27, 28, 29, 30...

Adding to the list of compelling reasons for People, Ideas & Objects.

# 27, I am an unreasonable man.

Referring to George Bernard Shaw's saying.

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

Therefore, for the energy industry to progress depends on the unreasonable man. And that's me, just ask anyone.

# 28, 270 Billion Man Days per Day.

If every barrel of oil has the capacity to offset 18,000 hours of manual labor, then we have a dependence on energy. How far a fully loaded semi-trailer can travel on one barrel of oil? (Answer is 252 miles) How much effort would it take to move that product (80,000 lbs) that distance without the benefit of energy. At least 18,000 man hours. In yesterday's post I detailed the specific nature of this threat.

We're fooling ourselves if we think we can get along without petroleum based energy. With the Chinese, India, Brazil and other countries joining the middle class, the demand for energy will be significant. We need to solve this problem and that is what People, Ideas & Objects is focused on providing.

# 29, Collaboration facilitated around one vendor.

People, Ideas & Objects provides the oil and gas producers with a focused software development capability. This capability is universally available to all producers who use the applications. Enabling a quality of collaborations and communications that are not otherwise available.

If for example, Exxon were to be providing the software services of People, Ideas & Objects, then many producers would be hesitant to use the application as it provides too much information to Exxon. In the same way, each producer having their own systems would disable the opportunity of having the open collaborations that are available only when everyone is using the same systems. That is to say that different applications have different languages, protocols and methods. Communications are constrained and limited unless there are 15 IT people available to support the collaborations. Having everyone on the same system provides a means to facilitate enhanced collaborations.

# 30, Users and the Community of Independent Service Providers.

This one is so obvious, I almost missed it. It should really be number one, and will be in the final summary. Users are the critical aspect of making software work. Without users we end up with what we have today. Applications that users tolerate. This focus and drive towards the user will continue until the users feel the developers are reading their minds. That is what agile development methodologies can provide the user community. Anticipation of what the user will want.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Funding Budget Innovation
 

270 Billion Man Days per Day

That is the number of "man days of labor per day" that are offset by the consumption of 120 million barrels of oil and gas. 270 Billion man days per day.

Here are my calculations. How far can a fully loaded semi-trailer travel at 60 MPH on one barrel of oil? (42 gallons x 6 mpg = 252 miles) How much effort would it take to move that product (80,000 lbs) that distance without the benefit of energy. Lets suggest a man walking with 100 lbs of product @ 3 mph, it would take 800 such men 84 hours to move that weight that distance. That is total of 800 x 84 = 67,200 hours of energy equivalent labor. The world produces approximately 120 million barrels of oil and gas per day. 120 million x 67,200 = 8.064 trillion man hours and 1.008 trillion man days of physical labor offset each day. [Please note I am using the 18,000 (or 270 billion man days) man hours in these calculations as all energy use may not be as efficient as the semi-trailer example noted.] Kind of makes systemic risk and the potential of global warming, 50 years from now, look irrelevant.

Here is what we know. Prices for oil and gas have increased substantially in the past decade. These have fueled record activity, yet we still have an ability to produce only 85 million barrels of oil each day. I suggest we are organizationally constrained and are unable to achieve greater volumes of energy production. The bureaucracy can only run so fast.

We're fooling ourselves if we think we can get along without petroleum based energy or even a small decrease to what we use today. With China, India, Brazil and other countries joining the middle class, the future demand for energy will be significant. We need to solve this problem and that is what People, Ideas & Objects is focused on providing. Moving the organizational construct of the industry to the Joint Operating Committee. The legal, financial, operational decision making, cultural and communication frameworks of the global oil and gas industry.

Management are correct to have recognized this is not their problem. I say this with the greatest volume of sarcasm possible. Who's responsibility is it? To sit and do nothing about the scope of this issue shows a complete failure by those that are responsible. It won't take too much to get out of line in order for the collapse of society as we know and understand it today. If demand begins to develop, or supply becomes more challenged, rationing could precipitate the decline of our standard of living and force us to make choices that we should not have to make. All because the management didn't see that their product became so valuable to society. Maybe they are blind. We should start taking the names of the people that are willing to forgo their use of energy and hold them to it. Any rationing of energy is as logical and costly.

