Sunday, March 29, 2009

Energies difficulties

There are a number of articles pointing to what I feel is the big problem that we face. The energy problems that we were dealing with last year seem somewhat distant. It appears there is a general consensus that the high energy prices were a result of market manipulation. Nothing could be further from the truth. Energy issues are being forgotten and obscured by our current economic condition.

It's therefore pleasing to see that many organizations are discussing what I feel is the big problem that we face. McKinsey Global Institute have published a series of articles about energy and do a good job in laying down the basics of the problems. Their articles are part of a series "Averting the next energy crisis: the demand challenge".

The same message is being articulated by Daniel Yergin and his Cambridge Energy Research Associates. Suggesting there is a destruction in our capabilities in terms of energy production. Although I consider CERA's projections to be far too optimistic. Even they are suggesting a loss of up to 7.6 million barrels of oil per day will be lost as a result of the decline in capital spending. Matthew Simmons of Simmons Consulting captures the point in the following article .

The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices, an energy consultant and financier says.
The economic conditions continue to deteriorate and will do so for some time. The Economist is stating that "Trade is Collapsing Everywhere" showing the unique size and scope of the problem. Expecting that the economy will be able to be stimulated back to its previously un-sustainable level, is wrong. We need to be focused on the issues that we can solve. The energy problem being the most important.

We need to start the process of building this software to support the Joint Operating Committee. Without first organizing ourselves to take on the challenge of supplying the market demand for energy, we will fail. Our organizations have proven beyond reason to be incapable of meeting the challenge we face. Does anyone believe SAP and the bureaucracy will enable our organizations to do the job? When we look at this situation form a long term perspective we see what our priorities are. Please join me here.

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Thursday, March 26, 2009

The rise of virtual service grids.

I found this article on the web log, click on the title of this entry to be taken to the article. It is a reprint or summary of a book about Service Oriented Architectures (SOA). It has an interesting point of view regarding the changes that are occurring due to what they call the "virtual service grid technology". The conclusion states;

The changes brought by virtual service grid technology will likely transform the information industry in ways that are difficult to fathom from our present day vantage point. We are essentially at an inflection point defined by two forces: the transition from an up front investment model for IT requiring large capital outlays to a pay-as-you-go model. Market elasticity dictates that when price points go down, demand increases, partly due to pent-up needs, but perhaps more so because new entrants enter the field who could not afford to play before. This means increasing participation by the members of the "long tail" of cloud computing: small businesses, emerging markets and even individuals coming up with a great idea.

Second, the acceleration of the time it takes to build an application by orders of magnitude means the evolutionary process gets accelerated by the same rate. The evolutionary refinement of hundreds of generations taking place in the same time it took to develop a traditional application is mind boggling. (See also 1 , 2)
I try to stay away from getting too involved in the technical attributes of People, Ideas & Objects. Other then the Technical Vision, I prefer to stick to the business reasons to be developing the applications modules.

I also maintain that the future earnings of anyone working will be generated through the ownership or access to Intellectual Property (IP). The entirety of the IP of People, Ideas & Objects is available to the Community of Independent Service Providers through a license. Those that will be successful in the Community of Independent Service Providers will be able to use the IP in combination with their unique service offering. Providing a hybrid styled source of revenue for their firm.

The second point in this articles conclusion is something that has not yet been proven, but will be soon. Standing on the shoulders of giants has been a term in academia that reflects the ideas are built on the history of many ideas up to that point. The same concept is about to be realized with respect to the ability to build off of the extensive infrastructure of the Java Programming Environment. Many of the difficult and complex attributes of systems development have been standardized and developed.

With reasonable royalty payments to Sun for the use of Java, a development project with the scope of People, Ideas & Objects accesses many of the components that will make the majority of the process management and functionality from Sun's various software products. With out being too specific this substantially eliminates the time necessary to develop systems. Today the real key to the quality of these systems is the end users involvement. Please join me here.

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Wednesday, March 25, 2009

Martin Feldstein and Simon Johnson on MIT Video

MIT has released a video of Professor Martin Feldstein and Simon Johnson from February 11, 2009.  (Click on the title of this entry.) Feldstein is the former and long time president of the National Bureau of Economic Research where he was responsible for defining the time frame of when a recession occurred. He is also a Professor at Harvard and a frequent speaker in many of the conferences and forums where ideas, problems and solutions are discussed. Simon Johnson is an MIT Professor and former Chief Economist at the International Monetary Fund. He is also an author of an excellent blog that can be sourced here.

