Friday, May 30, 2014

Leadership in the User Community Part IV

Yesterday we discussed the career risks to those that may take the plunge and join the user community in one of the many leadership positions that are open. Today I want to discuss what it is these people will be doing if they do join. And what impact they will have on the oil and gas industry in the mid to long term. It would be my opinion that the work that is being done in People, Ideas & Objects and the user community will be some of the most interesting work that has ever been undertaken in the oil and gas industry. Few opportunities of this scale would come around within the lifetime of an individuals career, if at all. I have stated before this may be a once in a century type of opportunity.

The bureaucracy has been the prevalent form of organization in business since they took over from the merchants in the late 1800’s and early 1900’s. What we are doing with People, Ideas & Objects and the user community is retiring the bureaucracy and replacing it with a new form of organization primarily focused around the Internet. This is the trend that is happening in all industries as the Internet is capable of providing greater efficiency in terms of the management of our organizations. This is the scale of the changes that are being made through the implementation of the Preliminary Specification and the development of the user community.

To participate in this level of revolutionary change. That is on such a scale, is a once in a century type of opportunity. The opportunity to take today’s prototypical producer firm and convert it to the one that operates under the Preliminary Specification and the user community doesn’t exist. The scope of change necessary is beyond what is humanly possible. The forces of inertia from the bureaucracy would need to be fought at every step and our energy would be wasted in such battles. So we chose not to concern ourselves with such battles and instead rely on the forces of creative destruction to make the choice between the performance that the bureaucracy provides, and the solution that we present here with the Preliminary Specification and the user community.

The transition from the bureaucracy to the Preliminary Specification may be as a result of successful producers buying out laggard firms that refuse to change. That is the normal course of change as a result of creative destruction. We don't know and we certainly don’t care. What we are concerned with is that we provide the most profitable means of oil and gas operations. And with the Preliminary Specification we already have a material difference in our value proposition. This will be the focus of the development of the user community and particularly the leadership. One area of our value proposition that we are unable to quantify is the value that we will be able to provide the dynamic, innovative and profitable producer due to the toolset that we implement within the Preliminary Specification. And that toolset currently consists of automation of the business process, specialization and the division of labor. With the configuration of the industry into service providers there is ripe material here for the ability to significantly add more value to the industry.

So it is these topics and areas of focus that will be the domain of the leadership within the user community. Very high level, once in a century type of work that will be something an individual can highlight their career with. The changes we are making are dramatic and will have a material effect on the performance, makeup and manner of how the oil and gas operates for the next 50 to 60 years. Foundational work that is material to how the producer performs, and since our organizations are a critical part of our society, healthy organizations lead to healthy societies which lead to healthy individuals.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, May 29, 2014

Leadership in the User Community Part III

There are significant opportunities that lay ahead for the people who participate on the leadership team of the user community. They will have a hand in developing the organization that defines the manner in which the oil and gas’ business model is defined and supported. As we have noted before, the motivation for participation is the power and the money that the user community and service providers will hold in the new oil and gas industry. That’s the upside, and for the individual members of the leadership team, this upside will be significant. There are however some risks, and most of all the costs associated with participation in the user community in any one of the leadership positions.

The first cost that you'll incur, particularly in the short term. Is that your connections that provide you with your source of income, whatever that is, a job, revenue in your firm etc. will be at risk to dry up faster than you can say “what happened?” The bureaucracy doesn't mind acting out against individuals and when they see an individual who is taking a position that is counter to their long term benefit they act swiftly and ruthlessly. If you need your job or are happy with your company you should think twice about a leadership position. Leaders are expected to suffer for their cause. And this will be the primary way in which you will suffer. I can almost assure you that you will not survive in your job or your business if it is discovered that you have taken a leadership position in the user community.

The upside is that you’ll have significant amounts of time to commit to the user community. The next five years will certainly draw in your time and tax your savings while you pedal backwards in your life while everyone else moves forward in theirs. This can be a difficult thing for some people to sustain. To maintain the necessary focus on the job at hand while their ship is being torn apart by the storm. Do you continue on where the sailing “might” be better or turn back to port. This takes a certain type of fortitude and is not the domain of the majority of the population. It takes a certain type of person. An “A” class entrepreneur I would suggest.

The prize is that there will be revenues that are established in the user community. In the current budget the user community has a budget of $333 to $667 million for the software development costs of the Preliminary Specification. These are for the initial commercial release. As we have indicated before People, Ideas & Objects and the user community are based on the changes that are required in the industry. It is those changes that are the source of our revenues. People, Ideas & Objects and the user community are very much going concerns for the long term.

In addition the members of the user community are the ones that are establishing the service providers who provide the administrative and accounting services to the oil and gas producers under the decentralized production model. It is estimated that the revenues for these service providers for the North American oil and gas industry will range in the area of $40 - $60 billion per annum. These revenues are a replacement of the current G&A costs of the producers. It will be the leadership team that would have the primary opportunities in configuring solutions within the user community and the service providers. Therefore the known risks that were indicated in the earlier part of this post are not without their significant potential rewards.

People, Ideas & Objects have a reasonably high profile with the bureaucracy. If your name should show up as being involved in this project, not something that we would do first of all, they would attack you and anyone who shared that name with you. We can do this quietly. And protect people as much as possible. The Internet will provide us with some anonymity for some time. It also reduces our costs to the time involved in this project. So if you can hold your position and work on this project outside your job, all the better. We just need to realize that we operate in an extremely hostile environment that is very dangerous to those who participate here. And we need to take steps to ensure that no one is subjected to the bureaucracies antics unnecessarily..

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Wednesday, May 28, 2014

Leadership in the User Community Part II

The first installment of "Leadership in the User Community" was posted on April 22, 2014.

We have consistently asserted that we provide greater value to the dynamic, innovative and profitable oil and gas producer over what the bureaucracy is providing today. Our focus on developing the user community, its leadership and the associated service providers is our primary task in the next five years. We do this as we are striving to provide an alternative means of organization to the oil and gas industry. So that the oil and gas investor, and the people who work in oil and gas can choose the bureaucracy or People, Ideas & Objects Preliminary Specification, the user community and service providers as the method to manage their industry. Organizations don't change. Therefore without alternatives we are stuck with the bureaucracy. If we don’t work towards building an alternative, nothing will change. And just as organizations don't change, people do. And this is the place where people can begin the process of changing the oil and gas industry from a tired, poorly performing, muddling along behemoth to a dynamic, innovative and profitable industry.

We have documented within the Preliminary Specification how it provides over $705 billion in opportunity costs over the current bureaucracy. There are additional benefits that are not quantifiable that can be gained from the tools of specialization and the division of labor. It is a new way of operating the oil and gas industry. And as we have stated here before. Even if the bureaucracy could park their own selfish self interest and wanted to proceed with the developments we would not begin until the user community was fully formed. The Preliminary Specification is a fine vision of what the industry can operate as. However without the user communities involvement in the software developments it will be a great vision without the appropriate implementation. There must be strong user community involvement in the software development of the Preliminary Specification. It is mandatory, and as I have pointed out the user communities development is our current number one priority for the next five years. We have set this long time frame as we are without the support of the industry. The bureaucracy are challenged by the Preliminary Specification. They are eliminated from the landscape by it and therefore don’t want to be part of it. Therefore they will not support us. And therefore we have to build the user community brick by brick and stick by stick. And that takes time.