What is the future of this industry? Will it be the bureaucracies that are in power for another 100 years? Do we just let the world figure this one out on their own? Is there money to be made in this environment? It's time we began to take this opportunity and start providing the world with the potential for 2 trillion man days of effort, offset every day. What is our potential? And should we limit it so willingly?

People, Ideas & Objects proposes we build the systems to support the Joint Operating Committee. The design of these systems are detailed in this blog, the Preliminary Research Report, and Draft Specification. A design that moves the compliance and governance of the hierarchy to be in alignment with the five frameworks of the Joint Operating Committee. A design that enables innovation in the earth science and engineering disciplines to accelerate and meet the market demand for energy.

By saying things of this nature I risk alienating the status-quo. I say let them cut my budget. And it's no longer just me talking about this problem. In a blog post today, Professor James Hamilton is noting similar warnings. March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Failure Budget Funding Hamilton Energy Economics Leadership
 

Three weeks left...

That is we have three weeks left in our 2010 budget drive. We still have no commitments, funding or support of any kind. It was an objective of this funding drive to provide evidence to the directors, shareholders and investors of oil and gas that the management are too conflicted to support these developments. Again, the evidence is in. Management have done everything in their power to ensure these development don't happen.

Our appeal to the shareholders and investors is to bring about a competitive means of organizing the oil and gas industry. Just as Bear Stearns and Lehman Brother's managements didn't provide an alternative for their shareholders, I hope to appeal to the shareholders in oil and gas firms.

I believe there is a far bigger issue at play in the oil and gas industry in comparison to the banking industry. No one is missing either Bear Stearns or Lehman. Other then the shareholders that is. In oil and gas the economy is the direct benefactor of the energy the industry produces. We have documented here many times the calculation of 18,000 man hours of effort that is offset by each barrel of oil. By not having those barrels freely available to the consumer denies the full potential of our market economies.

This isn't the role or responsibility of the management of the oil and gas firms. At least that is what they suggest is the case in their version of the market economy. Who's responsibility is it to ensure that markets are well supplied? If the oil and gas producer's are not responsible, who is? At some point the issue of a lack of supply will require an answer. What will the oil and gas industry say at that point?

Last Tuesday I wrote about the use of some of the new mobile devices in making and implementing decisions at the Joint Operating Committee level. I also indicated that Exxon could not provide the marketplace with that type of software offering. If Exxon or any single producer were to provide a software solution like People, Ideas & Objects, it would cede too much information to Exxon or the producer. There are two other points to consider. One is the ability to have all the producers on the same technical capability, and the need to have one software supplier.

The ability to have all the producers representing the JOC using the same software denotes some of the value of using the Cloud Computing model. Accessing the most current version of the software and knowing that everyone else is using the same tools facilitates and enables collaboration and communication. When the application's are also transaction aware and able to manage the business based on the decisions of the JOC, then it can truly begin to optimize the science and engineering innovations.

The second point is how the industry is run today. Multiple vendors each providing one slice of the functionality to some of the producers to the JOC. Others are using other systems that are provided by other vendors who have different technologies and perspectives. Having the virtual meeting that I mentioned, with all of the potential described in Tuesday's blog post, will have to come with 15 IT personnel supporting the interactions and protocols. Good luck.

The need for one software development capability should be clear to readers of this blog. I have used the Intellectual Property developed in my research and this blog to concentrate these software developments to mitigate the issues in the energy industry. The use of Cloud Computing and the potential ease-of-use between producer firms requires one ERP solution provider.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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22, 23, 24, 25, 26...

We continue on in summarizing the many compelling reasons for People, Ideas & Objects to be funded. The five additional reasons being added today provide more support as to why these developments should continue. The previous 21 reasons were summarized in blog posts here and here.

22 & 23 Draft Specifications boundaries of firms and markets. The Chandlerian Perspective

Much of the Draft Specification used Transaction Cost Economics (TCE), Modularity and the boundaries between firms and markets in its design. These provided the guiding principles in terms of how the specification deals with the issues facing the oil and gas industry.

We recently discovered Harvard Professor Gary P. Pisano and his analysis of Science-Based Businesses. Certainly oil and gas qualifies as a science based industry. Importantly Professor Pisano bases his analysis in the Chandlerian Perspective (Reason # 23) and its impact on science-based businesses.