They are of course discussing the current global economy and what can be done. Both are quite pessimistic, and rightly so. The solutions that are discussed are very complex and of questionable value. We are well within the point that the cumulative of the stimulus should have worked, yet are constantly bombarded by an additional trillion here or there. We therefore are very close to the point in time where the majority of the people will realize that not only have the bureaucracies in business failed, but their government has failed as well. 

I have stated here many times that these economic events are part of the long term economic cycle. Based on the Shumpeteerian creative destruction, and specifically Professor Carlota Perez. Her analysis is based on her research of the last 300 years. I highly recommend reviewing the Perez label on this blog to understand the natural process of the old moving out of the picture and the new, in this case Information Technology, pulling the weight of the economy. 

All seems to be going to plan, exactly as Professor Perez stated in 2005. Providing the best reason of all for getting involved in People, Ideas & Objects, so please join me here

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Tuesday, March 24, 2009

IBM's advertisements

Many of the newspapers have been sporting a series of ads from IBM. The first of these is "A mandate for change is a mandate for smart." You know that a trend is well ingrained when the large suppliers are on board. With their recent announcement to purchase Sun Microsystems and being on the same song page that we are, there may be hope for their future.

They not only are on the same page, but they also get it, comments like this are the appropriate mindset for the economic conditions and times that we find ourselves. 
Right now - today - leaders of businesses and governments everywhere have a unique opportunity to transform the way the world works. 
The means that IBM suggests this is possible is;
First, the world is becoming instrumented. Imagine, if you can, almost a billion transistors for every human being. Sensors are being embedded everywhere: in cars, appliances, cameras, roads, pipelines... even in medicine and livestock.
Limiting the People, Ideas & Objects application to a technical perspective we see IBM's comments are consistent with our technical vision
Second the world is becoming interconnected. Like people, systems and objects can now "speak" to each other, producing oceans of data.
A further extension of our technical vision in which we note the crush of data will begin with the introduction of IPv6. I also like the comment about people, systems and objects and the similarity to our People, Ideas & Objects name. 
Third, all of those instrumented and interconnected things are becoming intelligent. They are being linked to powerful new back-end systems that can process all that data, and to advanced analytics capable of turning it into real insight, in real time. 
At times I find it as difficult to figure out if IBM is selling something or talking about something in the future. I think I should cordially welcome them to the vapor-ware market. There comment that they want you to join them in building a smarter planet. Welcome to the party IBM, pull up a chair and start pulling some weight if your serious. 

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Monday, March 23, 2009

Workforce 2020

Another Strategy + Business article talking about the impact of Information Technologies on organizations success. (Click on the title of this entry) This "Leading Ideas" article is subtitled;

For many companies, success in the next decade will depend on how well they implement information technologies that transform when and how people do their jobs.
People, Ideas & Objects falls well within the scope of this article. The work force is changing, mostly as a result of the changes driven by the current poor economy. I would expect that this economic trend will be augmented and supported by further calls to change driven by IT. This article provides us with an understanding of the scope of the challenge that is in front of us.
If business decentralization is a long-running trend with more stutter-steps than successes, it’s primarily because the technology to make decentralization work deftly has yet to be perfected or adopted by skittish organizations unwilling to fully take a chance on the unproven. But by 2020, innovative competitors — and inevitable gains in remote, mobile, and virtual devices — will make it impossible for most companies to deny that information technology is profoundly reshaping the workplace. By then, in many businesses, workers will no longer be bound by geography or by clocks.
First off the understanding that an innovative mindset is to try many things and discover many of the reasons that it won't work. These will be applied in this development process and enable us to approach this challenge constructively. This applies to the oil and gas industry and specifically to the earth scientists and engineers that will / are finding their volume of work growing.

