OUR PRELIMINARY SPECIFICATION MAKES SHALE COMMERCIAL. THROUGH AN INNOVATIVE BUSINESS MODEL SUPPORTING THE JOINT OPERATING COMMITTEE, WE PROVIDE OIL AND GAS ASSETS WITH THE MOST PROFITABLE MEANS OF OIL AND GAS OPERATIONS, EVERYWHERE AND ALWAYS. ENABLING THEM TO ACHIEVE ACCOUNTABLE AND PROFITABLE NORTH AMERICAN ENERGY INDEPENDENCE.
OIL AND GAS’ VALUE PROPOSITION IS AT A MINIMUM, LEVERAGED TO THE POINT OF 10,000 MAN HOURS PER BOE. WE KNOW WE CAN, AND WE KNOW HOW TO MAKE MONEY IN THIS BUSINESS.
We want to continue discussing the output requirements of the Resource Marketplace Module from yesterday. We run the risk of getting too complex when we speak about the division or boundaries of the firm and markets but its an important definition that we get right in the People, Ideas & Objects applications. Simply we are attempting to provide as much actionable information between the producers and those in the service industries so that innovation in the field and at the producer levels can begin and develop. We need to ensure that the ideas that will drive the industry are developed as quickly as they can be.
The Resource Marketplace module offers more as well. In addition to the service industries that are sourced by the producer, human resources are handled by this module. Now this is more of the traditional Human Resources recruitment function of the firm where the recruiting and management of the firms personnel is done. Of course one other aspect would be that we would bring full payroll capabilities into the system.
What may be difficult to determine is the appropriate placing of the interfaces for deployment of the resources within the firm and various Joint Operating Committees. Ideally the Resource Marketplace module makes the most sense, however the community may think that these interfaces belong elsewhere. What I am referring to is the pooling of human resources that the partners within a Joint Operating Committee may do in order to adequately resource the property. (We will also discuss this in the Accounting Voucher module.)
For example, with the demands for more engineering and earth science effort for each barrel of oil produced. The ability for each producer to have in-house the global capability to deal with all aspects of their operation; will be a luxury that the market for human resources will not provide. Therefore, the capabilities to meet the needs of the properties operational demands will need to be met through the pooling of the Joint Operating Committee's partners human resources.
Recall in the Partnership Accounting Module that this pooling can take on any characteristic that the partner is able to contribute. If the partner is able to contribute only financially, then they are charged for everything, whereas, a partner that is able to contribute human or technical resources, these are costed to the Joint Account in consideration of their contribution.
The interfaces that we discussed will not only include the ability to source the resource through the Resource Marketplace Module. The ability to charge the costs of the resources through the Partnership Accounting Module. The ability to grant secure access through the Security & Access Control Module. Which will also of course include an appropriate designation in terms of the qualifications of the individual and determination of who they will be reporting to in the Military Command & Control Metaphor. But will also need to have the appropriate governance requirements interfaced in to the Compliance & Governance Module.
Here we begin to see the complexity that this system needs to address to deal with the needs of pooling the resources in the Joint Operating Committee. This is not a nice to have that might be used by some of the firms some of the time. This will be a necessity of the industry in order to deal with the complexity of the operations that the industry deals with today and in the future. It is fair to assume that with the current production profile and decline curves that the industry activity levels will need to accelerate. Although the systems complexity can seem daunting, a properly designed and engineered system, such as the opportunity as is presented here with People, Ideas & Objects, would make the industry operate in a fashion that would enable it to optimize its operations.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.
Former Shell Oil Company president has the following comments on Bloomberg today.
It's very important for BP to turn the page so to speak, although they still have the well to put out, and hopefully that will go according to plans over the next couple of weeks. But they have to turn their attention to the future. And part of that future in addition to the asset sales is getting on with what I call the boring bits of business, and that is, under John Browne they did a great job of expanding the portfolio and growing the company. But I don't think they ever integrated the company and turned it into a high performing institution, that takes a lot of time and Tony Hayward saw this and started the process but didn't get far enough. Now I think its time to really get into the structures, processes, systems the procedures so that the whole company operates the same way all over the world.
Makes at least two people that think the boring bits of business are needed.
If we were to have name tags on each of the birds in this picture. The mother bird of course would be the oil and gas industry. And the others would be PriceWaterhouse Coopers, IBM, Delloitte & Touche, EDS, Accenture, CapGemini etc. To sustain this type of "environment" would not be in the best interests of the innovative oil and gas producers. I see many of the types of services that are provided by these vendors to be in direct conflict with the members of the Community of Independent Service Providers. It is in our best interest to ensure that we don't replicate this relationship in the future. This post explains how the CISP will replace these service providers with value adding services to the innovative oil and gas producers.
Please note that I see the CISP providing much more then the services that are provided by just these firms. Recall some of the key areas where members of the CISP will be providing value include software definition and development with People, Ideas & Objects developers, software installation and integration using Oracle Application Integration Architecture, Accounting Service Provider, Representatives of user group, and conference planner to name just a few. To detail the list of services that are provided by the CISP runs the risk of limiting the imagination of what they can provide the innovative oil and gas producers.
What we are creating in the CISP is a market of self organizing individuals, groups and firms. Participation within the CISP is not limited to anyone, and is open to whomever wants to join. The only requirement is to follow this procedure. Once the license is signed and the summaries are posted, then the individual is free to develop their firm in the best interests of the People, Ideas & Objects software and the innovative oil and gas producer. This membership process would also be open to the named groups at the beginning of this post, if they desired to and believed they could make some money at it.
To eliminate the possibility that the CISP or market of self organizing individuals, groups or firms are precluded from the oil and gas firms business. (As reflected in the above picture.) People, Ideas & Objects needs to implement a policy change in the license that is granted to those licensees of the CISP . That change is to assess a royalty of 40% on any revenues in excess of $5 million to be payable to People, Ideas & Objects. Revenues that are subject to this royalty calculation are those that are derived from working with the People, Ideas & Objects developers and the associated CISP client producer firm.
We are doing this to provide any member of the CISP with an unconstrained $5 million revenue stream. Companies such as those named above, far exceed that threshold and therefore would find the royalty too onerous to be able to compete. This royalty is being implemented to ensure that the members of the CISP remain a market of self organizing individuals, groups or firms.
We have seen the level of innovation and ideas being generated from those named at the beginning of this post. Little if nothing has been generated in terms of implementing new and value adding ideas or technology to the oil and gas industry. Having a market of providers, that is unlimited in terms of who can participate, and financially penalizes the large firms is in the best interest of the innovative oil and gas producers.