We have set out the 28 leadership positions of the user community that we are actively seeking to recruit today. These people will form the leadership team and help to develop the user community over these next few years. In preparing an offering for people to make a decision to go with our solution. And what that is qualitatively and quantitatively is unknown and unknowable at this time. We need to figure that out. We have however proven that we provide substantial value over the status quo. And the logic is compelling. People can see where and how they fit in within the industry quickly and begin to effectively and efficiently do their job. Using the Joint Operating Committee is a very natural way of organizing the oil and gas industry.

What compels someone to even think that we need to develop an alternative to the current way things are done. I don't know, and as I have indicated this has been a long term prospect for me. What I do know is that it doesn't sound so crazy anymore. Industry after industry is being disintermediated by Information Technology. And that is what we are doing here with the Preliminary Specification. And it is timely from a business point of view. The prolific nature of shale reserves is demanding a new business model be generated for the oil and gas industry. A business model that deals with the resource abundance and price destroying nature of producers producing unprofitable production. A business model that deals with allocating production fairly, based on profits and doesn’t harm a producer with shut in production with excessive G&A costs. A business model like the Preliminary Specification supported by the user community and the service providers.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Tuesday, May 27, 2014

Industry Specific ERP Systems

Modern miracles like the decentralized production model work because they are developed for the oil and gas industry. Just like SAP’s success in manufacturing is so strong. But don't take SAP’s success in manufacturing as the reason that it will succeed in oil and gas. And don't take the Preliminary Specification and expect it to do anything in the manufacturing sector. ERP applications need to be developed specifically for the industry that they operate in. The one size fits all type of ERP software product that is used to limited success currently. Is no longer capable of providing value to the dynamic, innovative and profitable oil and gas producer.

For Ford and GM there is no choice as to which system you want to operate with. SAP was designed and built for a major tier 1 manufacturer such as they are. What it does is schedule and manage the tier 2 and tier 3 manufacturers to bring their supply chain in line with Ford or GM’s needs. All that Ford or GM have to do is say they want a red truck to be built and the purchase orders for all the parts are distributed to all the manufacturers that build those parts and they are brought to the assembly line exactly when they are needed to build that truck. SAP does this with a precision and ease that make it their business in any manufacturing environment of size and scale. This is where they dominate and are the defacto standard ERP system.

At the same time SAP, which is the standard ERP system in the oil and gas industry, has essentially nothing to do with what happens in the oil and gas industry. Oil and gas is somewhat remotely related to a manufacturing process. Or it could be suggested that might have been the case in the past. And therefore elements of the SAP application might have been able to be retrofitted. With what I assert, the dynamic, innovative and profitable oil and gas producer needs, is the focus on the sciences on a go forward basis. And therefore the ability of SAP to deal with the needs of the oil and gas producers demands in the future are lost due to their focus on the tier 1 manufacturing capabilities.

At the same time it would be inappropriate for People, Ideas & Objects to market the Preliminary Specification or the decentralized production model to the likes of Ford or GM. Systems today have unique attributes that are industry specific and once outside of that industry, those software attributes are counter to the interests of any the other industry.

We may see what People, Ideas & Objects are imputing in their offering coming about in other industries in the next few years. What we are imputing is a homologation of the industry on one ERP system. And in the case of oil and gas that one system is People, Ideas & Objects Preliminary Specification hosted in a cloud computing configuration. With the capital costs of development, the focus necessary to complete the developments, high levels of inter-company interactions and the advantages of standardization. Competition in the ERP systems space will be between industry specific players with intra industry competition being a thing of the past.

Some would disagree with me on the viability of a model based on the ability to compete within an industry as a sole provider. Those that would disagree should be reminded that it is the Intellectual Property of the Preliminary Specification that is the source of competitive advantage that is used by People, Ideas & Objects. The ability and capability to circumvent that IP doesn’t exist in the marketplace. Therefore making the scenario that I have sketched out here the more probable one for the 21st century.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, May 26, 2014

No Posting Today

In recognition of the U.S. Memorial Day holiday.

Friday, May 23, 2014

A New Business Model Based On Value

Our discussion of the business models that are under management by the software of People, Ideas & Objects, the user community and the service providers and how we generate the majority of the value represented in our claim of $705 billion in opportunity costs. What the decentralized production model provides the dynamic, innovative and profitable oil and gas producer is the ability to become a price maker as opposed to the traditional role of a price taker.

What the decentralized production model involves is the reduction of the footprint size of the prototypical oil and gas producer. Focusing on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The producer is stripped down to the C class executives, the earth science and engineering resources, the land and legal, with some support staff. The remainder of the firm is reorganized permanently to service providers who are focused on an administrative or accounting process. And use the industry as their client base. It is in this way that the service providers are able to focus on their key competitive advantages of automation, specialization and the division of labor. As a result they are able to provide their clients, the producer firms, with better services at lower costs than what would otherwise be provided under the corporate model, or as we call them, the bureaucracy.

There are additional benefits as a result of using the decentralized production model. Each of the service providers are billing their services directly to the Joint Operating Committee that is incurring the administrative or accounting item. For example if the lease rental payment processor, or the production, revenue or royalty accountant processed a unit of activity for the property that month. Then they would charge that Joint Operating Committee for a lease rental payment processing fee, a production accounting fee, royalty accounting fee or revenue accounting fee. The real value comes into play if the producer decides, if the property is unable to cover the costs of operations and is indeed producing a loss, to shut-in the property. At which time the costs for the production, revenue and royalty accounting process service providers would not have any activity for the month and no administrative or accounting service fees would be incurred for the month where no production was produced. Note there may still be a charge for the lease rental payment as that is a charge that is incurred irrespective of production. And may be classified as a capital charge.

The point in having the administrative and accounting charges for the property to cease when there is no production is to have the property report a null operation. This is simply no loss, and no profit. The revenues less operations less overhead costs of the operation are null. This provides the producer with the benefit that the loss that was previously realized is no longer recorded. That the reserves that were being produced at a loss can be saved for a time when they can be produced at a profit. And the commodity markets can have an effective floor placed under them to ensure that there are no future declines in the commodity prices and that their other production receives a reasonable price.

If producers were to remove 15% of the production from the North American marketplace. The natural gas prices would rise to the point where the remaining natural gas production would all become profitable. This can be done under the decentralized production model without any of the producers being punished or harmed as a result. The reduction of your production profile has an equal effect on the G&A costs of the producer. If you reduce your production to 80% then your G&A would immediately scale to 80% as well. And the profitability on your remaining production would soar. This is the benefit that all producers would achieve under the decentralized production model and the reason for the high value of the opportunity costs.