The article rightly notes the geographical and time driven needs of a nine-to-five existence will become a thing of the past. The Draft Specification considers the "always on" and greater flexibility in a workers schedule are necessary for the future. Weather this is a demographic change or a reality brought on by the futile need to be in your office at 9:00 is unknown. I think the motivation to do so will be as a result of the existing technologies and the reality of the economic consequences of not changing. How this happens is also captured in the following;
The blended workforce. Over the next decade many employees won’t be employees at all; they will be temporaries, contractors, contingent workers, outsourced workers, freelancers, and, in business-to-business transactions, customers. Today, there are more than 42 million independent workers in the United States, or about 31 percent of the workforce.
The trend is well on its way and unstoppable. This is more of a quality of life issue with respect to the workers within the various industries. It should be asked how the oil and gas industry, already challenged with, a shortage of workers, retirements, increased workload per barrel of oil and gas and now competition on a worker quality of life issues. Good luck trying to hire people who are expected to use SAP or other bureaucratic supporting systems. But then again, I am biased. This trend will also bring new issues into play.
With outsourcing sure to be even more common in the future, managers will have to pay attention to project hand-offs and coordination costs between partners.
Something that should be considered is the specification and design of the People, Ideas & Objects application modules.
To keep their blended workforce happy, they will also need to create interesting work in an engaging workplace and pay workers’ invoices on time or risk exacerbating turnover, creating yet another fissure through which knowledge can drain.
As I indicated yesterday, the oil and gas producers have much to gain in getting involved in People, Ideas & Objects. Progress is being made on a day to day basis in Internet time. That is to say the accelerated pace of change of the Internet is the time table this project is following. I'd like to think the producers are progressive enough to start pulling some of the weight of this project.

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Sunday, March 22, 2009

Where are the major producers

I want to clarify that everyone involved in the oil and gas industry is affected by the changes in moving to the Joint Operating Committee. It is important that everyone has some representation in which to have their concerns and needs aired and met. What I mean by this is that the individual who conducts the billing of NGL's for a major producer, has the say in how and what their job involves. How it can be improved and integrated with the many new and innovative ways that are incorporated into this system. 

The Joint Operating Committee (JOC) is systemic and culturally ingrained, therefore it applies to global oil and gas industry. It affects producers, suppliers, governments and most of all People. Everyone needs to be represented. The objective of this systems development is to ensure it and the Community of Independent Service Providers provide the oil and gas producer with the most profitable means of oil and gas operations. 

One of the deliverables in the Preliminary Specification is the geographical reach of the application. The minimum has been set in the Draft Specification as to handle North American needs. What about the other regions. Most of the intermediate and larger producers have a global reach. These producers have to be involved in making these decisions. As the Preliminary Specification is the current task at hand, now is the time to get involved. 

So where are the major producers?

Lets look at their choices. Currently SAP and Oracle are in the marketplace as providers of ERP systems to the producers. Are these producers happy with these limited options? Are they pleased with the costs and never ending difficulty in making even the slightest changes? What are SAP and Oracle's business models? Will these be affected by the economic changes that all organizations should be contemplating? I think it is reasonable to suggest these software developers business models are fine and they know they have the upper hand in ensuring their future profitability. Is this "plan" of continuing to use these applications adequate to meet the escalating needs; in terms of the earth science and engineering that is necessary for each future barrel of oil?

What will the year 2020 look like? What will the demands for energy be? How will firms operate in a world that may be fundamentally different from what we experience today? Have producers the necessary systems in place to support the innovation and change dynamics for this time period? Without People, Ideas & Objects I believe they don't. Energy is the life blood of any advanced economy. With out an abundance of energy, we will not fulfill our potential. It is these points that I would suggest are possible as a result of having all parties come together and build the People, Ideas & Objects application modules

In light of the oil price run up, the major producers are flush with cash. As a result of the current down turn, I see little downside in reviewing their operations during the development. Therefore what is the risk of putting resources toward People, Ideas & Objects? What would they get for their investment?
  • A system based on the vision of the Draft Specification.
  • Coverage of their geographical areas of operation through input in the Preliminary Specification.
  • Producer can be in the front row in terms of working with users to develop innovative ways and means of defining profitable operations.
So whats the hold up? The economy is changing. Moving away from the focus on this quarters performance and more towards a longer term perspective. I hope so, that is to say we need the producers to be involved but not just for the next quarter. How is it that we can progress over the long term with a sustained effort without producers resources? How do we ensure that producers are committed to this project for the long term? This is the big question that I have no solution for at this time. 

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Wednesday, March 18, 2009

Sun's in the news.