Firms that are generating $5 to $10 million in gross revenues (net revenues of $5 to $8 million) will still be able to generate significant value for their owners. That assumes they are able to build value for their clients, the innovative oil and gas producers. Instead of focusing on quantity, they can focus on the quality of the services they provide and continue to accelerate the specialization of the services provided and the industry division of labor.
Our policies are designed to motivate the members of the CISP to enter and prosper in building value for the innovative oil and gas producer. To develop this resource it is necessary to ensure that these people are free to pursue their business without the risk that they will be eliminated from the market by those mechanisms that are in play in the picture that is reflected above.
Society is put in peril when world oil production declines. There is evidence that the worlds oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry are conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.
Chapter 2 of Professor Richard N. Langlois' book "The Dynamics of Industrial Capitalism" is entitled "The Obsolescence of the Entrepreneur" and deals with the Schumpterian Dichotomy. That dichotomy is the declining importance of the entrepreneur in the latter part of Schumpeter writings. This appears to be in contrast to his earlier writings in which he focused on the entrepreneur. What this post seeks to better define is Professor Langlois' vanishing hand hypothesis and its application to oil and gas. That is, the era of the large bureaucracy had its time and place. That era is now passing, to be replaced once again by the entrepreneur.
In the "early" Schumpeter -- Schumpeter I -- the innovation process might best be characterized as a linear one. Christopher Freeman (1982) describes it this way. Basic inventions are more or less exogenous to the economic system; their supply is perhaps influenced by market demand in some way, but their genesis lies outside the existing market structure. p. 21
Freeman notes that innovation is under the direction of no one group or individual. Adam Smith's invisible hand is present and the market provides. In this next quotation we see Chandler's visible hand.
“The main differences between Schumpeter II and Schumpeter I,” says Freeman, “are in the incorporation of endogenous scientific and technical activities conducted by large firms... p. 21
These quotations are noting the changes in the source of innovation. From the entrepreneur to the rise of the successful corporate Research & Development (R&D) arms of large firms such as Xerox PARC, Bell Labs and others. These firms R&D activities replaced the role of the entrepreneur during the middle of the last century. Langlois vanishing hand suggest that the role of the entrepreneur will rise again in prominence to the bureaucracy. Therefore it is reasonable to ask, what is the critical role of the entrepreneur?
Indeed, the job of the entrepreneur is precisely to introduce new knowledge. The “Circular Flow of Economic Life” is a state in which knowledge is not changing. Economic growth occurs at the hands of entrepreneurs, who bring into the system knowledge that is qualitatively new – knowledge not contained in the existing economic configuration. p. 27
Its more then just knowledge. Ideas have a critical role in economic growth. People, Ideas & Objects is derivative of Professor Paul Romer's "New Growth Theory" of People, Ideas and Things. The idea of using the Joint Operating Committee as the key organizational construct of the innovative oil and gas industry was in front of everyone in the industry. Why didn't this idea percolate to the top earlier?
There has to be a mechanism by which new knowledge enters the system. And that mechanism cannot be rational calculation, for as David Hume (1978, p. 164) long ago observed, “no kind of reasoning can give rise to a new idea.” p. 27
What has been done already has the sharp-edged reality of all things which we have seen and experienced; the new is only the figment of our imagination. Carrying out a new plan and acting according to a customary one are things as different as making a road and walking along it. p. 27
How different a thing this is becomes clearer if one bears in mind the impossibility of surveying exhaustively all the effects and counter-effects of the projected enterprise. Even as many of them as could in theory be ascertained if one had unlimited time and means must practically remain in the dark. As military action must be taken in a given strategic position even if all the data potentially procurable are not available, so also in economic life action must be taken without working out all the details of what must be done. Here the success of everything depends on intuition, the capacity of seeing things in a way which afterwards proves to be true, even though it cannot be established at the moment, and of grasping the essential fact, discarding the unessential, even though one can give no account of the principles by which this is done. Thorough preparatory work, and special knowledge, breadth of intellectual understanding, talent for logical analysis, may under certain circumstances be sources of failure. (Schumpeter, 1934, p. 85.) pp. 27 - 28
I read this as not being the role of one entrepreneur. I have identified that the Joint Operating Committee is the key organizational construct of an innovative oil and gas producer. I have taken that idea and formulated a vision, the Draft Specification, of how the idea of using the JOC could be incorporated in the day to day of the industry. From this point forward, it is the work of many entrepreneurs to develop the application and make the industry as innovative as possible. That is where the Industrial District (ID), Business Groups (BG), Small Knowledge Intensive Enterprises (SKIE) and Community of Independent Service Providers play a key and different role then what is done today. Langlois notes.
Entrepreneurship – introducing the qualitatively new – is an activity inherently different, it would seem, from the kind of rational calculation portrayed in the imagery of neoclassical modeling.
It is interesting that Schumpeter regards the entrepreneurial act as requiring in fact greater conscious rationality than routine activity (Schumpeter 1934, p. 85). This reemphasizes the empirical nature of his conception of economic knowledge. Routine behavior requires less conscious rationality because it is essentially “preprogrammed” through trial-and-error learning. Notice, of course, that, at least in “early” capitalism, the conscious rationality of the entrepreneur is not adequate to the task of innovation. This is why entrepreneurship requires intuition, the leap of logic. But – and here we get to the heart of the matter – conscious rationality, for Schumpeter, is in fact becoming increasingly adequate to the job of dealing with the radically new.
The more accurately, however, we learn to know the natural and social world, the more perfect our control of facts becomes; and the greater the extent, with time and progressive rationalisation, within which things can be simply calculated, and indeed quickly and reliably calculated, the more the significance of this [entrepreneurial] function decreases. Therefore the importance of the entrepreneurial type must diminish just as the importance of the military commander has already diminished. (Schumpeter, 1934, p. 85, emphasis added.)
Notice the syllogism. Because the unknown can be increasingly calculated rationally, the “extra-logical” function of the entrepreneur becomes increasingly unnecessary, and so the importance of the entrepreneurial type must diminish. p. 28
Placing the caveat "experienced entrepreneur" on the ID, BG, SKIE or CISP is a necessary. People who are able to see the forest for the trees in terms of what has to be done. As much as no one was in control of the innovation in the entrepreneurial era of Schumpeter's first writings, no one can influence the scope and scale of the project defined here. What we can do is share the understanding of how the industry operates, capture that in the software and apply it through the innovative tools that we develop.
We are at the beginning of this process. The bureaucracy remains in complete control. However we find encouragement in the ongoing activities in the industry. In these next three quotations Langlois provides us with an understanding of where we are in the process and how the transition will come about.