The Chandlerian Perspective defines the value and benefit of this software development project to the producer firms. In his recent paper Professor Pisano provided us with a summary of Alfred D. Chandler's perspective.

• Technical Innovation & Organizational innovation are interdependent.

If we are to increase the volume of science and engineering involved in each barrel of oil equivalent. Then we must organize ourselves in ways to define and support these desired changes.

• New forms of business organization & Institutional arrangements are invented to solve specific economic problems.

In other words we need to act. This change will not occur on its own. We have to design the solutions to today's problems. This point should take on a greater sense of urgency from the point of view that we are standing on the shoulders of several generations of giants. Any fall in the performance of the existing bureaucracy could be far more severe then we assume. Moving back to manual systems is not an option.

• Organizational & Institutional innovation is an evolutionary process - nothing guarantees "we get it right every time".

People, Ideas & Objects is providing a software development capability. One that adapts based on input from the user community. This is not developing to a fixed point, but designed to hit a moving target. I foresee no time in which People, Ideas & Objects will not have substantial work to be done. And this level of work is just as applicable today as it will be 20 years from now.


24 Intellectual Property is focused on oil and gas innovation, and available to all.

The research that is reflected in the Preliminary Research Report, the Draft Specification and this blog make up the copyright that I have earned in the publication of these ideas. Users and members of the Community of Independent Service Providers add to this Intellectual Property (IP) base with their contributions in defining and building the People, Ideas & Objects software applications. Access to this IP is through the user signing the license which provides access to the original research and Draft Specification. Permitting the communities to contribute as if the IP was their own. In turn they assign the right to any of their ideas or developments back to the original copyright owner, where in turn, it is available to the entire users base.

This is done for a number of reasons. This method provides the base of understanding of the industry to innovate at the speed at which the IP can be developed, or instantly. There won't be 100 different people claiming ownership of one part of an application or IP; and the cross licensing and other legal tactics that can be used by those that might claim some ownership.

Secondly the concentration of IP allows me to focus the industries dollars on one solution. Breaking the scope of the People, Ideas & Objects down into a competitive marketplace would only dilute the offerings of many potential service providers. Cobbling together software solutions to meet the scientific and engineering driven demands of the industry is the last thing that is needed.

Third, users and particularly the CISP earn revenues from People, Ideas & Objects for their ideas and IP. (Through the license they are effectively selling their IP back to me.) They also are granted a non-exclusive license to generate, for their exclusive benefit, any revenues associated with any services they provide along with the People, Ideas & Objects software to their producer clients.

A focused software developer and user community must be supported and motivated to provide the producer with the most innovative environment in which to manage their operations. The focus of the CISP is to provide the oil and gas producer with the most profitable means of oil and gas operations. Management of the IP in this fashion provides these objectives are attained.

25 No finance related constraints with People, Ideas & Objects.

People ask why not fund People, Ideas & Objects by going public or with bank loans. These options are not open to companies that want to provide solutions to small markets like oil and gas ERP systems vendors. They may be open, but they are certainly not able to fund the type of developments that are needed. At some point the producers will need to make payments to those firms that may have been able to borrow or raise money. I say we just skip that first step and start with the revenue from the producers to fund the developments.

This provides People, Ideas & Objects with no bankers, no public stock offerings or exchanges to distract or compromise our focus on providing the best software development capability to the oil and gas industry. I think this makes for a compelling reason for the producers to get behind this project and start funding the budget. When added to our compelling business model, where the producers pay for the costs associated with developments plus an element of profit. The producers (as individual firms) are able to gain far greater value then what their software development expenses will be. The CISP and Users are also able to earn a handsome living by providing the producers with this software and their associated services. Leaving no stone unturned in supporting the innovative oil and gas producer.

26 Marketplaces.

The Draft Specification contains three "Marketplace" modules. (Petroleum Lease, Resource and Financial Marketplace Modules.) We recently learned from Professor Ronald Coase that Markets are creations. I am embedding his video "Markets, Firms and Property Rights" for your review. Creating markets in these modules will provide a more dynamic industry, better able to meet the demands of an innovative oil and gas producer.