We see a bid being made on Sun Microsystems by IBM. Sun is our key vendor, and as a software developer they are the key to our technology stack. Java, JavaFX, GlassFish, Solaris, NetBeans, MySQL, and SPARC to name just a few of the more important ones. In addition to the products, there are the research and development capabilities which brought about these technologies. Other then Apple, no other firm, in my opinion, has the diversity and completeness of product and service offering. I would include IBM in that comparison.

That is why I think the acquisition by IBM is smart. They need these technologies. And to a large extent I think this will be a positive for the assets formerly known as Sun. There is a concern that Sun has been living on its cash flow since the dot com meltdown. Unable to turn their research and development into a monetary gain or business that is self sustaining. I think the main owners of the company, who are also the founders in the early 1980's, might agree with me that the technologies are better in IBM's hands. 

IBM has many of the same desires as the management / ownership as Sun. Cloud computing is the future. Java is a key enabler. And open source software are the only way. These assets would be in the hands of the next best custodian in IBM. 

Apparently the company was shopped around to both Dell and HP. Neither of those firms were interested. I find that hard to believe. What I don't want to see is Sun assets being taken by Oracle specifically. Watch them step in with a bid to spoil IBM's party and raise the takeover price. Microsoft, probably couldn't take Sun due to legal reasons. or someone else who wouldn't have the resources or where-with-all to optimize the technologies.

So this is a thumbs up for the potential merger of IBM and Sun. Smart move by IBM, and maybe the best way to realize the technologies potential developed in Sun. People, Ideas & Objects started off working with IBM and moved to Sun when IBM were getting out of the oil and gas industry. The one gain we would have if this merger went through, is access to IBM's DB2 database and maybe a renewed commitment to the energy industry. 

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Monday, March 16, 2009

Open Source as Innovation Platform

It would be no surprise that I subscribe to Jonathon Schwartz' web log. The CEO blogger from Sun Microsystems. Jonathon is way out there in terms of his devotion to open source. And is the reason that Sun has opened most of their software openings. He has undertaken to write a series of blog posts on the methods that Sun is using to commercialize their open source offerings and how it sells hardware. Moving to the video format might not really work for him, you can view the three posts here, here and here, I would recommend that you subscibe to his blog here.

I found something that was said, or maybe it was the way it was said that made me realize another of the many benefits of open source solutions. Picking winners. I have been in this "business" of technology in one form or another since 1992. I refer to those days as the wild wild west. Nothing but gunslingers, bandits and posies. If you thought you missed something, believe me you didn't. 

The idea was you needed to get a big vendor interested in your ideas, code or customers. This was prostitution at the highest level of business. Those that where anointed by the vendors from California, would rightly strut themselves a bit faster then other lesser software providers / hardware vendors. These were the days and if you were lucky the relationship would last upwards of a few years before your customers and vendors quietly found themselves and their allegedly better business arrangements. 

Used and abused you leave the software industry and hope that one day it will mature into a real business. In my case I saw that Intellectual Property could provide a reasonable safe guard to the antics of the western minded, but when combined with open source, it was a good time to get back into the software business. Now how does that relate to the Sun CEO weblog video series. 

There is no picking of winners and losers. There is just doing the business of doing the business. If you have a good idea, you win. If you have a bad idea, hopefully you'll keep trying until you get it right. No more of this so and so has supported what's-his-name. Just do your job the best that you can and let the upside depend on your skills to add value. You don't need to get into the rut of trying to impress and promote someone into a business they should have been in if they hadn't been sleeping. All this as an added feature of open source software.

If you were looking for a place where the open source world would help in the oil and gas industry, look no further. Please join me here

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Sunday, March 15, 2009

The Internet @ twenty.

There is a video presentation of Tim Berners-Lee at the TED Conference in February 2009. (Click on the title of this entry for the video.) In the video he discusses his actions and concerns regarding his development of the World Wide Web. Many have claimed, including vice - president Al Gore, to have invented the web, but only Tim Berners Lee is recognized as doing so. Nighted by the Queen, Sir Berners-Lee notes in this video that the web will soon be 20 years of age, and that indeed it was recognized on Saturday March 14, 2009.