"Defenseless fortresses invite aggression, especially if there is rich booty in them. Aggressors will work themselves up into a state of rationalizing hostility -- aggressors always do. No doubt it is possible, for a time, to buy them off. But this last resource [sic] fails as soon as they discover that they can have it all" (Schumpeter 1950 [1976, p. 143]). p. 30
and
“Thus the modern corporation, although the product of the capitalist process, socializes the bourgeois mind; it relentlessly narrows the scope of capitalist motivations; not only that, it will eventually kill its roots” (Schumpeter 1950 [1976, p. 156]). Like Marx, then, he sees capitalism as leading to its own destruction. But unlike Marx, Schumpeter sees capitalism as the victim of its own economic success not its economic failure. This tale stands Marx on his head, its plot laced with a heavy and self satisfied irony. The tone is disinterested and the attitude fatalistic; but the message is largely cautionary. At base, Schumpeter is nothing so much as a neoconservative, perhaps the first neoconservative. p. 30
Lastly a word of caution to put these points in context.
In the end, however, taking all this too seriously puts us in danger of reading Schumpeter literal-mindedly. The force of the argument is in the texture of the landscape -- not in its details. Indeed, there is a sense in which the “Schumpeterian tension” -- the tension between the Schumpeter who comes to praise entrepreneurship and the Schumpeter who comes to bury it -- actually enriches the majestic irony of Capitalism, Socialism, and Democracy. p. 31
Our appeal should be based on these eight "Focused on" priorities and values of how better the oil and gas industry and its operations could be handled. They may not initially be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are. If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.
I have had the opportunity to review this jewel of a video "Markets, Firms & Property Rights" by Professor Ronald Coase. Scratch the surface of any of the research that we review on this blog, and Coase's 1937 book "Nature of the Firm" will be there. He makes an interesting comment that I had not heard before. "Markets are creations" and that is what we are doing in the Draft Specification with the Petroleum Lease Marketplace, Resource Marketplace and Financial Marketplace Modules; creating markets.
Overall much of our research review has been on Transaction Cost Economics. Through building the Draft Specification we are able to automate many transactions, but also deal in the value generating activity of designing transactions. In a 1997 Reason Magazine interview Coase made the following comment.
Reason: People are very excited that transactions are taking place much more efficiently than ever before through new electronic means and better communication systems. Are you excited about these trends?
Coase: Yes, because I don't understand them. People talk about increases in improvements in technology, but just as important are improvements in the way in which people make contracts and deals. If you can lower the costs there, you can have more specialization and greater production. So that's what I'm interested in now. By improving the way the market works, you can produce immense benefits, not because it invents new technologies, but because it enables new technologies to be used. Without the ability to make efficient contracts, you can't use these new means. And a lot of effort is going, at the moment, into devising new ways of handling the problems, mainly by the lawyers.
We stand on the shoulders of giants. In Coase's case he won the 1991 Nobel Prize in Economics and celebrates his 100th birthday this year.
A recent post suggested that there was a hesitancy in detailing too much about the user interface to be used in the People, Ideas & Objects application modules. Firstly, this design process that we are undertaking in the Preliminary Specification is about the oil and gas business, not about the new(er) technologies that have been developed. And this post is not so much about the technologies but how the user will interact with the modules being developed here. The interface, as Apple & Google have shown us time and again, is the critical piece in how people use their technologies. [Please stay with me for the full post as this requires some reader faith.]
Back in the dot com bubble much was made of the "Exchanges" that were being built. The market cap for these companies were in the billions and they would prosper through building the technology to facilitate exchanges of documents etc. Thankfully that era ended and we never saw these technologies get picked up. However, today the concept of exchanges is developing again. And they will fail. That is why they do not appear anywhere in the Draft Specification. What does appear are Marketplaces. Places where the people and technology live together in perfect harmony. Creative license is a treasure.
The hesitancy in posting about this is due to the fact that I see the People, Ideas & Objects user interface being exactly like the World ofWarcraft (WoW) user interface. Now that the non-believers have left we can speak to the advantages of this. If you've never seen WoW ask a teenager, actually any teenager, to look at their version of the game. It's brilliant. Note how the environmental variables, and pretty much anything can be accessed through small groupings of control panels. Each provides the user with the control needed to operate the game.
and
Just search YouTube for World of Warcraft and you'll be able to see the analogy I am trying to make here. Professor Wanda Orlikowski defines a term in her paper "Synthetic Worlds". In the Draft Specification there are at least four "Synthetic Worlds" that I want to quickly mention.
Any and all Joint Operating Committees oil and gas assets.
Each of these are Synthetic Worlds populated with the User defined environment. Each facility or oil and gas property is populated with a virtual representation. If a rig was drilling a new well, then the Synthetic World would emulate the actual activities on the rig. [Look to the Technical Vision of this project to understand how that happens.] Importantly, the interactions between people and their avatars, and other avatars, are supported by the design elements that can negotiate a contract, and design a transaction to have a fracing company come in and double the number of horizontal fracs based on what was discovered down hole.
The Petroleum Lease Marketplace might appear like an old "exchange" [bad word] where people are buying and selling. But in this instance it's oil and gas leases. And maybe their not buying or selling but pooling their interests with their neighbors to ensure they get approved for the gas plant they want to build. A producer may be selling off it's none core assets. A young engineer is looking for support to fund his dream of turning the Basal Quartz into the most prolific zone ever. These, all being in real time with people in the marketplace.
The Financial Marketplace module will handle the financial resources of the producers. If you don't like the billing you received from the previously mentionedfracing company, engage them in a virtual private meeting regarding resolution. Interestingly so, since were emulating real life virtually, we are also recording it, making it easy for the producer to show why thefracing costs are incorrectly billed.
The Resource Marketplace module where an oil and gas producer can find any type of service operation from the Community of Independent Service Providers, the service sector vendors like the fracing company mentioned, the employees the firms want to hire. All provided in a Synthetic World.
Now that I have provided full and complete certainty to my detractors, is this possible? Here we have Dr. Eric Schmidt who was the president of Sun Microsystems at one time, also CEO ofNovell at one time and has been the CEO of Google for the past 10 years has to say about Synthetic Worlds.
Everything in the future online is going to look like a multi-player game,” said Schmidt to this international audience. “If I were 15 years old, that’s what I would be doing right now.
