The Heavenly Paradigm was Time Lord technology, capable of changing the timelines so that the best possible outcomes were always achieved in every decision made. The device required a substantial amount of temporal energy to be activated, after which its own edits to the timeline would produce energy of its own, making the process self replicating.
The enormous energy requirements were the only thing stopping the Time Lords from activating it. If they could have got it working it was to be targeted at Skaro and rewrite the Dalek's timeline so that they would attain the best possible future for themselves. With no need of war or dominance the Kaleds would have prospered alongside the Thals, thereby never bringing about the conditions that caused the rise of Davros and the Daleks, the end result being that they would never have engaged the Time Lords in the Time War.
The Master, by way of engineering a multi-layered paradox around the death of Cole Jarnish, was able to generate the required temporal energy for the Paradigm to alter the timeline of the entire universe, instructing the machine to create "a better universe". While the Paradigm at first appeared to be working as intended, resurrecting entire races and worlds throughout the universe, the Master's request simply proved both far too vast and far too vague for the Paradigm to handle, and it quickly became unable to effectively calculate changes that would benefit the universe at large. Proving a double edged sword, the changes continued, writing entirely planets and races out of existence. Eventually the changes rippled into the Time War itself, altering both Time Lord and Dalek victories into defeats and vice versa, eventually resulting in a version of the war that was ultimately more favorable to the Daleks. The most significant alteration was turning the Battle of the Cruciform into being a Dalek victory, allowing the Dalek Emperor to take control of the Cruciform. Horrified by what he had set in motion, the Master fled the scene, and went into hiding. The Heavenly Paradigm at last overloaded, the resulting explosion destroying the Time Lord base it was housed in. (AUDIO: The Heavenly Paradigm)