The service providers would be the ones who would shoulder the loss of revenue as a result of any production cuts by the producers. However they are also the ones that are able to address the costs that they incur in providing the services to the producers. In essence, it is the service providers that are indirectly providing the producers with the ability to control their G&A costs for the very first time in the history of the industry.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, May 22, 2014

The Role of IT in Today's Organizations

The last time we discussed the user community we were addressing the two key motivating factors that people would be involved in the user community. And they were, that this was not your typical user community that is constrained in so many ways that caused it not to produce, or have any ideas, or even meet the needs of its community. The People, Ideas & Objects user community was different. In that we documented that it has both the power and the money to determine its and the industries direction with respect to the business models contained within the Preliminary Specification. These business models currently include the Joint Operating Committee and the decentralized production model. As time passes there may be additions to the user communities domain of business models and they would assert their authority over these as well.

Software can dictate the implementation of the business model. Indeed it is software that defines and supports the organizations that we use today. And that is why there have been no changes in your ERP software systems for the last ten years. The bureaucracy knows where their world begins and ends. And if they change the software they risk losing control of the organization. This is why they fight so hard against People, Ideas & Objects. When it comes time to structure the industries business model and provide them with the most profitable means of oil and gas operations it is necessary to get to the software development first. That is the role of Information Technology in the 21st century. It is not a cost of business. It is the business. Many people don't want to admit that fact. And as a result they will be left in the past. The fact of the matter is it is useless to own the oil and gas assets. If you don't also have access to the software that makes the oil and gas assets profitable. This is what People, Ideas & Objects, the user community and our service providers are providing the dynamic, innovative and profitable oil and gas producers.

It is our three organizations that are providing the industry with the choice of who manages their assets. The choice is between the bureaucracy and People, Ideas & Objects et al. We provide the most profitable means of oil and gas operations with over $705 billion in opportunity costs for the period between 2009 and 2019. These are incremental revenues above and beyond what the bureaucracy are able to provide. A substantial value proposition for a minimal cost and a reasonable amount of effort. The bureaucracy would have you join them in Church and sing hymns in prayer for another cold winter. That is what they think is valuable. We however, are offering an alternative.

The user community has defined a leadership team consisting of 28 representatives from the oil and gas industry. These people are being actively recruited now to help in the development of the user community. It is our plan to put together what is necessary, to provide the oil and gas investor, with an alternative means of organization for the oil and gas industry. What that actually consists of and how that comes about is unknown at this time. We will figure this out as time goes on. We have set out an appropriate amount of time for the development of the user community. Five years. And though this is an expensive time in terms of the opportunity costs to the industry. To expect that the bureaucracy will be doing anything but fight us and obstruct us in every way that they can, would be foolhardy. We therefore need this time to build this community on the basis of an effort that is built brick by brick, and stick by stick.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Wednesday, May 21, 2014

Pooling of Technical Resources in the Partnership Accounting Module

A few weeks have passed and its time to revisit some element of the Preliminary Specification to keep it fresh in everyone’s mind. Staying within the Partnership Accounting module and continuing on with the theme that we have been discussing regarding the technical resources of a producer firm. Today I want to discuss the pooling and charging of these technical resources to the Joint Operating Committee.

Recently we discussed the need for the members of the Joint Operating Committee to pool the earth science and engineering resources to make up the capabilities necessary for the property. This will be done due to the ability of each and every oil and gas producer to build the capabilities within their own producer firm. This will soon create excessive demand on the earth science and engineering professions that will extend beyond the existing industry resource base. With shortages in the numbers of earth scientists and engineers in the mid to long term. Alternative methods of organization, specialization and the division of labor are the means in which People, Ideas & Objects have chosen to deal with this issue.

When each producer is building the internal capabilities that are needed for their operated properties. They are required to build for every contingency for all of their properties. In doing so they are building capabilities that are unused and unusable when looked at from the industry perspective. These unused and unusable resources are trapped in the producer firm and are otherwise irretrievable. This current method will also discover difficulties as the underlying sciences continue to expand and demand that further specialization of the profession is necessary. Any further specialization, without the ability to reorganize these resources will cause the scope of what a producer needs to have on staff to expand further. Making the financial viability of the producer questionable at any production profile.

What People, Ideas & Objects Research & Capabilities and Knowledge & Learning module enable the producer firm to do is to specialize in their earth science and engineering capabilities. It will be in this way that the producer firm is able reduce the global scope of earth science and engineering capabilities within their firm. And take on a highly specialized capability. Something that the industry demands of the dynamic, innovative and profitable producer of the 21st century. Producers throughout the industry will be doing the same in terms of pursuing their unique specializations and capabilities.

As a result, the abilities and capabilities of the producers that make up the Joint Operating Committee will be diverse and quite probable to include what is required in order to cover off the global scope of the properties needs. A pooling of these capabilities will be enabled through the Knowledge & Learning module as its prime functionality. Additional capabilities, if required, can be made up from the marketplace of other earth science and engineering providers or producers.

Within the People, Ideas & Objects Preliminary Specification it is assumed that the earth science and engineering resources of the firm are not a cost centre but a source of revenue. Whether that revenue is derived as a result of direct charges to the Joint Operating Committee or to, lets call them customer Joint Operating Committees. The dynamic, innovative and profitable oil and gas producer has two separate and distinct revenue streams and lines of business within the lightweight footprint provided through the decentralized production model. This enables the producer firm to develop their earth science and engineering capabilities somewhat independently of their production profile.

The issue that is being resolved through the use of the Preliminary Specification here is the resource limitation of these critical professions. Using organizational methods, specialization and the division of labor are the appropriate means in which to approach the issue. The constraints of the Joint Operating Committee becomes an opportunity as it is the culture of the industry and therefore we are able to release the unused and unusable resources for use into the marketplace. Capturing this surplus capacity and employing it within the producer firms. Creating a second line of business within the producer firm helps to offset the costs of developing these highly specialized resources. Issues and opportunities that the dynamic, innovative and profitable oil and gas producer will need to address in the 21st century.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Tuesday, May 20, 2014

What the Future Holds in Oil and Gas

Our primary focus at People, Ideas & Objects is the development of the user community. We have prepared a vision of how that organization will operate. And set out its objective of providing the oil and gas producer with the most profitable means of oil and gas operations. We are undertaking the user communities development in order to remove and replace the current oil and gas industries bureaucracy from their comfortable positions. Providing the oil and gas industry with a dynamic, innovative and profitable capability to deal with the issues and opportunities it faces on a go forward basis.

To date we have established the vision and objectives of the user community. We have also set out 28 leadership positions that make up a leadership team. These positions are being actively sought from those within the industry to begin the process of building an alternative means of organization for the oil and gas industry. It will be these individuals who will invest their time and energy over the next few years in developing the user community to convince the oil and gas investors to choose the user community and People, Ideas & Object as the manner in which to administer the industry. The leadership team is comprised of the Board of Directors, the C class executives and the Product Owners for the Preliminary Specification.