In answer to those questions is it possible? Please refer back to the videos earlier. That rich of an environment has been in the game players world for the past number of years. Critically here is where Professor WandaOrlikowski pick up her research. Note that her discussion is based on the Sun Microsystems "Java" (imagine that) environment known as Project Wonderland. An "Open Source" (imagine that) development framework for business' to implement these technologies. Please see the Sun research documents here, here and here. And watch this video of Project Wonderland.
Before we get to Professor Orlikowski research I want to put one more critical aspect of the Draft Specification into play. The Military Command & Control Metaphor is a critical aspect of the Compliance & Governance Module and how things can work in the appropriate business sense. To suggest that anyone and everyone have access to a game players type of situation is ridiculous. The need to implement a key part of the organizations compliance and governance needs to be available. When we add that the JOC is representative of many producers we add an element that makes this scenario of a Synthetic World impossible. Add the layering of the Security & Access Control Module and the Military Command & Control Module in the Draft Specification, the problem is solved. The only requirement that I think we need to add is a means to visually identify the appropriate role and rank of each individual in the Synthetic World. [I'm thinking Star Trek Shirts with different colors and badges, oops there's my detractors again.] So that the representative from the fracing company can see that the avatar of the individual he is negotiating the contract with does have the authority to execute on behalf of the producer and the JOC.
One more paragraph and were at Professor Orlikowski's research. John Hagel posted an entry on how relationships and dynamics in the work place. His comments add another perspective to the discussion.
Drawing on a specific scenario from a contemporary workplace, I review some of the dominant ways that management scholars have addressed technology over the past five decades. I will demonstrate that while materiality is an integral aspect of organizational actively, it has either been ignored by management research or investigated through an ontology of separateness that cannot account for the multiple and dynamic ways in which the social and the material areconstitutively entangled in everyday life. I will end by pointing to some possible alternative perspectives that may have the potential to help management scholars take seriously the distributed and complexsociomaterial configurations that form and perform contemporary organizations.
Commenting on the scenario that is best represented in the last YouTube video above, Orlikowski states:
A normal day at the office for a software development team? Not quite. I have omitted an important detail. The Project Wonderland rooms, offices screens, and documents are part of an online, three-dimensional,immersive environment for workplace collaboration within Sun Microsystems, known as MPK 20. Within this graphically intensive virtual workplace, users interact in real time using audio, text and images, and they share applications and content from a variety of online sources.
In answer to the many of Professor Orlikowski's questions; people use marketplaces for everything. The marketplace is the boiling pot of research into the capitalist system. A system of organization and activity that everyone subscribes to.
The use of synthetic worlds for organizational activities such as distributed collaboration raises interesting questions for scholars -- how to make sense of a study of these in management research? What are some existing perspectives that might usefully be drawn on to do so? What new or alternative perspectives might be more relevant? What are the implications of choosing certain perspectives over others in accounting for and articulating particular issues and insights?
2. Established perspectives on technology in management research
Professor Anthony Giddens Structuration Theory was used in the preliminary research report. His theory identifies that People, Organizations and Society move in lock step with one another. If there is a difference in the pace of change of these three elements, a failure occurs. As I indicated in a recent post, ProfessorOrlikowski "Structurational Model of Technology" was used in the Preliminary Research Report to determine that society and technology are linked by "the duality of technology" and the "interpretive flexibility of technology". Please see the Preliminary Research Report for further application to the energy industry. The majority of Professor Orlikowski's work has been in these areas.
Three distinctive conceptual positions on technology are clearly evident in the management literature of the past few decades. In the first perspective, which I will characterize as absent presence, technology is essentially unacknowledged by organizational researchers and thus unaccounted for in their studies. In the second perspective, technology is posited to be an exogenous force -- a powerful driver of history having determinate impacts on organizational life. The third perspective, that of emergent process, technology is positioned as a product of ongoing human interpretations and interactions, and thus as contextually and historically contingent.
The value she has created with her ideas is in this fourth perspective of technology. What she in essence says is that dealing with organizations and technologies as separates, management research has to deal with them as one. This is the area of research that the Preliminary Research Report was able to determine that to change organizations, the technology or ERP system should be designed and built to identify and support the Joint Operating Committee. It is also the area where the management of the oil and gas companies, my detractors if you will, have used these ideas against themselves. Suggesting that they would not be challenged in their positions if the technology never changed. These ideas and their implication provide the support I need to appeal to the shareholders and investors in oil and gas to take thisperversion of Professor Orlikowski's work away from the management and eliminate them.
Recently, a fourth perspective of technology -- that of entanglement in practice -- has attracted interest within management research, largely influenced by longer-standing development in sociology and science and technology studies (Barad, 2003; Latour, 2005; Suchman, 2007). As I will describe below, this alternative perspective entails a commitment to a relational ontology that undercuts the dualism that has characterized but also limited much of the prior technology research in management studies. In particular, this perspective offers the potential to radically re-conceptualize our notions of technology and reconfigure our understandings of contemporary organizational life.
I believe it is very clear that the threat to management by technology has been significant and it is human nature for them to resist. I think the Project Wonderland, People, Ideas & Objects marketplace models and the many other supporting conditions prove that the technology will eliminate management. And it is the responsibility of people and society to ensure that organizations change to ensure they do not continue to hold everything back.
5. Conclusion
Professor Orlikowski sees the aberrant way in which management have approached technology. In her conclusion she intimates that management will continue to forestall the adoption of further research.
Confronted with synthetic worlds, these researchers will in all probability focus their attention elsewhere. And this choice has consequences for the value of organizational scholarship: "to the extent that the management literature continues to overlook the ways in which organizing is critically bound up with material forms and spaces, our understanding of organizational life will remain limited at best, and misleading at worst' (Orlikowski and Scott, 2008, p. 466).
Orlikowski shows us the way's and means to implement these technologies.
They will conclude, as I do here, by suggesting that the perspective of entanglement may be particularly useful for management research going forward. As contemporary forms of technology and organizing are increasingly understood to be multiple, fluid, temporary, interconnected and dispersed (Ciborra, 1996; Stark, 1999; Child and McGrath, 2001; Law and Urry, 2004), a perspective that renounces the categorical presumption of separateness is likely to offer a more useful conceptual lens with which to think about the temporally emergentsociomaterial realities that form and perform contemporary organizations.
Multiple, fluid, temporary, interconnected and dispersed. I wonder if this type of environment would make the average oil and gas worker more productive? I wonder if the producer would be more profitable here vs. say SAP or through Oracle Fusion? This is how I see the oil and gas industry being able to raise it's productivity to the level necessary to fuel the worlds demand for energy. If you are a producer that sees this as a reasonable way in which to proceed, then please support these software developments and the Community of Independent Service Providershere. And if you're a user that sees the benefits of logging into this environment as opposed to spending the two and a half hour ritual needed to get to work. Please, sell short the commercial real estate stocks you own and join us here.