Berners-Lee worked for CERN, the group responsible for the Large Hadron Collider. His work at CERN demanded that a solution to the large volume of visiting physicists who were working there. Specifically Berners-Lee was concerned about the loss of kowledge through the large turnover at CERN. I think this parallels the potential loss of knowledge in the oil and gas industry. One that is addressed in the two modules of the People, Ideas & Objects Research & Capabilities and Knowledge & Learning

Berners-Lee goes on to talking about the future of the Internet and the role that data will have in that future. Asking what would happen if linked data were more readily available. And simply stating people would use it and make new and innovative ideas from it. Scientists in many disciplines have theories and ideas, but no data. He noted the efforts of dbpedia and I would add

In People, Ideas & Objects two modules address the need for additional data. The Performance Evaluation (Joint Operating Committee) and Analytics & Statistics Modules (Firm focused.) Each working from one of the two different perspectives of the People, Ideas & Objects application. Please join me here

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Wednesday, March 11, 2009

McKinsey on the New Normal.

Here we have another in a very long line of papers from McKinsey & Company. (Click on the title of this entry for access to the paper.) Economically we are in something that is not a recession, that should be easily concurred with by anyone in the world. When did the last recession question the viability of GM as a going concern. Or, CitiBank and AIG being bailed out for the nth time. 

Ian Davis, the author of this article and the managing director of McKinsey & Company lays it on the line. Change is in the air and no one is immune from the disruptions being brought about. This article is a conversation starter, the discussion begins with the economic context being raised. 
It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order.
The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.
What will the oil and gas industry look like after this economic phenomenon is finished? Good question. I have suggested many times that the People, Ideas & Objects software applications are the destination vision that the energy industry will be moving too. To assist in defining what the vision is not; I have asked if "anybody believes that the bureaucracy remains in control in 2020"? The answer is of course that will not happen. But "how" and "what" does the oil and gas producer change to? If it's not the People, Ideas & Objects application, and the Joint Operating Committee then I would be surprised. 

Davis makes it clear that the companies that are in distress with high debt levels will more then likely cease to exist. And, there are companies that will survive but not in their current form.
For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.
Either way, the reality is that around the world governments will be calling the shots in sectors (such as debt insurance) that were once only lightly regulated. They will also be demanding new levels of transparency and disclosure for investment vehicles such as hedge funds and getting involved in decisions that were once the sole province of corporate boards, including executive compensation.
Looking at the situation today, it is difficult to argue his point about the level of government involvement in business. This seems to be a much more palatable fact then it has been even in the most recent past. Nonetheless the governments enhanced compliance and involvement in business is probably a given. The need for a higher level of compliance to be handled in the People, Ideas & Objects Draft Specification is therefore a given as well.

The Compliance and Governance Module provides a different and higher level of compliance in comparison to systems like SAP and Oracle. As proposed, in conducting the business of the business in the Joint Operating Committee has a variety of compliance requirements that could and should take place at the time of the transaction. 

Compliance is not a direct action of the management, but a fallout of the activities undertaken by the Joint Operating Committee's. This difference in perspective will be a necessity in the future of these systems. If it takes the current management all their efforts and resources to meet the Sarbane's Oxley requirements, you can be assured they are unable to undertake "more" regulations in the future. This latter statement being proved by the fact that the shareholders are unable to be satisfied by the companies compliance efforts.
Through it all, technological innovation will continue, and the value of increasing human knowledge will remain undiminished. For talented contrarians and technologists, the next few years may prove especially fruitful as investors looking for high-risk, high-reward opportunities shift their attention from financial engineering to genetic engineering, software, and clean energy.

This much is certain: when we finally enter into the post-crisis period, the business and economic context will not have returned to its pre-crisis state. Executives preparing their organizations to succeed in the new normal must focus on what has changed and what remains basically the same for their customers, companies, and industries. The result will be an environment that, while different from the past, is no less rich in possibilities for those who are prepared.
The richness of the possibilities is available to those that join People, Ideas & Objects. Please join me here

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Tuesday, March 10, 2009

New Growth Theory

In an Op-Ed by Thomas Friedman in the New York Times entitled The Inflection Is Near? Friedman asks if the economy is undergoing a fundamental change.

What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”
Professor Paul Romer of Stanford University wrote his Reason Magazine 2001 article on New Growth Theory . People, Ideas & Things were the new elements of economic growth. Replacing the traditional economic growth variables transportation, communication and financial resources. 