March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Budget Funding Pisano Innovation Management

What happens April 1, 2010

The question has been asked what happens to People, Ideas & Objects if on April 1, 2010 there is no financial support for the project. A difficult and challenging question, one that could be answered many different ways, based on the desired political outcome. Writing a blog keeps the transparency at a high level and therefore, there is only one way in which to answer the question.

Seeing the project as it stands today, it is clear there is much value that can be developed in the long term. A funding failure is not indicative of the lack of long term value. We will continue somehow and in some fashion, just as we have for the past number of years. If this were easy, it would have been built by now. We are not deterred by the scope and scale of the challenge that stands ahead of us.

When I say we, I mean this community. The number of people that follow this project is small by Internet standards. If we realize that we are talking about developing ERP systems for oil and gas producers based on the Joint Operating Committee, the numbers are impressive. This community deserves to continue on.

We have to ask ourselves "what if" the failure of the oil and gas industry does come about. We have seen the international banking industry collapse, many of the people in those industries have been severely challenged. Housing continues to be challenged, despite the press releases to the contrary. And now governments are being called on their budgets and debts. Whether it's Greece, Iceland or California. Governments everywhere are overextended and must adjust their ways if they are to survive. The oil and gas industry is being challenged, I believe, by increased demand from China, India and other rapidly developing nations. At the same time the industry is moving to a more complex scientific footing, greater political, geographical, and logistic risks. Change of this magnitude will cause the current bureaucracies to fail. We need to be there to pick up the pieces. Otherwise some economies will have to take a lower priority in terms of their allocation of energy.

A funding failure on March 31, 2010 is a high probability. Greater then 95% in my opinion. That does not provide us with a reason to stop. How we will continue on is in similar fashion to what has been done here in the past. We're closer to securing our initial funding then we've ever been. Patience is not something that I am oriented to, however, if this funding failure pushes back our timing, there is nothing that we can do about that. We should understand that we will probably be in the same position one year from now as we are today. Progress from this point takes the financial commitment of leadership of the industry. Until they step up, we will need to exercise that patience.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Perez The New Technologies Preview

I'm preparing the many posts of our review of Professor Carlota Perez' paper "The New Technologies: An Integrated View". In this document it becomes very clear to me why the situation at People, Ideas & Objects is the way that it is. That is of course, it has to be that way. The situation that I am talking about is the strong conflict between this software development project and the existing bureaucratic ways and means of the industry. As much as I would like it to be less confrontational, there is no choice in the matter.

It's about competition. The old competing against the new. The old failing and being replaced by a bottom-up rebuilding of the industry. Professor Perez states;

The crisis is truly a process of “creative destruction” but not only in the economy but also in the socio-institutional sphere. The new upswing can only be unleashed by means of vast socio-institutional innovations, in response to the requirements of the new paradigm and geared to facilitating the full transformation seething in the productive sphere. p. 16

And as much as we would like to have this transition managed in a constructive way, that's not in the cards. The bureaucracy has made their choice not to support these developments. That fact is very clear to me, and hopefully that will become evident to the energy company shareholders, directors and investors in this 2010 budget drive.

What began as the expectation of an enjoyable review of Professor Perez' 1986 document. Has turned into the discovery of a significant piece of research. I don't know how many posts will be the result of the review, but I expect to take the time that a document of this quality deserves.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 21 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Two Down, One To Go

Two months have now passed in our first quarter 2010 budget drive. The month of March is here and our deadline of the 31st is only weeks away. To date I have received no expression of interest, inquiry, commitment or cash. I get the sense that everyone is waiting for someone else to initiate the process.

The probability of a funding failure occurring March 31, 2010 is very real. As I have indicated, every attempt will be made to keep the project moving forward, however, without financial support this may become extremely difficult and in my opinion, unnecessary. What will be the cost of any funding failure? The users deserve the financial support of the industry.

The methods used to fund software development in the past have failed. Methods that have been successful for the SAP's and other large vendors. If software for oil and gas was a lucrative business. Where producers were presented with new and innovative software products, there would be no demand for this blog's research. Raising capital to fund software development in oil and gas ceased decades ago. There is a problem with the expectation that venture capitalists will fund the innovative software developer. The problem is the funding doesn't exist, particularly if the software developer doesn't have industry support of any bottom-up initiative.