The Oil & Gas Journal is covering The Society of Exploration Geophysicists (SEG) annual meeting in Houston. The topic of discussion is the exact issue that this software development project is designed to solve. The key issue which I wrote about in the Preliminary Research Report in May 2004. From the Journal's opening paragraph.
Energy research and development challenges are becoming more complex, demand integrated and individual approaches, and are in need of wider funding sources, concluded a forum at the Society of Exploration Geophysicists annual meeting in Houston.
When I read these types of articles I get frustrated and angry. Frustrated and angry at the do-nothing bureaucrats who currently occupy space at the oil and gas companies. The last six years has seen my efforts to promote this software development project, community and associated research, with absolutely no support, and not one penny from the oil and gas companies. The Journal's discussion goes on to quantify the amount of effort that needs to be undertaken.
John McDonald, Chevron vice-president and chief technology officer, reminded SEG delegates that the world took 125 years to consume the first trillion barrels of oil and is using the second trillion in 25 years. It is estimated that another trillion barrels remain to be discovered, ostensibly at a cost of $20 trillion over the next two decades.
This current bunch of bureaucrats suggest and expect we just hand $20 trillion over to further line their pockets? Where is the outrage? How is it that I was able to write the Preliminary Research Report in May of 2004? Was I the only individual in the oil and gas industry to realize this? Of course not, what was known in May 2004 was that this was a trend that was developing in the industry. And as I state in that report, the industry needs to move away from the banking mentality of guaranteed returns on their oil and gas investments. And begin developing the necessary resources and organizational structures necessary to support an innovative and performance based organization to address the underlying sciences.
So what are you going to do, Mr. budget director? Will you now undertake to do a study of the issue? Spend time and money marshaling resources towards coming up with a new vision of how the industry will solve these difficult issues. Gain a consensus amongst budget directors on what that vision should be. Hire SAP or Oracle to build you a system that gets you closer to your customer? You should be finished well after 2029 and therefore, your retirement will be fully secured.
You had your chance in May 2004, and instead did nothing. Now the consequences of your inaction will be the result of you being removed from the industry. Besides I think your going to be busy explaining what the hell it is that you have been doing all this time.
Bringing six years of research and a governing vision to the industry today has to be worth something. The community is ready and willing to move, the financial resources are all that is needed to be dedicated to this software development and community. Interested shareholders and investors should email me here with commitments to move forward. And please join me here.
Passion is something that is being discussed more and more in the business community these days. It's something that I feel fortunate to have discovered and have been able to focus my energies on this software development project. There is a comfort and peace afforded to those who find their passions, it is in many ways the reward for taking the risks and enduring the sacrifice. In terms of the discussion, passion is a difficult topic to define and describe what it is, and why it affects people in the way that it does. John Hagel has taken the time to define it from the point of view of a business necessity. I would highly recommend reading his document, I think he does the best job of it yet.
Hagel makes the point that with the economic conditions we find in the twenty first century, passion will be a necessity. As he states.
If we have not found a way to make our passion our profession or to discover passion in our profession, we will very quickly succumb to the growing economic and competitive pressures that are shaping our global business landscape. The pressures will inexorably mount. Without passion, we will increasingly experience stress, our energy will be steadily drained and we will ultimately burn out under the mounting pressure. At best, we will be marginalized as we find ways to achieve “balance” and safety valves for the mounting pressure at work.
The definition of passion is broken into two distinct types. Hagel says there are "true believers" and "explorers." The true believer is described as "Their passion is enduring and it does focus, but it can also blind – leading the entrepreneur to reject critical input that does not match their preconceived views." Not a productive environment in my opinion. Collaboration is a major means of how ideas are developed today. To ignore the ideas of those that are involved is somewhat disrespectful. I'd like to think that this project would be defined as an "explorer" which Hagel describes as.
These are people who see a domain, but not the path. The fact that the paths are not clearly defined is what excites them and motivates them to move into the domain. It also makes them alert to a variety of inputs that can help them to better understand the domain and discover more promising paths through the unexplored terrain. They are constantly balancing the need to move forward with the need to be present in the moment and reflect on the experiences and inputs they are encountering.
I have prepared the supporting research that proves the Joint Operating Committee provides the innovative and organizational performance that the oil and gas producer must have. From this research I have been able to sketch out a vision of how a system based on the JOC would operate. The Draft Specification is the beginning of the involvement of the Community of Independent Service Providers. This is where the passions of many people will take the Draft Specification and build the software applications they will need in their day to day work in the oil and gas industry. Hagel notes;
Passion is also about pursuit. It is not passive. People with passion are driven to pursue and create. They may read books and observe others, but they are not content being bystanders. They feel an overwhelming urge to engage, to experience for themselves and to test their own capabilities. Passion compels us to act.
The heading of this blog calls to those with passion to act.
A global community of professionals dedicated to optimizing the performance and profitability of innovative oil and gas producers. We are focused on developing IT systems based on the Joint Operating Committee. The legal, financial, operational decision making, cultural and communication frameworks of all producers.
A community of people open to new ideas, who know that energy is the life blood of our global economy. People of action who demand more from IT, please join us.
I hope that I have designed a path for others with passion to follow. The comprehensive nature of John Hagel's article is best read in it's entirety, and please review his passion manifesto. The one comment that I would leave you with, if you are in oil and gas, is People, Ideas & Objects is the place where you can find your passion and act to make a difference in the industry. Please join me here.
A lot of change is considered in the Draft Specification. Much of it difficult to assume is correct. What has been researched, and is represented in this blogs 700,000+ words, hangs together in its entirety. In other words it works on paper.
It can be frightening to view the Draft Specification and its impact in oil and gas. I know that people are ready and willing to change. The demand for change being driven by the difficulties in the economy. The escalating oil and gas prices and the financial crisis provides the realization that the old ways need to be looked at. People are looking at this point in time; from the point of view that the old ways are not providing the value we need.
How the future unfolds will not be by happen stance, in my opinion. In other industries some products are assembled in many different countries. They have components and parts that contact dozens of different countries. Organization is more by design then by chance. If, as I believe is happening, the large bureaucracies are unable to continue building value, their difficulties and decline will soon become obvious. That being so, what replaces the ways and means of the oil and gas industry from an organizational point of view.
The point I'm trying to make is that the ways and means of the oil and gas industry will not happen on their own. We need to take what proven ideas we have and start building them to ensure the transition from the old ways, the bureaucracies, is not interrupted to the new, the Draft Specification.