The motivation for people to invest their time and energy in the user community is substantial. Within the user communities vision is the capability of the community to manage the business model of the oil and gas industry. The current business models of the Preliminary Specification include the Joint Operating Committee and the decentralized production model. It is within the user community that they are the point of contact with respect to any changes that are needed or desired in the business model. It is through control of these business models that the user community exerts significant power within the industry. There are substantial business interests that will be generated from the leadership teams participation in the user community. Derived from the user community are the service providers whom the leadership team would potentially be founding members of. A new sub-industry with revenues in the tens of billions of dollars.

One thing we do know is the bureaucracy are not conceding the marketspace to us. They recognize the power and authority that they have within the industry and are not about to give up on it. However, as opposed to conduct themselves in a constructive manner they choose to do nothing in the face of natural gas prices that provide no one with any earnings potential. After several years of overproduction they continue with a flawed strategy that encourages no discussion or recognition that its even an issue. Their franchise is secure and there is little for them to be concerned about. Recently with our claims of providing over $705 billion in opportunity costs, they have begun to address the problem and begun to copy our ideas. However this is only for appearance sake, as we have documented here on this blog their attempts will be fruitless and are only designed to get them past annual report season with a “plan” to deal with the problem.

The question people should be asking themselves is where does the future of the oil and gas industry reside. Is it a dynamic, innovative and profitable industry where Information Technology plays a key role such as with the Preliminary Specification and the user community. And where does the future of the bureaucracy belong. Is it the dominant method of organization that “muddles along” through the issues and opportunities of the day. Hoping and praying for another cold winter as the best strategy for the industry. We've been endowed with unbelievable reserves of natural gas. Are we destined to produce them forever at a loss. Or can we make the changes necessary to implement People, Ideas & Objects and the user community to make the industry a price maker and turn it into the most profitable means of oil and gas operations.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, May 19, 2014

No Posting Today

In recognition of the Canadian Victoria Day holiday.

Friday, May 16, 2014

The Dynamic, Innovative and Profitable Producer Part IV

One of the areas of the dynamic, innovative and profitable oil and gas producers competitive advantage is its land and asset base. It is also part of the producer firms lighter footprint that the land and legal resources are part of the firm. It would be inappropriate to leave these resources outside of the domain of the producer considering they are part of its competitive advantage. Within the Preliminary Specification the producer relies on the Petroleum Lease Marketplace module to develop and manage their land and asset base. It is this module that the producer uses to build their land and asset base and apply their competitive advantage. Just as in yesterday’s post, the Research & Capabilities and Knowledge & Learning modules were used to apply the firms earth science and engineering competitive advantages.

The Petroleum Lease Marketplace module sets the focus of the land and legal resources on building the firms assets. Using the Joint Operating Committee in the manner that we are requires that we look at these competitive advantages from a different perspective. Every firm has systems for their land and to a lesser extent their capabilities development and deployment. What is different in the People, Ideas & Objects Preliminary Specification, and demands that we begin these developments anew, is that we are using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. There is a substantial difference in these systems over ones that use the corporate model as their organizational construct. There are also technical differences as the Preliminary Specification is hosted as a cloud computing software offering.

If we look upon this development as an opportunity to develop systems that are able to provide the industry with the elements that have been missing in the other systems. If we focus on the Joint Operating Committee and its alignment of the compliance and governance frameworks of the current hierarchy to the Joint Operating Committees legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. We can then begin to develop the kind of software that people know that is possible, if only. Well now is the opportunity and People, Ideas & Objects, the user community and the service providers are the means in which to achieve that which is possible.

The producers value is represented in the tangible reserves associated with their properties. How a producer develops those reserves is reflected in the interactions that occur during the life of a mineral lease. Providing the producer with the effective means to manage their leases is the domain of the Petroleum Lease Marketplace. A marketplace module that operates in the lease marketplace where people are able to interact and conduct their business. The Petroleum Lease Marketplace module uses the OpenWonderland interface to replicate virtually the lease marketplaces that exist today. There producers are able to post, bid, agree, trade, buy or sell mineral leases. It is this type of interface that will enhance the ability of the producer to build their firm.

Friending someone on a social network does nothing from a commercial point of view. There is no commercial value generated and it is questionable if any value is destroyed. Participation in a virtual representation of a marketplace has as its core a commercial purpose behind the interaction. It is to buy, sell, trade or otherwise engage with someone for the purpose of attaining short or long term value. Marketplaces have always existed. Having a virtual representation of a marketplace is what the People, Ideas & Objects Preliminary Specification provides in order for the user to engage in the marketplace of mineral leases. Engaging in a manner that is more efficient than having to have the physical requirements of participation that the traditional marketplace demands. That is the value of the Petroleum Lease Marketplace.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, May 15, 2014

The Dynamic, Innovative and Profitable Producer Part III

Adopting the lightweight footprint that is available with the Preliminary Specification provides the dynamic, innovative and profitable producer with many attributes over what are available today. The dynamic nature of the producer will be one of these attributes. Focused on their key competitive advantages of their earth science and engineering capabilities, their land and asset base. As opportunities and issues arise they will have the flexibility to approach these with new alternatives as a result of this footprint, its lower cost and its dynamic nature. It will also afford more opportunities than the classic bureaucratic style that is in use today.

Within the Preliminary Specification there are the Research & Capabilities module for developing capabilities, and the Knowledge & Learning module for deploying capabilities. It is within the Research & Capabilities module that the process of innovation has been captured and codified in the various interfaces. If a new technology were to look promising in terms of its ability to expand the reserves or deliverability of the firm. It would be in the Research & Capabilities module that the producer would undertake the research necessary to develop the capabilities within the producer firm to build that value. It is where “knowledge begets capabilities, and capabilities beget action.” And where capabilities have been quantified as the “knowledge, skills, experience and ideas” of the producer firm.

Concentrating the energies of the producer firms competitive advantages of its earth science and engineering capabilities in the development of new capabilities based on the understanding of those resources and the activities within the industry is the focus that a producer wants to achieve. In a dynamic, innovative and profitable oil and gas industry things will happen quickly with little consideration for the laggard firm. Oil and gas success will be based on its scientific principles, if it isn’t already. The days when Lawyers could exorcise value through good deals, or financial people could structure good returns are gone. It is the principles of science that will lead the dynamic, innovative and profitable producer for the foreseeable future. The ability to focus on the development of the producers capabilities in the manner that is discussed here will be a critical part of a producers competitive advantage.