That's the reason or justification for calling this project People, Ideas & Objects. Its about new growth in the energy industry. Using the Joint Operating Committee to define new and innovative ways of making the oil and gas industry more profitable and productive. Please join me here in taking the Draft Specification to the next level, the Preliminary Specification , and know that I am looking for the People to make this real.

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Monday, March 09, 2009

Security in the Draft Specification

We are beginning to build some traffic in the Draft Specifications knol. Which is the Google service I am using for the public access to the systems definition. The first module that people run into is the Security & Access Control Module. This is for a number of reasons. 

Security & Access Control will be the first module that is built in the People, Ideas & Objects. It is necessary to ensure that the users, producers and developers in the system have a high level access and ensure the security of the interactions and transactions that are undertaken in a secure manner. 

Having this as the first module also helps us test the module in a live setting. Eating our own dog food as the developers like to say. The Security & Access Control Module is made up of the various Sun Microsystem products known as Identity Management. The strategy in this development is to have Sun, who I think have a significant vested interest in making their products work, implement and manage this modules development and support. 

In an nutshell that is the critical aspect of the beginning of this module. When operational we can then begin the difficult task of implementing the Military Command and Control Metaphor into the generic Sun Microsystem Identity Management Tools. (Also part of the Security & Access Control Module.)

The point of this entry is to suggest that the reason the boring and painful discussion at the beginning of the Draft Specification is there for a reason. The importance of the module in terms of its timing and security needs. Those that are interested in many of the oil and gas attributes should just skip the Security & Access Control Module and start with the Partnership Accounting Module

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Thursday, March 05, 2009

It's Official, Everyone is an Entrepreneur

Reid Hoffman is on Charlie Rose talking about his company LinkedIn. Its not surprising that I just highlighted the LinkedIn service on Tuesday's blog post. This is a must view video, and keep in mind that everyone is an entrepreneur, entrepreneurs work in communities and People, Ideas & Objects is the community for those people that work in oil and gas. Please join me here.

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Our Governance & Compliance Framework

One area that I have not touched on recently is the Compliance & Governance Modules attributes. I think the key attribute that makes People, Ideas & Objects more functional and higher in performance is the Military Command & Control Metaphor that is incorporated in the Draft Specification.

Lets face it, the hierarchy is in control and has been extremely effective and efficient for over 100 years. It has been the great innovation of the Twentieth Century and deserves more respect than what I frequently belittle it as in this blog.

It also needs to know that it's time to go. Retirement is the right thing to do for the global economy to proceed in new organizational directions and methods. This is also what I think this current economic depression is. The old dying off for the new to take over.

What is the "new" and what can it do to replace the inefficiently efficient hierarchy. If we consider the "installed base" of how things operate around the world. Our Governance Model will have to be a method of organizational structure that competes with a very well established culture. And that is what the Military Command & Control Metaphor (MCCM) is capable of doing. And why it is selected as the alternate Governance structure of the People, Ideas & Objects software application modules.

The advantages we gain in adopting the MCCM are significant. The Joint Operating Committee is the organizational representative of the oil and gas partnership. A partnership that operates systemically and culturally throughout the industry. Occasionally some oil and gas assets are owned exclusively by one producer, but those situations are rare. When it comes to risk mitigation and extending the aerial extent of the operations, partnerships are a necessity.

The cultural equivalent to the hierarchy is the MCCM. People understand the rank and file of the Military far sooner then they are exposed to a hierarchy. For at least half the population, the MCCM is well ingrained by the age of five.

One advantage we see in representing a property with an MCCM. Traditionally the ability for the one producer that is designated operator is required to undertake all the necessary capabilities to manage the property. This has lead to the building of redundant and mutually exclusive capabilities in each and every producer firm. This creates the false expectation that the industry needs more talent. Whereas I think there is concurrence in the industry that it needs to more effectively deploy the resources they have, more so then acquiring new talent.

If there were a pooling of the resources of the partnerships. Then the MCCM will enable the pooled resources to operate in much the same fashion as NATO's member countries assign resources. What country is willing and capable of helping out and then the planning and assignments can be parsed out. What is necessary for these to happen is the elimination of the designated operator classification, and an ability to cost the pooled contributions to each producer in their correct or equalized ownership share. These are done in the Partnership Accounting Module of the People, Ideas & Objects Draft Specification.

