SILICON VALLEY – May 13, 2004 – “Starting all projects as soon as possible is both futile and counter-productive,” asserts Realization Technologies CEO Sanjeev Gupta. “That’s why over $2 billion per year is wasted on project management software. Companies are learning that throwing more software at software problems won’t work anymore. Whether it’s called ‘project portfolio management,’ ‘enterprise project management’ or ‘collaboration project management,’ users simply get more reports, more graphs, and more useless information. Projects are still delivered late, over budget and under scope.”
Funded entirely by customer revenues, an unusual undertaking in the Valley of Venture Capitalists, Gupta and his senior staff began researching project management software about seven years ago. They soon realized that traditional project software was simply implementing and automating the old rules of single projects, not relating to the different circumstances of multiple projects. These single project rules were the problem in multiple projects. The software vendors and analysts were caught in an automation trap.
“For instance,” Gupta explains, “with a single project, it is always good to get a head start. After all, there will always be uncertainties that will slow you down. With a single project, you want to begin it as soon as the requirements are nailed down.
“To the contrary, in multi-project situations, it is the most limiting resource that will determine how many projects can be done. Starting all projects as soon as possible gives rise to unnecessary bottlenecks, causes confusion about priorities, and induces multitasking. Productivity drops, headaches increase, and projects miss their targets. That’s why we developed Multi Project Flow, which breaks the old rules.”
Rule 1 of Project Flow is to identify the most limiting resources across all projects and help executives select the most profitable project/product mix given those constraints. Work is released into execution based on the availability of the constraints.
It then realizes that, since there will be uncertainties, one needs to assign buffers, or slots of unused time, where they will do the most good (Rule 2). From that point on, buffer management becomes key and execution priorities are based on relative buffer consumption (Rule 3).
“Could you ever explain that to a venture capitalist in your elevator pitch?” laughs Gupta. “We couldn’t. But we could easily communicate our solution to customers who were suffering at the hands of project management software. And we were pleasantly surprised when they were willing to pay a multi-fold premium for software that delivers what they need. We are fortunate; we do not need to go to the V.C.’s and can build our company around customer successes instead of sales and marketing hype.”
Today, less than five years later, Realization Technologies has over 100 customers, from the U.S. Air Force, Marine Corps and Navy to LSI Logic, Pfizer, and Siemens, among others. Best of all, customers are reporting stellar successes. For instance, NASA reports, “Our performance metric has improved by an impressive 25 percent."