Consistent with that ability to focus on the development of the capabilities the dynamic producer will also need systems that enable them to deploy those capabilities in a focused and dynamic manner. And that is where the Knowledge & Learning module comes in to play. First we need to realize that the ability to maintain a focus on all that is happening within the industry will be beyond the capabilities of the majority of the oil and gas producers. The need to specialize in specific domains of the engineering and earth science professions will be a necessity due to the financial constraints of attempting to pursue everything. As we mentioned yesterday the dynamic, innovative and profitable producer will share their capabilities with their Joint Venture Partners who are specializing in their capabilities. It will be a pooling of those capabilities that make up the projects overall requirements. Additional capabilities will be supplied from the marketplace, if required.

It is the Knowledge & Learning module that presents the capabilities of the partners that are involved within the Joint Operating Committee. Each producer tags their capabilities for certain criteria and specific Joint Operating Committees. While in the Knowledge & Learning module for that Joint Operating Committee the user would be presented with the capabilities of all of the participants who are working interest owners in that Joint Operating Committee. It is in that way that the “knowledge begets capabilities, and capabilities beget action” and the “knowledge, skills, experience and ideas” of the people associated with the Joint Operating Committee are able to be employed in a Dynamic, Innovative and Profitable manner.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Wednesday, May 14, 2014

The Dynamic, Innovative and Profitable Producer Part II

Continuing on with our exploration of what the prototypical producing firm will appear like as a result of implementing the Preliminary Specification, the user community and its service providers. Without having to host the administrative and accounting staff. Without having to deliberately and actively go about the development of the necessary capabilities within your organization. The prototypical oil and gas producer will be able to offload, not just physically, but also mentally and emotionally the development of these internal capabilities. What the Preliminary Specification does is move the producer from a reliance on their administrative and accounting capabilities, to a reliance on the industries administrative and accounting capabilities.

The burden for the development of the industries administrative and accounting capabilities falls on the user community and the service providers themselves. They will be the ones that are incurring the physical, mental and emotional effort on behalf of all of their industry clients. When the time comes to enhance the tax capabilities of the oil and gas industry due to some change in legislation it will be the individual service providers that augment their organizations with the requisite resources to enable them to meet the requirements on behalf of all the producers in a timely fashion. The producers will be busy pushing the sciences.

It is the division of labor that enables the producer firm to focus on their competitive advantages of their earth science and engineering capabilities, and their land and asset base. It is the same division of labor that has the service providers and user community focused on their competitive advantages of automation, specialization, division of labor and reduction of the bureaucracy. Currently the producer firm enjoys none of the competitive advantages associated with their administrative and accounting capabilities. They are a tax on their speed, their innovativeness and most importantly their profitability. Each producer must maintain x capabilities in order to function as a producer. This level of compliance and governance is costing the producer a large share of the profits and there are no opportunities for cost control or cost sharing among producers. Use of the service providers moves the capabilities to the industry, enables the service providers to control the costs and most importantly shares the cost and resources among the producers. Key to the cost sharing will be the reduction in costs from the key competitive advantages of automation, specialization and the division of labor. The fact that the bureaucracy will not be paid for is a triple bonus.

This lightweight form of organization gives the producer distinct advantages. People, Ideas & Objects state that the Joint Operating Committee is the key organizational construct of the oil and gas industry. It is the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. By moving the compliance and governance framework of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee we attain a speed, innovativeness, accountability and profitability in our producer organization. It is these attributes that a dynamic, innovative and profitable producer needs in the 21st century.

What is the bureaucracy offering you today. Exactly what was on offer during the 1960’s. The fact of the matter is organizations don't change and the current bureaucracy is proof of that. Although they have taken elements of our ideas and used them to make them sound like they offering more than a hope and a prayer for a cold winter, as a strategy. Its a false hope. Organizations don't change, but people do. And that is why we appeal to the individuals in the oil and gas industry. The investors who are fed up with the earnings performance. The people who are tired of the bureaucratic ways of stuffing another ream of paper in the printer. It is the individual decisions of those that will join us in the next few years that will offer an alternative means of organization to the oil and gas industry. And then the investors can choose who they want, the bureaucracy or People, Ideas & Objects, the user community and the service providers to manage their assets.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Tuesday, May 13, 2014

The Dynamic, Innovative and Profitable Producer

One topic that we haven't spent too much time on is the effect that the Preliminary Specification, the user community and the service providers will have on the producer firm itself. We have noted that the producer will have a smaller footprint in terms of its size. With only the C class executives, the earth science and engineering resources, the land and legal and some support staff. However we haven't discussed the implication beyond the footprint size of the producer firm. Specifically in terms of how they will operate in this new environment as a result of the changes that we are discussing in the Preliminary Specification.

First of all the producer firm will be more focused on its competitive advantages of its earth science and engineering capabilities, and its land and asset base. Those are the only remaining resources within their domain that are of interest to the producer. And here specialization and the division of labor is at work to enhance the producers capabilities to focus on their specialized attributes of the sciences. This is done through the Preliminary Specifications ability to mitigate the resource restrictions in the earth science and engineering disciplines that are affecting those professions in the mid to long term. By each producer firm specializing within the sciences; then they are able to share these specialized capabilities among their Joint Venture Partners and pool their resources to achieve the necessary capabilities to meet the demands of the projects.

Additionally new engineering and earth science based service providers will need to be employed to provide some of the basic services that are currently handled within the producer firms. This offloading of lower level tasks will be as a result of a reorganization based on specialization and the division of labor across the industry that seeks to increase the output from the limited resource base. A new organizational method is the only way in which to achieve the mid to long term demand requirements of the professions. Having each producer firm build individual silo’d capabilities that cover off their domain of responsibilities will soon bankrupt each producer. Specialization could be used to correct this, however, specialization without reorganization will cause further problems. A bankruptcy will occur as the scope of the specialization without reorganization within the professions would become so broad as the requirements would exceed the financial capabilities of one firm.

Moving back to the administration and accounting of the producer. These will be done by the service providers that we have been talking about. The service providers that are derivative of our user community. These people will be located within their own firms away from the producer firm and will process the producers documents remotely. Much as the administration and accounting is remotely conducted today. Earning a service fee based on the task and transfer network. Denoting that only when activity occurs within the network will their be a service providers billing generated to the producer. Automation, specialization and the division of labor are the key competitive advantages that the service providers are able to provide the producer firm. And we should add the elimination of the bureaucracy to that list too.

This lighter weight of a producer firm will be much easier to manage for the production profile of the firm. Based on the capabilities of the firm, they may be able to scale up or down based on the commodity prices, or depending on their earth science and engineering capabilities. The administrative and accounting capabilities are industry based capabilities and are available to them on a service fee basis. Their production profile will determine the amount of their G&A costs. If they should double or triple their production profile their administrative and accounting capabilities would immediately be capable of dealing with the new properties or acquisition. And if the producer were to scale back production, the G&A costs would scale back in line with the production profile. This is the nature of the revised industry makeup based on the decentralized production model of the Preliminary Specification and the service providers.