A critical part of the success of the MCCM is the Community of Independent Service Providers (CIPS). They are the authors of the People, Ideas & Objects application and the people that will be providing the resources to be pooled in the JOC. They, operating their own independent services business', with the People, Ideas & Objects software in which they designed, are constantly enhancing, are the people that the producers of the JOC will be looking to fill the various and necessary roles.

I think the concept of using the Military Command & Control Metaphor is ready, and should be used in the Governance Framework of the oil and gas industry. These are the ideas that are included in the vision as detailed in the Draft Specification of the People, Ideas & Objects software application. Two related concepts that should be discussed soon are the enhanced division of labor and the natural separation of markets and firms. With the JOC being the market, and the producer of course being the firm. Please join me here in this worthwhile cause and I'll certainly do my best to make sure this content finds the people that will make this happen.

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Wednesday, March 04, 2009

Show me the money.

This community is all nice and good but to sustain it in the long, and short term, money is what makes the world go round. This post is about where and how that money is made and distributed to the People in the community who contribute their ideas and hard work in making this software and the Community of Independent Service Providers real.

In my ever-ending flip flopping on how the Preliminary Specification gets started. I now note the need to pay the people for their time in building this software. They must and will be compensated form their first day. This will slow down the development and delay the start-up. However, it is important to ensure that the realness of the project is viable from a commercial point of view on day one. Those that have been keeping close score, this is a change in the policy of this development.

Previously it was thought the earlier start-up might be achieved by the Community of Independent Service Providers investing their time in establishing their business offerings and contributing to the specifications. Although now they will be compensated for their time in developing and defining the software, the time they spend in establishing their business offerings (as members of the Community of Independent Service Providers). These are investments that will have to be undertaken themselves. The other point is that it keeps the clarity of the Intellectual Property (IP) clearer and cleaner. I'll have more to write about the IP in this development in a future post.

So where is this money to pay the users in this software development going to come from. I have made it quite clear that I hold certain Canadian producers responsible (our four piggies) for the attempted theft of the IP of using the Joint Operating Committee. It is also the large bureaucracies that are challenged by my overt statements that they are redundant and failing their stakeholders. Not good to challenge the clients of the business.

The money for this software development and community comes from the producers. Those that are currently invested in many of these failing oil and gas firms. And are being wiped out financially from these self absorbed management types. I have referred to this new clientele as the disgruntled oil and gas investor. And challenged the readers of this blog to find anyone that believes the bureaucracy will be operational in 2020. They may also believe that this is just another recession. The corporation and its highly layered hierarchy are a dying mode of organization. Today with the new Information & Communication Technologies producers can be better managed through this community. So please join me here, and understand that this content is looking for you.

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Tuesday, March 03, 2009

"Content will find you."

Writing a blog and pushing the idea of using the Joint Operating Committee is somewhat of a passive activity. You promote your ideas and marvel at the distribution and the growth of your statistics. The Internet, as a medium, is quite spectacular in compressing time lines and achieving things in a short period of time.

I've had this idea floating around in my mind that this passive method of aggregating users is the wrong approach. Particularly now as I have set 2009 as the point in time that I and 100 users begin the work on defining the Preliminary Specification and Community of Independent Service Providers. How do I go about doing this, sourcing these people.

Then from the back of my mind I remember the comment made by Cisco CEO John Chambers that "Content will find you." Interesting, I certainly have content. From the original idea of using the Joint Operating Committee (JOC) to the detailed Draft Specification which I think lays out a pretty clear vision of the significance of moving to the JOC. Content we have, therefore we have to actively go looking for the users. Chambers exact quote is as follows .
People talk about devices... but we think it's about the network. It will move from a generation about data and voice, more to visual networking, wired and wireless. We think the key content will find you, and we see changing business models reflecting this.
I think he is right. And indeed we have to switch gears in order to begin the task of getting the people necessary for this critical next step of defining the Preliminary Specification and building the Community of Independent Service Providers.

Great idea, how do we implement it. I have advertised with Google off and on and if you've had the opportunity to use those tools you'll agree their effectiveness is unquestionable. But they are relatively slow in terms of meeting the criteria of developing the Preliminary Specification and Community of Independent Service Providers. We need something more direct.