Looking at this problem another way, Exxon Mobil employs hundreds of thousands of people around the world. What do these people do, where do they do it and how do they do their jobs? In many ways we have lost the ability to know what our organizations do. And, if they are failing what does that mean. Can the world afford a decline in energy output? Or do we have an obligation to do something to ensure that there is a transition.
If the bureaucracies have taken the division of labor and specialization to the point where Exxon Mobil employs hundreds of thousands. What will the future need in terms of the division of labor of future organizations. To grow 90 million barrels of oil per day requires innovative, faster organizations. We think we know we can't get their with our current organizations, but we can certainly go backwards into what I will leave to your own imaginations. The choices we make today are therefore critical in making our future.
How this is done is through the people that are a critical part of this industry. Their ideas to make it better and the objects that make up the People, Ideas & Objects software. Please join me here.
I want to stress or highlight a key point of the Draft Specifications assumption about the producers competitive advantage. The physical assets, reserves, leases and the capabilities in exploiting those assets are the sustainable competitive advantage that producers are interested in. A producer organization focused on building value, using the Joint Operating Committee (JOC) as the key organizational construct, can employ the right strategy for that JOC. There is no need to have a corporate strategic compromise now practiced in most firms. The strategies of the various producers within the JOC do not have to be, and probably never will be the same. Many producers have different asset mixes, costs and dynamics within each JOC. They are each free to pursue their strategy without creating conflict within the JOC.
In addition the energy producers need not own can not own the intellectual property of how the industry conducts its operations. The service industry is best able to work with the producers to innovate and develop the tools and methods necessary to optimize the discovery and production of oil and gas. Does it provide Duverney or BlackPearl with any value to have developed and patented the most innovative drill bits? Of course not, if they had developed their own drill bits they would probably be in bankruptcy instead of sold for many billions of dollars.
Is the CFO of a producer firm going to come up with the next great innovation in drilling technology. How about the CEO, will he finally prove his theory about the physics of oil and gas accumulation? No. If they were they're not doing their jobs. And as Duverney and BlackPearl have shown. Their job is in applying their understanding of the science to the assets they own, and building their production and reserves.
Who is going to "break their pick" on the next drilling technology. Who is going to discover the next organizational structure that supports the innovative producer. These innovations can only be discovered and built based on the scale that has the entire energy industry benefiting from them. To have them within one producer does not provide the motivation for the individuals to break their pick doing so. This is why the Draft Specification has developed the Research & Capabilities Module and the Knowledge & Learning Modules.
I see Canadian producers involving themselves in the business of their suppliers and service operations. When Encana purchases its own rigs when there is a rig shortage, that only stops anyone taking the risk of building new rigs. The message is the oil and gas company will involve itself in direct management when the service industry is unable to provide the needed services. This too is a direct symptom of the attitude that the Intellectual Property of the oil and gas industry is not developed or owned by any group or individual. This is the wrong type of thinking and it needs to stop. Please join me here.
Tonight I am in possession of an interesting paper that I'll evaluate in a future post. I felt it best that I point out this new paper so that others could get an early view of it as well. John Seely Brown and John Hagel are two authors that I covered in the Preliminary Research Report. There work is in the area of Web Services and its impact on business.
The topic of the paper is the development of an index called the "Shift Index". I'll leave you with a quotation from Professor Scott Page who wrote the Forward.
The Shift Index can be thought of as a new economy analog of the Composite Index of Leading Indicators, an old economy index that considers hours worked, unemployment applications, orders for capital goods, new building permits and the like. The Composite Index has its place, but its indicators don’t respond until months if not years into a shift. Walk through an innovation sequence: Bandwidth increases creating space for new social media. Entrepreneurs formulate ideas. Venture capitalists finance projects. Proposals prove viable. Finally, mezzanine funding spurs a ramp up in employment. Only then, in this last stage, does the Composite Index identify the shift. Using the Composite Index to track shifts is like driving a car by staring into the rear-view mirror. In contrast, the Shift Index lets us look out the front windshield.
As important as the index may prove for strategic applications, it may have more impact in how it changes our conception of the economy. Interpreted through the lens of neoclassical economics, the Shift Index captures shifts in fundamentals, particularly on the cost side where technological changes allow firms to do more with less. But, the Shift Index, by name alone, calls into question the neoclassical mindset that focuses on re-equilibration.
I have highlighted the writings of Bruce Nussbaum of BusinessWeek magazine on this blog before. Among other things he writes the NussbaumOnDesign weblog, (subscribe to the RSS feed). My previous posts of his are here and here. Since his writing, the topics he covers (Design and Innovation), and the ideas that he raises are valid to this community, I am setting up a label (to aggregate his posts within the Innovation in Oil and Gas weblog) and Technorati tag / URI for Nussbaum (to aggregate posts within all blogs that have been tagged Nussbaum.)
He is in Davos, Switzerland for the annual World Economic Forum. In a series of articles he is metaphorically letting the rubber hit the road. Arguing that the people that are discussing the economic consequences of the current economy are the ones that brought the problems to us, and are not necessarily the people who will be getting us out of this economic mess anytime soon. I highly recommend reading his post here.
A “transformational crisis” is the term used in the opening session of the World Economic Forum by founder Klaus Schwab to describe the state of the global economy today. Institutions are not working, unemployment is soaring and we have to first manage the crisis, then manage a new world post-crisis. (Italics are my emphasis.)
The real critical aspect of his posting is that he suggests the people who are the ones that will be making the transition are not necessarily in attendance, or are relegated to the sidelines at Davos. Nonetheless there are a number of very valid quotations that I would like to highlight.
Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation, USA, and Co-Chair of the Annual Meeting 2009. “Don’t let’s lose sight of what creates wealth; it’s open markets, capitalism and we’ve proved this again and again in last century,” he cautioned.
Werner Wenning, Chairman of the Board of Management, Bayer, Germany, and Co-Chair of the Annual Meeting 2009. “We’re talking about growing populations; we have to address issues of how to secure energy supply and of climate change; we’re also talking a lot about sustainability and returning to the basics of sustainable behaviour.”
Bingo, we are being challenged by so much more then just an economic mess. This is why this community that we are building for the oil and gas industry is so critical. Without the necessary systems being built for the future organization, we will not get anywhere close to this future. Software systems are the glue that make organizations work. Using the Joint Operating Committee in the oil and gas industry is the critical organizational construct of the innovative producer. It is the legal, financial, operational decision making, cultural and communication frameworks of the industry. SAP and Oracle, who define and support the bureaucracy, are able to provide compliance and governance for the SEC, Tax, and Royalty regimes. They DO NOT recognize this critical organization, the JOC, in their software.
