverage, history, refresh, test devices, link to OEMs? | Head of Platform Engineering | 6-Nov-26 |
| Q-5 | Which forecast should Forecast accuracy (K5) measure, which snapshot is "the start of the quarter", and does the CFO support the measure? | CFO | 6-Nov-26 |
| Q-6 | How far back does each system go, and how often does each refresh? | CFO, VP Sales, Head of Platform Engineering | 6-Nov-26 |
| Q-7 | Can OEMs be named on the board page, and can customers? | CFO with legal | 6-Nov-26 |
| Q-8 | Will the chair look at the page on a phone? | Chair, via the CEO | 6-Nov-26 |
| Q-9 | What tools and chart preferences should we follow? | VP Sales or CFO | 6-Nov-26 |
| Q-10 | What happens if nothing changes in the next six months: what's the forecast view? | CFO | 6-Nov-26 |
| Q-11 | How long after a design win should a product be expected to ship (the window for Design wins that ship, K4)? Starting proposal: 18 months | VP Sales with the Head of Platform Engineering | 6-Nov-26 |
Due dates are Gary's proposal.
↑ Back to top11. Change log
| Version | Date | Change | Reason | Approved by |
|---|---|---|---|---|
| 1.0 | 26-Oct-26 | First version from the Stage 1 interview (7 questions). Playback corrected by Marcus: Problem Statement now says "nobody puts the Finance, Sales and Engineering numbers together"; "see revenue coming before it lands" replaced with his words "know whether we're still growing underneath the fall"; A$115m date left to the board; New devices activated (K2) and Forecast accuracy (K5) kept off page one until the Head of Platform Engineering and CFO give their view; earnings parked | Stage 1 interview | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Total revenue (K1): FY27 board plan added as a second line in the threshold note; target rationale notes the plan repeats the one-off licence | Challenge notes C1 and C2 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Software revenue growth (K3): renamed "without one-off large licences", total shown alongside; target back to growth (0% or more); thresholds Green 0% or more, Amber -10% to under 0%, Red below -10% | Challenge note C5 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Share of software revenue from the largest licences (K3.1): shown with and without the largest licence; Red explained in words until Mar-27 | Challenge note C7 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Gross margin % (K3.2): target 77% to the board's 76%; thresholds 76 / 74 | Challenge note C8 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Design wins that ship (K4): target 80% to 35% by Jun-27; thresholds 35 / 30 | Challenge note C9 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Forecast accuracy (K5): target within 5% to within 10%; thresholds 10 / 20; both forecasts shown until the CFO chooses | Challenge note C12 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | OEM stock on hand (K2.1): renamed Months of stock cover at the OEMs that report; new measure; target 6 months or less; thresholds 6 / 9 | Challenge note C14 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Data notes: CRM stage-date back-fill and shared product key; "reason lost" field request; bonus referred out | Challenge notes C10 and C11 | Adam (acting SME), 26-Oct-26 |
| 1.1 | 26-Oct-26 | Months of stock cover at the OEMs that report (K2.1): baseline corrected to Kewpie's measured figure (no target change). Before: "9.3 now". After: "10.9 now, 2026-Q3, units invoiced" | Kewpie's confirmed measure (divisor: units invoiced) | Baseline correction, no new decision |