The key focus is what are you capable of in terms of your earth science and engineering capabilities. Both in terms of the scientific capabilities and in terms of your production profile. Those are the two guiding objectives of the producer firm in terms of what they need to concern themselves in managing their organization. The issues of where to get a new tax accountant are today’s problems with the bureaucracy, and I'm suggesting we leave those issues behind by adopting the Preliminary Specification.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, May 12, 2014

The Value in Technology

I have spoken many times here on this blog about the maturation of the Information Technologies that we are using at People, Ideas & Objects. It is that maturity of the technology that enables us to undertake the large scope and scale of our project. And many of the technologies and companies that appear to be generating a lot of interest in the capital markets are focused around the development of social networks and big data. These two areas are calling into question whether or not the technological industry is getting itself into another bubble where valuations and perceptions of value are getting out of sync with the real opportunities. These are my thoughts in terms of what I see.

I think the real value in technology is in the application of Information Technologies infrastructure to the business model of an industry. Much in the way we are doing it here in People, Ideas & Objects, the user community and service providers. This has been done in other industries and will happen in every industry as time passes. This trend, known more or less as disintermediation is the updating of the business model to include the Internet and remove the bureaucracy. Both are good things and provide value for the industry for all concerned. This is where the value in the technology business resides. It is in the “old” technology companies that provide the mature Information Technologies that will see their involvement in this business. The Oracle’s, the IBM’s, Cisco’s, and Intel’s.

In terms of the social networks they are probably here to stay. Some like Twitter and LinkedIn have been able to establish themselves in the business arena. And therefore will be able to build value outside of the “social” space. As for the rest, as it was in the 1950’s and 1960’s to show home movies as a fad, companies like FaceBook may be wholly dependent on a fad of exchanging useless bits of information with other people. Professor Herbert Simon coined the phrase “A wealth of information creates a poverty of attention.” FaceBook may want to adopt the byline “A wealth of FaceBook friends creates a poverty of friendship.” More innovation comes from FaceBook everyday and that keeps the masses interested. At some point there will need to be some point to the exercise and I think that day is coming soon.

If someone approaches you with a product that is in the “Big Data” field, run. Like Y2K they both have three syllables. I don't think thats a coincidence. There is something about naming conventions and three syllable product names are code for those in the know, to stay away. If anyone finds a bit of information that provides value for a business from “Big Data” then I will be the first to be surprised. In the Preliminary Specification there are the Performance Evaluation and the Statistics & Analytics modules to apply analytical thinking to the data set in a Joint Operating Committee or a producer firm. This is not “Big Data,” this is only the practical application of the tools to the data streams that have always existed in oil and gas. Don't let anyone sell you on the concept of “Big Data” becoming a force for generating value in the oil and gas industry. Its not going to happen and the need to spend any money on this initiative is approximately equivalent to what you should have spent on Y2K, nothing.

So that is how I see the Information Technology business. The real money is in the traditional industries that will use the mature technologies in new business models that disintermediate the bureaucracy. And the real money will be made in the area of higher profitability in these traditional businesses. The old school technology companies will come out alright as well. Just don't look for too much excitement from your investments in them.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Friday, May 09, 2014

Motivating the User Community Part II

Our discussion has been focused on the motivation that we can provide to those that may be interested in participating in the user community. And particularly those that might qualify for one of the 28 leadership positions that we are looking to fill in this the first phase of developing the user community. Yesterday we spoke of the monetary component of this motivation from the investor, user community and service provider point of view. Today we want to discuss the power and influence that the user community and service providers will have in the oil and gas industry. And how these intangibles are a motivating force for those that wish to participate in this project.

Right now the bureaucracy holds significant influence in the oil and gas industry. Things are done the way they are done due to the fact that the bureaucracy is the only manner in which they can be done. What choice does anyone have. Therefore this provides the bureaucracy with an inordinate position in terms of how the industry will be managed. We see this in the approach to natural gas prices. The industry is a price taker with no discussion on how to deal with the abundance of natural gas reserves from shale. The bureaucracy says take it or leave it, that is the choice in terms of management of the industry. There is also no influencing the way it is done, and there are no opportunities or mechanisms for change. This “muddle along” strategy has been ingrained in the mindset of the industry and has become the standard as to how issues are dealt with. This is the power that the bureaucracy currently holds in the oil and gas industry today.

If People, Ideas & Objects, the user community and the service providers were to remove and replace the bureaucracy we would essentially hold this same power in place of the bureaucracy. It is the administrative and accounting authority and responsibility of the industry that has the ability to enable and constrain its actions. Without the bureaucracy, our offering would fill the void of any power vacuum. However, things would be different. People, Ideas & Objects are structured through its Revenue Model to be oriented to change. Without change there would be no revenues flowing through People, Ideas & Objects. Without revenues through People, Ideas & Objects there would be no revenues flowing through to the user community. These two organizations are dynamically focused on changes within the oil and gas industry. It is the inverse of the “muddle along” strategy of the bureaucracy. The service providers have in contrast a steady flow of revenue directly from the industry in the form of service fees. Their service offerings are directly reflective of the changes being made by the user community and the People, Ideas & Objects developers.

So although the power that currently is held hostage by the bureaucracy will only be held by a different group as a result of our removal and replacement of the bureaucracy. We are directly accountable to our revenue streams to the industry. We are also wholly accountable to the industry for the changes that are necessary to keep the business models and issues up to date and operational. Something that is currently not contemplated. This accountability is given to the oil and gas industry in the form of a software development capability that is dynamic and available to meet the needs of the industry on a go forward basis. Something that is critical in the 21st century. We are offering an accountability and dynamic capability that is currently lacking in the industry business model.

At the same time it will be those within the user communities leadership team that will need to be able to exercise the skills and leadership necessary to ensure that industry is provided with the software, software development capabilities and services that are needed. This is a difficult task to undertake from the point of view of developing the software in its initial stage. And a difficult task in terms of what is required on an ongoing basis. They will need the power necessary to make the decisions and implement the plans that the industry will need to see this come about. And I think with the structure being discussed here and the user community vision that is provided the leadership team will be enabled. Promises of money and power are serious forms of motivation, necessary to complete difficult tasks.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, May 08, 2014

Motivating the User Community

It is the user community that will have a significant role in the oil and gas industry. Not only will it be a key element in providing the oil and gas producer with the most profitable means of oil and gas operations. They will be the manner in which the industry operates and moves forward. With its control of the business model, its ability to affect the changes necessary in the software that supports and defines the administrative and accounting processes in the industry, and a budget that supports their operation. They will have the wherewithal to exercise the power needed to remove and replace the bureaucracy when the time comes. Adding to this user community vision is our recent discussion of the service providers and how they are derivative of the user community. And you begin to see the role and responsibility that the user community takes on in the oil and gas industry.

I am looking for those 28 individuals who will be interested in making the investment of their time and effort in the user community to prepare an alternative means of organization to the oil and gas industry. These people will make up the leadership team for both the user community as an organization, and the positions as Product Owners for the modules of the Preliminary Specification. Having the organizational and product leadership team working to build the organization necessary to provide an alternative means of organization to the oil and gas industry is the task that we need to conduct and to invest in. We don’t know how this transition will be done at this time. We'll figure it out as we go.