Nussbaum in a second posting for today, writes the following highlights from what he has entitled "Fear in Davos"
It’s midnight and I’ve talked with maybe 20 really smart people so far at Davos (yep, very dense population of very smart people at the World Economic Forum) and the consensus is that a deep fear is running through the conference this year. Things could be much worse, is the message.
And,
One senior public European figure told me “First we had the financial crisis. We still have that plus an economic crisis. Now we’re getting both plus a political crisis. This is getting ugly.”
We can chase new ideas around the table for a number of years. We no longer have that time or luxury. Understanding that using the JOC is the real key to innovation in the industry is something that I have been doing for the last 5 years. The idea of using the JOC has been thought through to the point where a total overall vision (the Draft Specification) is ready to be implemented. It details what using the JOC could provide if we built this software. Wasting time thinking of new ways to organize is unnecessary.
Critical to this possibility is the ability of a community to take the Draft Specification and produce a Preliminary Specification. But this community, which is very large and understands what I have been writing about, is ready to move. The oil and gas people in Davos are not the ones that are going to see these changes implemented. It is you the reader of this web log, and the concerned member of the oil and gas industry that belongs in this community, please join me here.
This article discusses the distribution of an industry dynamics. An interesting topic that I have not studied too much of in the past. I think, as the author of the article asks, there are implications here that may need to be discovered.
In the Preliminary Research Report I discussed the performance of then laggards against those of higher performance oil and gas companies. I used Revenue Per Employee as the manner in which to determine these firms performance. I then discussed the ability of laggards to catch up to higher performing firms; and noted the ability to do so was almost impossible due to a the following two factors.
Influence of the firms asset performance based on its historical cost, infrastructure and industry distribution. Noting that putting lipstick on a pig makes no difference to the pig.
Secondly the ability to catch the leaders is difficult. Today I would suggest that the Chinese have a long and very hard climb to match the growth and performance of the U.S. economy. And that is the same type of difficulty that firms face in each industry.
It is possibly ironic that the high performing firm that I used in the Preliminary Research Reports analysis was none other then our stellar pig, Canadian Natural Resources Ltd. How times have changed. And it is in that example I think I have found that the dynamic of change is not so much in the hands of those that want to challenge the established leadership, but in the hands of the leadership to make the big mistakes. CNRL has proven they have the capacity to ruin what was considered a leader in the Canadian oil and gas industry.
The McKinsey author closes the discussion with the following quotation.
Unlike the laws of physics, power curves aren’t immutable. But their ubiquity and consistency suggest that companies are generally competing not only against one another but also against an industry structure that becomes progressively more unequal. For most companies, this possibility makes power curves an important piece of the strategic context. Senior executives must understand them and respect their implications.
Clarifying the nature of how industries change. And this is where I see this situation becoming doubly dangerous for those that are active in any industry. Your ability to compete has little to do with the competition. Focusing on the competition will provide you with products that look and perform very similar to what GM produces. The need to pursue your own strategy of how you will optimize the performance of your assets should be in the forefront of your companies focus. The risks are associated with the mitigation of tangible and intangible threats to your firm, and the upside is through optimization of your opportunities. But is this optimization and mitigation able to provide the firm with any ability to sustain a higher performance "Power Curve"? This question also takes on needed and important discussion about the role of re-organizing the oil and gas producer on the basis of the Joint Operating Committee (JOC).
The first implication that I see in applying Power Curves is that doing nothing becomes one of the most difficult and dangerous strategies. We have all used the do nothing alternative in most of our decision matrices and that is not what I am talking about here. But doing nothing from the point of view of not taking the enhanced risk in this high paced change business environment.
It may have been prudent to sit back and wait until the competition in your industry to explode and you reap all the rewards. However, that is not what I am thinking of in this discussion. What I am thinking is the pace of change will render a status-quo strategy to the dust bin in the quickest time frame. A company must be actively attempting to move up the Power Curve in order to ensure they are progressing.
If we think about the times that we live in today. It is easy to see that we are heading into a time period where man will progress the furthest and fastest. In the next 50 years, biology, physics, chemistry, bio-chemistry, molecular biology, economics, robots, computer performance, software capability will fundamentally change society. Not one of these scientific categories is outside the realm of the innovative oil and gas producer.
How can a firm sit and watch what is historic in terms of discovery, almost every day. Clearly the ones that will win in the future will be those that are able to match the demanding changes that society will dictate. Look closely at the environmental movement and I think we begin to see the societal demands of our organizations accelerating. Can China continue to asphyxiate their population in the long term? Of course not, but they appear to do very little about the problem. Therefore how long will China be able to compete?
I take great pleasure in highlighting the failures of the companies highlighted in the piggy series of blog entries. Considering the scope of the discussion in this entry so far, it is easy to see how the greed and satisfaction of oneself has become the prime focus of companies today. Is this sustainable? I'm not sure, either way. Should we wait and see if today is the time in which we should have acted? Of course not. You don't wait until you can determine if someone is going to get themselves out of a burning building. You do everything possible to get them out. And like Treasury Secretary Paulson's failed TARP program, without trying, you'll never know if it worked or not. This is a key discovery, just as if the TARP program would have worked beyond everyone's expectations.
These are the dynamics that we face in the business world today. I suggest we critically analyze the performance of the oil and gas industry based on these metrics. I fail to see how the structured hierarchy and their bureaucratically identifying and supporting relatives, SAP and Oracle, can be expected to exist in this future environment. Please join me here.
In most business' the amount that management sell their products at is higher then its costs. In oil and gas we would only dream of such a concept as price management. In the Draft Specification I have included a price management capability on a fully automated basis.
The problem comes down to the designation of one producer as the operator. The operator has every motivation to keep the wells and fields producing to their fullest extent at all times. This is as a result of beliefs of competitive drainage, and the bank expecting their investment to perform. The fact of the matter is that the operator does not have the authority to shut in any production without the consent of the partners.
Recall that today, the Joint Operating Committee (JOC) meets on a relatively infrequent time frame and the majority of the reporting is standard fare statements and data. Any production volume reduction is not possible without the consent of the producers who hold x% as determined in the Operating Procedure.
Fast forward now to the day in which the People, Ideas & Objects system has been built and is commercially available. It is fair to assume that the volatility in the commodity prices remain and the variance in price is in the realm of + / - 20%, and somewhat determined by political factors and seasonality. This would make the majority of the production either very profitable, marginal or create a loss situation.
