September 2000

To POOGI forum members,

It‘s a long time since December when I wrote to you last (letter 10 that was sent in March was a copout), so I think I owe you at least an explanation. As I wrote to you, Carol Ptak, Eli Schragenheim and I have decided to quarantine ourselves for the first three weeks of January, in a secluded place, and try to do the impossible: to write a whole book in three weeks. Well, this ambitious plan was shattered already in our first day.

I outlined the content of the book; they were enthused. Then they asked what I wanted to accomplish by the book. I answered. Knowing me for so long, they were not surprised but within minutes they started to argue.

They claimed that in order for the book to have a chance of reaching the impact I wanted, it should not be written as a conventional textbook, it must be written as a novel. I tried everything to point out that writing a novel is at least ten times more difficult than writing a conventional text book, and that it takes ten times longer. That for two people to collaborate successfully on writing a novel they each must be highly experienced novelists. And that three experienced novelists have the experience to not even try.

We argued the entire first day. But Carol and Eli S prevailed. No wonder, they had the logic of why it must be done as a novel, I had only the obstacles. And as TOC experts we knew that obstacles, no matter how big they seem, are no more than challenges.

The next morning we started the work. We agreed on the content, now we had to have the plot. This is not a trivial task. Years ago I spent many days writing the logical tree that explains how a novel that aims to deliver content should be written. Since logical trees don‘t transfer well over e-mail (especially when written on Macintosh) there is no point in attaching them here. Let me just highlight the first difficulty.

What makes a book readable is not its content. I bet that a conventional textbook never had you enticed to the extent that you couldn‘t put it down What makes a book readable is its plot; the plot is the main thing that maintains the readers at-tention ("at-tention", in my English, is the amalgamation of attention and tension). Therefore the plot puts the content in second place. If the plot is really enticing many readers, in their eagerness to follow the plot, may even kip the content sections. That problem does not exist for a detective book, but it is defeating the purpose of a book whose main objective is to teach the content. Can you write the cloud?

The way to evaporate the cloud is to make sure that the content is an integral part of the plot. How?

A plot is a description of the heroes of the book facing obstacles and struggling to overcome them. The content is an integral part of the plot if the heroes overcome the obstacles only through using the content. That requirement alone puts severe limitations on the author, and there are more requirements. It‘s not so simple to devise a good plot for Socratic textbooks disguised as novels.

In my previous "novels" the stage of devising the plot took no less than six weeks. But this time, the prudent questions of Carol and Eli S, their insistence to understand every detail, shrunk it to a record time. In two days we had the written, chapter-by-chapter, layout of the entire book. As it turned out each chapter is told through the eyes of one of three heroes. Scott, the visionary and charismatic CEO of a large software (ERP) company. A company that grew, in less than ten years, from a small company in to a multi-billion dollar giant. Lenny, the co-founder and technical wizard of that company. And Maggie, the CEO of the exploding implementation company that primarily services the clients of Scott and Lenny‘s company.

Carol Ptak, who spent the last twenty years in actual implementations and serves now as APICS president, felt a strong empathy to Maggie. Eli Shragenhaim, is a software wizard; guess which character he empathized with. So it was easy to divide the chapters between us. We wrote during the day and met each night to go over what we‘d written. And then we rewrote and rewrote and... To cut a long story short, at the end of the three weeks I was left with drafts of twelve, non-sequential, chapters (some of them quite good).

To turn what I had in my hands into a real book was not a trivial task. There were two main reasons that made it into a real challenge. One was the desire to cater to the needs of four different types of readers. And as you know, it is not easy to cater to too many masters.

The first two types of readers are dictated by my main objective for the book. The book is intended to remove one of the biggest obstacles standing in the way of a lasting TOC implementation. The obstacle is the company‘s bureaucracy - the forms, procedures and reporting - that currently are based on local optima. Experience has shown that in the long run bureaucracy usually wins. To guarantee a lasting TOC implementation we must change the bureaucracy, which today means to change the computer systems.

This is a very tall order. We need to convince the software providers to significantly modify their systems and we need to convince the companies that use ERP to demand such modified systems. The objective of the book is to accomplish both.

I think that the current environment provides a unique chance to accomplish it. First, let‘s examine the special situation of the ERP providers.

In the early 90‘s there were almost no ERP companies larger than $100 million. But within five years ERP companies started to cross the 1 billion dollar mark. In the second half of the 90‘s, standard growth in the ERP industry was an incredible 40% growth per year, each year. Last year it all changed. The phenomenal growth stopped, some ERP companies had to reduce their staff, some even reached the verge of folding. Talking with several top executives of ERP companies, I got the distinct impression that no one bothered to do an in-depth analysis to pin-point the causes for that change, to find the core problem and to devise a powerful solution; a solution that could bring back the rapid growth.

A book that convincingly shows the real problems that led to the slow down, that shows how those problems can be overcome, and that rigorously proves that as a result the attainable future growth is even bigger than 40% - such book may cause the executives of the ERP companies to seriously consider adopting the changes I recommend.

As for the users of the ERP systems, they are caught between a rock and a hard place. On one hand, ERP is now the acceptable way of doing business. On the other hand, by now ERP has got a nasty reputation. Many companies are talking about very long, expensive and frustrating implementations. Many are claiming that those huge investments didn‘t yield a meaningful return.