What is clear is the bureaucracy will not work with us. They have had every opportunity to do so and the only actions that they have taken is to attempt to steal our Intellectual Property. They are not managing the industry for the best interests of the investors, they are managing it in the best interests of themselves. And they could care less whether the industry earns or loses money. Natural gas prices have been depressed for years and there is no plan, no argument, and no discussion in which to deal with the problem. For them there is no problem. The only issue they see is us, in offering an alternative to their franchise.

Does anyone see the bureaucracy operational in the year 2020? How about 2025 or further down the road? Is it a viable, long lasting organizational method that meets our needs today or in the future? How is it that we can change to a new model of administration? Do we ask politely and smile? Is that the solution? I think they have to be physically removed. I think we have to give the investors in the industry a choice as to which form of administration they want to have administer their assets. The bureaucracy, or People, Ideas & Objects with the Preliminary Specification as its product vision, the Oracle Fusion Middleware and Applications as our technological base and this user community c/w the service providers. I think we can win this decision if we are able to structure ourselves in a way that shows we are a viable option to the investors. And again, how we structure that viable option to the investors is unknown and unknowable at this time.

With the opportunity costs at $705 billion for the investors to help them to select us. With the user community having a budget of $333 to $667 million for the software development work. And the 75 - 80% of the industries $40 - 60 billion in annual G&A costs. There is more than enough motivation for everyone concerned to make this transition happen. And besides, I think it would be rather interesting and challenging work that would be very rewarding. Making the oil and gas industry the most profitable that it could be.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Wednesday, May 07, 2014

A Different Tactical Approach

We see in the natural gas storage volumes a rebound forming from last winters significant drawdown. Due to much prayed for cold winter. Natural gas storage volumes were drawn down substantially and were the primary reason for the increases in the natural gas prices. Prices remain higher than they were last year as the storage volumes remain below their five year average. However their trajectory appear to be putting the North American storage volumes on target to breach above their five year averages sometime this summer or fall. A complete reversal of the situation. This is as a result of the enhanced prices that are still being realized, the production that has come on stream as a result of the higher prices and the prolific nature of the shale gas reserves.

I would propose an alternative tactical approach be taken by the oil and gas producers. If the Preliminary Specification and decentralized production model were the business models that were operational in the industry. This drawdown in the natural gas storage facilities would be the opportune time in which the producers could establish control of the natural gas prices and become the price makers that the decentralized production model enables them to be. By removing the unprofitable production from the marketplace at this time the buildup in the natural gas storage would lead to higher prices at a much more rapid pace. Now would be the time to implement the decentralized production model and establish the price maker strategy that the producers would have under the business models available with the Preliminary Specification.

What we have learned however is that bureaucracies don't change. They certainly won’t come within a million miles of People, Ideas & Objects or its Preliminary Specification. We have also documented the accounting and logistical difficulties that the bureaucracy would have in trying to conduct a reduction in G&A costs. And that volunteering for any work is counter to the best interests of the atypical bureaucrat. So instead they will continue to produce at capacity until the natural gas prices collapses some time in August or September and in the mean time practice that deer in the headlights look in the mirror.

Being profitable is for fools anyways. The oil and gas industry has cash flow. The practice is you report the cash coming in and don't say anything about the commitments or the flows going out. And it seems that everyone buys it. The only thing you have to do is be able to stand up during annual report season and have a “plan” that sounds reasonable for the next year. And you're good. Party on till next year. This is how its done in the oil and gas industry. So instead of thinking about a different way to deal with the natural gas storage volumes, forget about it. Thinking hurts don't you know. Just go with the flow and don’t say anything that upsets the show.

And another year of shale gas reserves are wasted in a long procession of wasted shale gas reserves. It is the investors money, and there are a lot of them remember. So we should not worry about it. The inertia that is behind this continuous waste of resources is quite surprising. With $705 billion in opportunity costs for the decade of not using the decentralized production model. You would think that there would be adequate motivation for the bureaucracy to do something about it. But after almost four years of expressing the value of this model, the only interest generated by the bureaucracy is to take the Intellectual Property. And we know that the taking of the IP was not to develop the idea it was only so that it could be proven to be unworkable.

One day we will have put together our user community and presented it to the investors as a viable solution to the issues that we are discussing here today. And the investors can choose which form of administration they want, the bureaucracy or People, Ideas & Objects with its Preliminary Specification, the user community and the service providers that offer a better way to administer the oil and gas industry. And we can be done with these foolish ways of losing money.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Tuesday, May 06, 2014

Our Service Providers Role

An important element of the user community are the service providers who are derivative of the membership of the user community. The service providers are critical in the new oil and gas industries ability to be the most profitable means of oil and gas operations. They will be the ones that take over the administrative and accounting work of the producers and conduct it on behalf of the individual Joint Operating Committees. They will use the People, Ideas & Objects software to manage the processes that each of the service providers administer. And apply their skills across the industry as their client base. It is in this way that if a producer shuts-in production at a property, the associated administrative and accounting costs decline in line with revenues.

Members of the user community will have the opportunity to establish the service provider firms when the opportunities present themselves. It is they who are in the best position to structure the service providers to the needs of the producer firms. It is therefore appropriate that the business opportunity be given to them on an exclusive and priority basis. User community members will be intimately familiar with the needs of the producers from the work they perform during development of the software with People, Ideas & Objects. In application of the Preliminary Specification to the prototypical producer it will be the user community participants that are the ones who are making the decisions and providing the creative problem solving solutions. It is also the user community participants who are familiar with the software development process with the People, Ideas & Objects developers and can continue to apply those skills on an ongoing basis. It would therefore be wasteful to have these skills atrophy by not recognizing that the user community participants are of great value to People, Ideas & Objects and the producer firms. But are also the ideal candidate to fill the role of service provider in the ongoing management of the industry.

Under the decentralized production model we have the administrative and accounting resources of the industry moved away from the producer firm to the service providers. Changing from a reliance on the producers administrative and accounting capabilities to a reliance on the industries administrative and accounting capabilities. It is therefore the G&A costs of the producers that will be shifted from the producer firms to the service providers as their revenue streams. Currently on a North American continental basis the producers are spending $40 - 60 billion in annual G&A costs. A large percentage of these costs, I would suggest upwards of 75 -80%, would be reallocated to the service providers as their revenues. Quantifying the value of this business opportunity for the membership of the user community.