The venture capital and bank funding avenues are closed. With the structure of this development, of providing a software development capability, with the source code being available for review, there are no assets in which to pledge to the capital markets for funding. This is a licensing model of Intellectual Property for revenue generation. Where the licensing of the Intellectual Property to the industry is how the software development revenues are generated. To suggest that the investment or banking community will be involved at any time during this project is incorrect.

Recall that one of the objectives of this budget drive is to prove the bureaucracy will not fund People, Ideas & Objects. Our appeal is to the directors, shareholders and investors of the oil and gas producers. Our research shows the use of the Joint Operating Committee is the direction in which the industry should move toward. That this transition is supported by strong, top level academic research. What alternatives have the bureaucracies proposed to deal with the issues of the industry? Within the transition to the Joint Operating Committee, the ownership class have an opportunity to increase their governance over their assets. That is the basis of this budget appeal.

I have also argued the bureaucracies are currently the beneficiaries of 100% of the proceeds of oil and gas sales. At today's prices, annual global oil and gas revenues are $3.4 trillion. Why is it expected that venture capital would be needed for these software developments, or for that matter, any oil and gas innovation? The parsing of financial resources to "appropriate" providers establishes the oil and gas bureaucracies control and influence over every aspect of the industry. The problem should be clear, they have done nothing in the area of software. When bureaucracies control the competition to themselves (the software) it is not in their best interests to sponsor People, Ideas & Objects.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 21 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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19, 20, 21...

Adding to the long list of compelling reasons that Directors, Shareholders and Investors should support these software developments. We add three more to total 21 compelling reasons.

We stand on the shoulders of several generations of giants.

As much criticism that we toss toward the bureaucracy, we must be careful to understand that the level of specialization and division of labor that is employed is significant. That to tear things down in a reckless manner would be irresponsible, and doesn't recognize the speed and altitude that our advanced societies and organizations are traveling at.

We also need to recognize that the bureaucracy can fail on their own. The need to have the alternative software and organizational constructs in place before they're necessary is something that we should be concerned about. Drawing an analogy to the banking industry, we can see that failure has its consequences.

Tacit knowledge drives software definition.

Tacit knowledge can not be captured in software. Tacit knowledge is how things are accomplished in oil and gas. And most importantly, how things are accomplished successfully. People, Ideas & Objects software development capability will provide users with the ability to develop the tools to use their tacit knowledge.

In an industry that is based on the earth sciences and engineering disciplines. Where each barrel of oil escalates the demands for ever more knowledge. The more effective deployment of human resources is challenged by these demands for more knowledge. Continuing to build individual scientific capabilities into each oil and gas company. To attain capabilities that are just-in-time for any anomaly, will bring about failure. Whereas through the Joint Operating Committee and the Draft Specification individual silo's are replaced by an overall industry capability that is pooled in each Joint Operating Committee.

The effective management of human resources in this fashion is inherent in the People, Ideas & Objects software application modules. Enabling the users of this software to build the tools to exercise their tacit knowledge is a necessary element of the future needs of the industry.

Enhanced Ownership Compliance & Governance.

This compelling reason consolidates the logic discussed in a number of recent blog posts. Our discussion of the role of government in funding the software development costs of their compliance requirements, particularly royalty compliance. Issuing legislation, regulations and assuming compliance does not consider the enhanced role of software in today's society. Professor Perez has challenged us to re-think the role of government. Government's direct involvement in developing the software for industry compliance is an area that we will continue to push for.

The directors, shareholders and investors want compliance to all governing legislation and regulations. These compliance requirements will be built-in with the transaction processing being built in People, Ideas & Objects Draft Specification. Compliance is a fall out of the transactions and actions being taken by the firms and their agents. Compliance should never be a driving criteria in decisions. One of the key value added processes in the Draft Specification is the Accounting Voucher Modules process for designing transactions.

With recent and prospective changes in the corporate board room. The role of directors, shareholders and investors is enhanced. Their direct involvement with the producers ERP system provider [or more specifically People, Ideas & Objects] enhances and enables greater compliance and governance for the owners and their direct representatives.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on these 21 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Budget Innovation Management Perez

Barbara Franklin on Nightly Business ...

