June - 2003 issue > Cover Story

By Karthik Sundaram

It is very simple to win a Nobel prize in Physics,” says Eli Goldratt, educator, author, scientist, philosopher, and business leader. “All you need to do is publish a single paper. Only the paper must be of the caliber that when other physicists read it, they should exclaim, “Oh! My god!” You have a Nobel prize.” Goldratt is, first and foremost, a thinker who provokes others to think. Often characterized as unconventional, stimulating, and “a slayer of sacred cows,” Dr. Goldratt exhorts his audience to examine and reassess their business practices with a fresh, new vision.

“If you ask a programmer to estimate the time he or she will need to complete a particular task, the programmer will unknowingly add a safety buffer to his estimate. Compile a dozen tasks like this towards a large project, and you have disaster waiting just around the corner,” propounds Goldratt. When you strive to finish each task on time, it is almost guaranteed that the project won’t finish on time. Goldratt proposed that a better way to plan project schedules would be to strip all the tasks of the safety buffers and introduce buffers to the project instead.

Sanjeev Gupta was an employee at Xerox, where he chanced upon a book written by Goldratt, The Goal. Written like a novel, it told about how a plant manager was struggling to get his company to speed, against a whole bunch of seemingly impossible scenarios. Gupta tried a few of the lessons that Goldratt proposes within his department and found them to work wonders. Not surprisingly, he quit Xerox and founded a company, Throughput, where he developed solutions for the manufacturing industry. After a successful acquisition of Throughput, Gupta and some of his colleagues spun out a project management solution from Throughput and founded another startup—Speed to Market. Rechristened Realization recently, the company has built out a project management software suite that is delivering some very good results for clients. Um, of course, it derives its logic from more of Eli Goldratt’s theories, explained in Critical Change.

“Microsoft’s Project is good for the desktop, for single projects. In an enterprise, there are multiple projects, tasks, and thus, innumerable areas for failure. What we are tackling here is the animal called uncertainty,” says Gupta. For simplicity’s sake, in typical project management such as critical path method (CPM, invented in the sixties), task durations are treated as if they are deterministic, when in fact they are highly probabilistic. Project managers are attempting to simplify their jobs using methodologies that were designed before the advent of computers, unknowingly causing many undesirable effects.

The Internet, prolific PC-enabling of the enterprise, and the drastic shortening of timeframe perception in project completion, says Gupta, gave him the macro-picture of the Valley’s need. “Projects became all important for the Valley to survive, and the need to manage projects assumed critical importance,” Gupta says. “But many of the project management styles were from pre-PC days, and were directly translated to an online tool.” Despite spending over $1 billion in project management software, business worldwide agree that hardly 10 percent of projects are completed on time, within budgets or in total scope.

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