This is a fundamental shift in how the oil and gas industry is operated. The scope of the opportunity for the members of the user community reflect that shift. The need to conduct this shift is critical. These changes provide the producer firm with the capabilities to move from a price taker to a price maker. Particularly in the North American natural gas marketplace. A situation that is quantified here at $705 billion for the decade between 2009 and 2019. The other aspect of the changes is just as compelling. Currently the oil and gas producer is required to attain the capabilities in house to conduct the administrative and accounting skills for all of the requirements and regulations that exist in the oil and gas industry. These requirements are onerous and provide little opportunity for the producer to deal with the actual costs of these overhead items. Each producer is a silo of overhead capability without the ability to share their capabilities with other producers, even though they can't fully use their overhead capacity. Clearly the overhead burden of the oil and gas producer is one of the core reasons that they are not as profitable as they should be. By moving to a reliance on an industry based capability the oil and gas producer will be able to leverage the volumes of their activities in the service provider and realize the benefits of specialization and the division of labor.

By having the industries administrative and accounting capabilities organized in this fashion there will be a direct benefit in terms of becoming a price maker, and a long term benefit in having the capability to increase the efficiencies in their processes through specialization and the division of labor.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, May 05, 2014

My New Job

That’s right after all that talk about the history of what I have been doing the past 22 years and the next thing I do is go and accept another job! Yes but its a very good job and one that I think I can do very well. Its the new Chairman of the user community. I don't know if that is a board of governors or directors yet, as no one “owns” the user community as an organization so there are no shareholders. Maybe the shares of the user community are just held in trust with People, Ideas & Objects and the board of directors operates in the best interests of the user community. We'll figure it out.

A few days ago we discussed some of the leadership roles in the user community and for the product, the Preliminary Specification. My taking the Chairman’s position is an extension of that definition of the leadership roles and the beginning of establishing the leadership in the organization. I am making my appointment to the Chairman’s position a condition of the license that authorizes the user community to access my Intellectual Property. Other conditions include the right of the Chairman to hold two votes and that there be only six directors in total, including the Chairman. The Chairman also appoints two other directors.

As we proceed with the development of the user community the other leadership roles will be filled in. If you see yourself in one of the many roles that has been discussed here please contact me. We have much work to do in the user community. Building an alternative means of organization for the oil and gas industry is a large task. Putting together a leadership team is the first step in making that happen. In total there are approximately 28 positions in that leadership team.

Other than the directors roles, these roles are paid and all of them are full time, long term employment. That is when the financial resources are secured and the developments begin. Before that we have to prove that we are capable of providing the industry with an alternative means of organization to the current bureaucracy. And that needs to be done on the basis of an investment by each and every one of the members on the leadership team. What exactly that proof consists of, and how we go about providing it to the industry is unknown at this time. What we do have is the technological base in Oracle Fusion Middleware and Applications. The product vision in the Preliminary Specification. And now we need to build the means in which to provide the oil and gas producers with the most profitable means of oil and gas operations within this user community.

If not us then who. If not now, then when. And how will the bureaucracy be removed from the industry if not by force. Without an alternative being presented to the marketplace then there will never be an opportunity to select anything other than the bureaucracy. This is how we must choose to remove them from the landscape. They are not leaving, and they are not doing their jobs. It is therefore time for them to go.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Friday, May 02, 2014

Marking the Passing of One More Year

It was twenty two years ago today that I was sitting in an office at Imperial Oil conducting an audit on behalf of a client when this idea came to me. It struck me in a flash and it all made sense. The only problem was there was no Internet, Local Area Networks were fairly basic, computers were weak and Oracle was touting Oracle 7’s declarative referential integrity as their latest innovation. But there was tomorrow and things would be better. Client server was the buzzword that was catching people’s attention. And as bad as things looked in terms of the offerings for the future, you probably have forgotten the types of applications that were operating in the industry at the time. So it wasn't a bad time to start a firm based on this new “idea” that came to me.

I spent the next year trying to convince Oracle to join me in my adventure. That was a tough sell. They weren't a large firm at the time. Were still very dynamic and entrepreneurial. Not that they aren't today, its just they were probably only 10,000 people in total vs. today’s 120,000. Eventually we came to an agreement and I eventually learned that Oracle had been looking at the partnership in a much broader perspective. They were making a commitment to the oil and gas industry as well as to us.

Off we went to raise the development funds and to begin the developments. And for two years things ran smoothly and there were no complaints. Its late 1995 and suddenly I'm having difficulty raising the money I need and Oracle seems to be a little distant. And this carries on through what was a frustrating year in 1996. We've all been through those times where nothing you try works out and everything is frustratingly difficult. That was what it was like and there was an apparent reason for that.

February 1997 Oracle has an industry presentation that they were making of their technology. I sit in on what looks like an interesting topic that might be of interest. And there it is. Oracle is announcing a new product, Oracle Energy a new client server based ERP system for oil and gas. Imagine my surprise. The following day I park myself in Oracle’s office to find out what’s going on and only get smoke filling the room. Nonetheless that was the last day we ever spoke again.

Pick yourself up, dust yourself off and keep moving forward. I then went around town trying to match us up with another ERP vendor that was interested in getting into the oil and gas space. It was 1997 and not only were there a lot of ERP vendors, they all had offices in Calgary and were interested in oil and gas. There was Baan, Dunn & Bradstreet, PeopleSoft, PWSql, SAP, and JD Edwards to name just a few. So we talked to them to see if there were any opportunities to make a deal and continue with our work. And in June 1997 we signed a deal with Price Waterhouse to partner with PWSql. They had an installed base of 40 oil and gas companies and were the newest technology on the street. A couple of weeks later PeopleSoft joined our partnership to add that extra bit to our offering.

Walking down fifth avenue on an August day I get a call from a shareholder saying that Price Waterhouse has just agreed to merge with Coopers & Lybrand. This was shocking news as the industry leading ERP application was Qbyte owned by Coopers & Lybrand. It is soon learned that we are the odd man out and that Qbyte will be put together with PWSql. Of note this went on to become IBM’s offering when PriceWaterhouseCoopers technology practice was sold to IBM, and is now P2 Energy. Oracle Energy left the marketplace some time around 1999 or 2000. I did get a chance to talk to a user of the product and they stated that “the implementation didn’t match the vision.” Justice I thought.

It was time for a timeout and to hide in industry for a couple of years. Put the software development on the back burner and let it simmer. From late 1997 to August 2003 I worked in oil and gas as a CFO for a small oil and gas firm. From January 2000 to April of 2004 I worked on my MBA. All with the intent of getting back into the arena of software development once again. The next time I would have the adequate education that I felt I needed to see them coming. And the education would help articulate that vision that started all of this in May of 1992. This sabbatical did that and since August of 2003 I have been actively engaged with the bureaucracy in developing this project.

I have to say the worst time of all of this was the time between 1997 and 2003 when I wasn’t actively working on the project. There is nothing worse in my mind then not having the opportunity to fully explore the vision and the opportunity. Walking around with this vision in my mind and not being able to do something constructive with it is the ultimate frustration.

I figure I have 25 more years left in me. I am determined to make the oil and gas industry as profitable as it can be. We have come a long way and I think the most difficult part is over. What will happen now will be the result of the desire of the user community and the investors in the industry who share in our objective to provide the oil and gas producer with the most profitable means of oil and gas operations.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here