Last nights Nightly Business Report has some interesting closing comments from Barbara Franklin. Ms. Franklin is a Director of Dow Chemical and Aetna Inc., and since 1980 has served on twelve other boards. She was also Commerce Secretary in the George H. W. Bush administration. Her comments were provocative and if correct show that shareholders, directors and investors are better able to deal with the governance of their firms.

Around 22:00 minutes into the show Mr. Franklin is introduced to discuss the "increasing role of shareholders in corporate governance" and "the rise of the shareholder is a blow to old school CEO's". Suggesting that our appeal to the shareholders and investors in oil and gas may not end in vain. In reviewing these comments it becomes obvious that I should include the Directors of the producer firms as I feel they too are interested in better corporate governance. A small oversight on my behalf.

The comments that resonate with the work that we are doing at People, Ideas & Objects are as follows:

The demise of the imperial CEO is at hand. They are more participatory and actively work with their boards.

After Enron and WorldCom scandals, the passage of Sarbane's Oxely act, a board room power shift emerged. Today boards are much more engaged with CEO's in a variety of ways.

• CEO Succession
• Strategy
• Ethics
• Executive Compensation
• Risk Oversight

And now a new board room power shift is in the wings. Some shareholders want to add their own candidates to a companies slate for election. Eliminating the need for proxy fights. The result could be a more collaborative governance structure in publicly traded companies. We'll see.

These are all positive initiatives. Since Ms. Franklin was speaking as if the first power shift, the boards being more engaged with CEO's, has occurred. The topics of Strategy, Ethics and Risk Oversight are areas where People, Ideas & Objects can add value to the producer firm. If as Ms Franklin suggests the second "power shift is in the wings" where shareholders are able to "add their own candidates to a companies slate" then corporate America could have the tools necessary to deal with many of the problems in today's business.

How could participation in People, Ideas & Objects budget funding help to make these "power shifts" more effective? For the shareholders, directors and investors having a direct say in the development of the software that their firm operates under, they will have the tools to deal with the firms issues and opportunities.

I have suggested many times in this blog that SAP is the bureaucracy. That management have used the SAP application to entrench their positions. As much as the management affect the change in the ERP software is the amount of change that can be exercised. Since SAP is static, the organizations do not change and management have SAP as their straw man excuse at hand.

If the ownership class had the ability to influence the software design, then they have the ability to influence much of the make up of their firm. People, Ideas & Objects is user based developments. The user community is comprised of all stakeholders. Since it is requested that the budget be funded by the shareholders, directors and investors of the firm, then they would have direct influence.

One of the breakthroughs of the Preliminary Research Report was the finding that software defines and supports the organization. To change the organization requires that the software be changed first. Therefore the investor, shareholders and directors need to acquire influence in a defined software development capability. In oil and gas that is People, Ideas & Objects.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Why would producers pay?

It is argued that oil and gas producers do not have the requisite motivation to fund the budget of People, Ideas & Objects. My concern in pushing this budget cycle is that the motivation to make the necessary changes has receded from the mindset of people in the industry. When the financial crisis was at its height, all seemed to be in desperate need of bringing about change. Now that the pressure brought on by the crisis doesn't exist, the sense of urgency to address these problems has passed. We have survived to live another day. To approach the manner in which business is conducted is off the radar of the majority of people within the industry.

It is far better that this has happened now then having it happen in the middle of our developments. I don't expect that "all is well" will be the call even as early as later this year. We have solved none of the problems that brought the system close to collapse. Stuffing the economy with up to $17 trillion in stimulus and cash has had a strong effect. The performance of the bureaucracy remains questionable and the opportunity for them to continue on, I'll agree, is well entrenched. What this imputes is that the only time something like People, Ideas & Objects can be developed is during a complete collapse of the industry.

So here is to living happily ever after. This last ditch attempt to acquire some funding to keep moving forward looks less probable each day. We'll certainly continue on until March 31, 2010 and see what might come about, after that we will have to evaluate everything in light of the funding failure.