How do we find the people with the oil and gas operational experience and business development experience to make the oil and gas industry and the service industry operate based on the vision of the Draft Specification? I had set up a LinkedIn account last summer and determined that the "social networks" were more of a social then a business thing. I recently had the opportunity to check LinkedIn more thoroughly and have come away with a renewed appreciation.

After less then a week of using it, clearly LinkedIn is the "Network" tool that will enable the Community of Independent Service Providers and their collaborative efforts in defining the Preliminary Specification. With over 376,281 users that have classified themselves as in the Oil & Energy industry classification, sourcing 100 people should be possible, if not easy. If you have not used LinkedIn I highly recommend you sign in. The people that are on LinkedIn are more of a senior level in organizations and it is not a social network per se. Oh and the reason that its so valuable is that people who are using it are paying a monthly fee to access the service.
"Content will find you" is a valid concept and one that will be applied in this development. So as opposed to just saying join me here, I'll also being saying I'm looking to find you. Here is my LinkedIn profile.

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Monday, March 02, 2009

Berkshire Shareholder Letter

We've all heard of the "Oracle of Omaha" Warren Buffett and understand his perspective on business. Lately he has taken some solid hits to his reputation with the high profile and large investments he made in Citibank and General Electric. Both being questionable in terms of judgement.

Nonetheless he has the clarity of thinking that provides a solid grounding of where we are and what may be happening to us economically.
“The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” said Buffett. “Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so.”
The annual report of Berkshire Hathaway is available and down-loadable from here. The Wall Street Journal also has a review of the letter to shareholders here .

Is this recession really a depression? Have we seen a time when a recession has put so many homeowners underwater? Or watched the Japanese economies exports decline 45% year over year? A recession in which we have seen banks and auto manufacturers, media and almost every industry in such a decline that the poor performing companies are looking straight down the barrel of their demise?

Well actually yes we have. There have been many other periods of time in which the economy has been hit by a depression. The 1930's being the most recent. These are long wave economic theories that have been systemically analysed by Professor Carlota Perez. And I have applied them to the oil and gas industry in a variety of blog posts under the label Perez. The key takeaway from her theories is that there is economic stress, or shambles as Buffet calls it. This a necessary and productive time of renewal. The organizations that will come out of this decline will be more able to satisfy the needs of society and people. Something that the old economy styled companies where unable to do.

Professor Ludwig von Mises is famous for educating Professor Friedrich von Hayek in Economics. He also stated an important point pertaining to some of these long term economic cycles. And that is they are generally solutions to the problems of the day. Specifically he states that the "industrial revolution was the solution to the problem of mass hunger".
This puts in context the role of today's Information and Communication Technologies (IT). IT has for the past 40 years provided us with some of the solutions to the problems of the day. And we live in remarkable times as a result of these technologies. But there is so much more that is expected of them, and in many cases they have been systemically disappointing in terms of building specific value for organizations. With organizations unwilling to change or to adopt the new technologies to their fullest of potential, IT's impact has been limited. As a result we have barely experienced the value they could provide. I marvel at the stupidity of driving to the office in the morning. This activity consuming up to three hours of each individuals day, When in reality they were prepared and ready to work within 5 minutes of waking up.

We need these economic depressions to eliminate the weaker and less adaptive firms from the economy. In oil and gas I have written about the piggies and specifically about Canadian Natural Resources Ltd (CNRL). I have accused them of aggressively fudging their financial statements in the third quarter. They have lost Fidelity investments and this is the only news we have heard from them? They were to have their Horizon tar sands operational now, yet we only know that their is litigation with the contractor. With $26 billion in debt and greater then $3 billion working capital deficiency, these delays in reporting are evidence of the last moments of that organizations life. Say good bye to this pig.

The time in which people will be faced with the question "what do I do now" is answered with their involvement in this software development project. For a variety of reasons we need to begin the development of the People, Ideas & Objects software application. We have advanced as a society where the role of software in organizing is at a very high level. We have alternatives that make this choice very critical. We either build this software or regress to manual systems. A future that unfolds in a very bad way. We need to get moving with these developments, the time is brief, and we are not moving forward at this point in time. So please, join me here and lets build this software .

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