On top of it, the growing business pressures are leading to the realization that today‘s competition in not fought just between companies, it is actually fought between supply chains. That is probably the number one reason for the recent popularity of B2B (Business to Business). But, the market is not naive anymore and most users know that just connecting the computers cannot possibly lead to the desired change.

A book that clearly explains the reasons for the users‘ disappointments, that shows what must be done to get from the computer systems quick and significant bottom line return, that convincingly lays out how to do it, and on top of it, shows that doing it leads smoothly to the effective supply chain - such a book may cause companies to demand the right computer systems.

Neither the ERP providers nor their clients are happy with the current situation. That helps. But the real chance comes from the fact that there is another factor that can speed up the change. As we all know, demand from potential clients goes a long way toward convincing the providers to offer what the clients want. Providers offering the right systems go a long way to convince the hesitant prospects to want those systems. We are lucky to have fertile ground for a positive loop that can fuel a chain reaction. And a good, common-sense book might trigger it.

So, you see why, so far, the book must cater to two, very different type of readers. I say different types because people who work for an ERP provider have a very different perspective, objectives and most importantly, different vocabulary than the users. It is not a trivial task to entice both types by the same book.

There is another very important and large group, the implementation consultants. They serve as the necessary bridge between the providers and the final user. Luckily they do not make the task more difficult since a book that will be appealing to the extremes - to both the software providers and the final users - must also be appealing to the implementers.

Besides the above I had to consider a third type of readers, readers that are not particularly interested in the subject of ERP. It stems from my desire to show that any specific subject we deal with, no matter how big, is just an example of an even larger subject. That principle guides me in all my work, including my previous books.

The general message of the book is reflected in its title - any technology is at best NECESSARY BUT NOT SUFFICIENT. This realization is what enables getting a win-win solution for the ERP industry. What I wanted to show is that this principle should be in front of any hi-tech company, no matter what specific technology it is based on. That following the generic process outlined in the book (regarding the specifics of ERP as just an example) is the way to devise the approach to the market. So, the third type of readers that I always had in front of my eyes, were hi-tech managers.

Things become really difficult due to the fact that my publisher asked that the book be aimed at a fourth type of reader. My publisher‘s objective is to sell as many books as possible. Naturally he was pushing for the book to be appealing to a very broad reader base. One of the current attention grabbers is the new world of hi-tech companies. No one who reads newspapers or listens to the news can escape the awareness that there is a new type of industry, the hi-tech industry. An industry that can generate unprecedented fortunes almost overnight and, at the same time, carries unprecedented risks as well. People are interested in knowing more about such companies. How, in these companies, are the wheels turning? How do they operate? And what makes them so unique?

The setting of the book makes it ideal to satisfy this curiosity. Not only that the ERP industry is a typical hi-tech industry, it is a prime example of the opportunities and risks such industries carry.

BUT, the book must be enticing to these readers and that verges on the impossible. Did you ever try to explain a highly technical problem to a novice? Let me tell you, it was not easy at all. For example, it was quite a challenge to write the chapter that explains why optimization algorithms should not control scheduling, when I had to bear in mind that it should also grab the attention of people who probably do not know how to spell ‘algorithm.‘ Judging by the reaction of several test readers it seems as if the mission was successfully accomplished.

The multitude of readers was just one reason that made completing the book a real challenge. The other major reason was the fact that too many chapters were still works-in-progress. As you know, a change in one chapter may require a change in another. That was not trivial because, at that stage what was actually written in each chapter was no longer clear in my mind as each of the chapters went through four or (many) more versions.

I felt like a juggler holding too many balls in the air. The "noise" inside my head reached new records. I hope that you can understand that the last thing that I could afford was to throw into the pot another thing to write (like a letter to the POOGIforum).

Four months later, when all the chapters were finally written, I began the stage that each experienced author is afraid of: EDITING. And this book, due to the way it was written, needed a LOT of editing. By the end of July it was finished. But I was burnt out. Until this letter I could not force myself to write anything longer than three lines.

Instead I kept myself busy doing some related administration stuff. From experience I know that if the book is successful, and does deliver the overall message, then people who want to proceed on it will have many unanswered questions. To answer those questions I initiated two events. One is a 1.5 days seminar that is organized by Exclamation Point. I‘ll be giving the entire seminar and I‘ll assume that the audience had already read the book. It will be held in Indianapolis on the 8 & 9 November.

The other event is a live satellite program, which I‘ll present on 30 Nov and 1 Dec (4 hours each day) and which will cover the same material. This event is organized by NTU.

Looking on the last eight pages I think that I‘m over the hump. I can again bring myself to write. Thank you.

And now my questions:
1. Are you concerned, as I am, about the need to modify the bureaucracy to be in line with the holistic approach?
2. How do you think you can help?

Eli Goldratt

P.S. No, I haven‘t forgotten the subject of moving the organization from bottom up. During this year I did do a lot of work on that subject and I‘m happy to say that there is good news. But, sorry, I first had to clean my head from that [... ] book so the bottom-up subject will have to wait for the next letter.