We now turn to the research area of the Research & Capabilities module in the Preliminary Specification. What we are particularly interested in today is to take control of the financial costs of the innovative activities that are being conducted within the producer firm. A firm of any size would have a variety of projects being conducted. With the volume becoming unmanageable quite quickly if there was no control over the amount spent and the type of activity. There are cost controls that are set in place in the People, Ideas & Objects systems like AFE’s and Work Orders, and these will sponsor most of the research undertaken in the firm. The interface that we are talking about today does not replace those, it only centralizes the information for a clearer understanding of the activity and its funding.
Your firm may become involved in many projects that seek to find new knowledge and information regarding the oil and gas business. Some of these activities may be rather large and will certainly be the focus and will have no difficulty in attracting the attention of the firm. Some however may be small and will be important from the perspective that the information is just as pertinent to the firm, but don’t attract the attention. Nonetheless, this information needs to be included in the day to day of each and every operation of your firm, and as such needs to be documented in the “Capabilities Interface”. How does the firm manage the various projects within a firm to ensure that the money spent and all of the projects are documented within the capabilities of the firm?
Within the Research & Capabilities module we will have the “Research Budget Allocation Interface” that will assist in dealing with the costs of innovation and the volumes of projects the firm is involved in. If an AFE is raised with some element of the costs including the partnership doing some joint research or innovative activity, this activity should be populated in the “Research Budget Allocation Interface”. Or, if a Work Order is raised to conduct some study, that too should be populated into the “Research Budget Allocation Interface”. The purpose of this interface is to ensure that there is no duplication of the research undertaken, if there is then the costs could be saved. It is also to document the ongoing status of the project. And ensure that the results of the project are documented within the “Capabilities Interface” of the Research & Capabilities module.
In general, each organizational arrangement of a firm embodies procedures for resource allocation to particular activities (in our case, innovative activities), and for the efficient use of these resources in the search for new products, new processes, and procedures for improvements in existing routines; however, the specific nature of these procedures differs across firms and sectors. For example, the typical degrees of commitment of resources vary by industry and so do the rates at which learning occurs. I now turn to the interpretation of these phenomena. p. 1135
Although this may appear like a simple interface, in the proper hands it would be a very powerful tool. It would provide a global view of the firms activities in the area of innovation and show the overall progress that the firm was making. It would also show where unrelated innovations might occur. Lastly, and here’s the real kicker, it might show where some opportunities lay. Professor Dosi (1988) states that profit motivated agents must involve both “the perception of some sort of opportunity and an effective set of incentives.” (p. 1135) Professor Dosi introduces the theory of Schmookler (1966) and asked “are the observed inter-sectoral differences in innovative investment the outcome of different incentive structures, different opportunities or both”? (p. 1135) Schmookler believed in differing degrees of economic activity derived from the same innovate inputs.
The “Research Budget Allocation Interface” would provide a window on both the “different incentive structures and different opportunities within the producer firm. Making for a powerful tool in terms of guiding the innovative oil and gas producer.
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.