With the People, Ideas & Objects system we will have the ability to calculate the costs on a "live basis" based on the contributions of the partners involved in the JOC. This is the key change factor that enables the producers to use an algorithm to move production up or down based on the commodity prices and the actual costs of the operation. If at any time the required percentage of voting partners determine that the costs exceed the price received, production would be scaled back to 50% of the flow rate. If the loss exceeds 10% then another 50% of production would be reduced to the point where the production could be scaled back to the level that the partnership are satisfied the optimal reserves production and prices are optimized.
These operations are dependent on one factor, the collective decision of the producers representing the JOC. This is the type of capability that would be made available in People, Ideas & Objects. The standard bureaucracy can not make the decisions in fast enough time frames to make the decision valid. By the time the decision would be made, the prices may have risen dramatically just at the time the wells were being choked back.
After the decision from the JOC has been made. And this decision is based on the producers vote and desire to optimize the value of the reserves. This decision is therefore somewhat automatic in that each producer will be able to input their specific criteria that they would expect the changes in production to occur. The commodity prices fall below what the calculated actual costs are and if the production became marginal, the wells production would be reduced to the 50% I am using in this example. The prices subsequently, because their is a lack of production available for the consumer, increase and then the well can increase its production on any increment the JOC may have deemed appropriate for the reserves and their cost factors.
The ability to calculate the costs, determine the market prices, and the ability to slow the rate of production through telemetry. Are the technologies that are being implemented in this application. Please review the Technical Vision and specifically the IPv6 component. Other times during further price changes, the system would provide the opportunity to increase production for higher prices as well.
The interface to this capability would be the browser of those that are present virtually in the JOC. And I have suggested that these people are the actual oil and gas producer / investor / owners of the property. Imputing a reduction in the separation between management and investors is something that can be, and probably will occur in this current financial market meltdown.
Now I know that their are contractual commitments made to the firms that gather, deliver and market the commodities. The nomination process is how they monitor their business and these people will need to be involved in the decisions that are made at the JOC. That they have the right to demand gas production meet certain annual volumes could be accommodated by recognizing this price management capability and implementing it into their operation as well. I don't foresee an issue here, if there is it may be a simple matter that the producer declares Force majeure to reflect the operation is no longer commercial at current prices.
Irrespective of the ability to have these types of operations conducted I know two things. The bureaucracies are too slow to accommodate any price induced change in production. And the industry has to take responsibility for the prices that they need to realize. As we move the industry from a price taker to a price maker, the optimal use of the reserves and our endowment of oil and gas will be optimized, not only for the producer but also the energy consumer. This is achieved through the generally higher prices that will be realized, and hence the more financial resources that will be available for exploration and bringing on the more difficult production.
We are in interesting times. That is what makes this project and the possibilities of what this community could do, so breath taking. I recently wrote why I felt the governments should be stepping up and funding some of the software development projects that will enable the global economy to perform at the level of expectation of our collective society.
Well it appears that I am not alone in that thought. IBM CEO Sam Palmisano delivered a speech to the Council of Foreign Relations yesterday. Essentially he has said the same things that I have noted in this blog. Also citing the work of President Eisenhower in building the U.S. Interstate. The New York Times article and the text of the speech should be read by everyone.
We have a job to do. And this will not be done without the efforts of those that belong to this community. From the point of view of an obscure idea on how to manage oil and gas assets more innovatively, this is a healthy sized community. One that is familiar with the ideas and concepts as they have been put forward in this blog. Now is the time to aggressively increase our communities size. Please join me here, and if you know of some other people who could help out, please send them the URL to this blog and encourage them to consider a role here as well.
Oracle and SAP have their systems installed in many of the top oil and gas producers. Encana for example uses a variety of Oracle products, which I believe include J.D. Edwards and PeopleSoft. Makes you wonder why are they're hiring developers to build their OilCo and GasCo consolidation software?
One of the critical competitive advantages that we currently have in People, Ideas & Objects is that we are not constrained by the existence of operational software code, and customers operating from that code base. Moving in the direction that the users want and need have no consequences in terms of time, money or effort. Change is dynamic at the beginning of the project and therefore, it is important to consider as much as possible for inclusion into the preliminary through to final specifications.
SAP and Oracle have to look at the oil and gas marketplace with the idea that they have successfully sold the application in the marketplace. What is their upside in terms of new revenue sources? What type of application can be sold into the market, and specifically how would it compete with this People, Ideas & Objects user driven initiative? What mode of organizational structure would be used to model the innovative oil and gas producer? I can only think of the bureaucracy and the Joint Operating Committee. Since this project holds the intellectual property of using the JOC, they are precluded from competing on that basis. SAP as I have said many times before, is the bureaucracy. And therefore any justification to replace Oracle or SAP's current software applications would need to address how it's not a waste of time, money and effort.
Please note this decision to replace the application is at the discretion of the users of this project. If they decide tomorrow to scrap the project and start anew that is fine with People, Ideas & Objects. We are not selling a software application over and over again. Our revenue is based on our Intellectual Property, the cost of developing the application and a percentage for maintaining and profiting from our development capabilities. The costs of this development is therefor substantially lower then the aggregate revenue streams of our competition.
Which I guess that leaves two options for a producer that wants to shed their bureaucratic ways. Either pool the industries financial resources in the People, Ideas & Objects application, or hire a few hundred developers each to do some custom in-house work. The latter probably makes the least sense when we consider the current bureaucracies are faced with declining reserves and production, increasing debt loads, quarterly losses and retirements of the brain-trust. But then I am rather biased about that.
This project has to find new sources of money and leadership to fill-in the many voids of the overall vision. If you know of someone who could help to financially support this project please do what you can to bring their attention to this. Ninety-five percent of the ownership of the oil and gas industry is held by individuals. Individuals who are the investors, users and developers of the People, Ideas & Object application. Join me here and lets build this software.
The PayPal button on this website will gladly take donations that can further us along in the road we are headed. Even if you can only contribute $10.00 we will be that much further ahead. Join me here.
Please note throughout these writings our reference to bureaucrats represents the CEO, CFO, COO and directors of the producer firms. These are the people that we see who have the authority to correct these issues and are the individuals responsible for the damage and destruction in the industry.
Please review this software applications Preliminary Specification, in which we provide an overall vision of how a producer would operate using the Joint Operating Committee as the key organizational construct.
If you are interested in joining People, Ideas & Objects user community then please follow this process. Lastly you can contact me at paul.cox@people-ideas-objects.com or (587) 735-2302 and (713) 965-6720.