In answer to the question that is being asked, why would the producers pay? The People, Ideas & Objects value proposition shares the one-time software development costs across the production profile of the industry. Simply the producer, like the user, will attain greater value by contributing then it's costs. As evidenced in yesterday's example of the start-up oil and gas producer. The engineer does not have to incur the overhead necessary to maintain compliance with the various regulatory agencies.

The People, Ideas & Objects software and the Community of Independent Service Providers (CISP) is a critical aspect of how the producers compliance is achieved. The tacit knowledge of the industry is held by the people that work in the business. The software can not capture this knowledge, but what can happen with People, Ideas & Objects is the CISP define, build and use the software tools needed to do their jobs.

Where we'll stand on March 31, 2010 in terms of our future is quite exhilarating. Nothing focuses the mind quite like this type of situation. What we need to be doing is getting to the business of the business of oil and gas. We face a questionable future, and the complexity and difficulty is only accelerating.

On a related note, I find the "elite" economists oddly sharing my frustration at the pace of these changes. Simon Johnson and this Reason Magazine piece are good examples of opportunities potentially being lost.

Needless to say we still have not received any expression of support, commitments or funding. [Maybe I should be the one to get the message.] If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Perez The Role of Government Part II

In this second part of answering Professor Carlota Perez' question "What role does the Government play in this?" we discuss the more general nature of the economy. In the first part we noted the expanded role that software plays in ensuring compliance to regulations. And how the software vendor has ultimately had to bear these software development costs alone with no financial support from the government agency issuing the regulations. In this second part I want to expand on the concept of this expanded role of software in our daily economic lives.

Lets assume that we have an engineer that recently saw the opportunity of a lifetime pass in front of her eyes. To realize this opportunity she needs to establish herself as an oil and gas producer and acquire land within a certain geographic location. The land and the money to purchase it are available, as are the drilling and other service industry technologies necessary to exploit the idea. The one problem this engineer has is that she has no access to systems that are capable of meeting the necessary compliance requirements of the jurisdictions she operates in. And no ability to interface with the various economic actors necessary to make the idea real.

Suddenly, she realizes that she is eliminated from pursuing this opportunity due to the fact that she has no software in which to operate this firm on an ongoing basis. Is the Governor of Texas willing to accept that the barriers to entry into the oil and gas industry becomes access to the necessary administrative software? Certainly the ability to build this capability exists, at approximately $2 million / year in additional administrative overhead.

The question is what is the governments role in the new economy. A new economy that is driven by the Information & Communication Technology Revolution. Where the access and ability to function in the marketplace assumes the ability to be in compliance with 400 pounds of paper regulations. An economy where engineers pursue new ideas or an economy of accountants and lawyers.

And how is it that People, Ideas & Objects is able to offer this engineer with a good idea with no costs associated with using the software? That is to say until she has established production, her costs for 2010 have been set at $1.00 / barrel of oil per day per year. Certainly there will be representatives from the Community of Independent Service Providers (CISP) assisting her in these compliance requirements. But the question of whether to "hire people or run software to be compliant" has been solved through People, Ideas & Objects. This overhead associated with the CISP is on an as needed basis and is a small fraction of the $2 million otherwise needed.

Many within the governments got ahead of this discussion by establishing the rules and regulations are self assessing. Self-assessing systems include most royalty regulations and of course many tax systems. If you make a mistake in filing your returns, you go to jail. It is necessary that negligence is not an excuse for mistakes. And I see no reason to abandon the self assessing style of system, if the software exists in the marketplace to ensure compliance. Governments have a fiduciary responsibility to their tax payers to ensure that equality and fairness are achieved, and that all revenues are collected. One side note is that Royalties are not taxes, but for the purposes of discussing self assessing systems, there are minimal differences.

Back to the question of the governments role in the new economy. Is it to facilitate high levels of access to all who want to compete in the oil and gas industry? Economic access or the lack of it has become a barrier to entry for all but those who have adequate size to maintain the administrative overhead. Will the engineer in this scenario, knowing that she could go to jail for not filing the right form, really be bothered to pursue that opportunity? And lets be clear, Bernie Madoff had no aversion to filing any forms.

Today I received notice from the Alberta Government that they do not share in the concerns that I expressed in Part I of this discussion. I indicated that our policies were to not build any software to meet Alberta's royalty requirements. And they indicated that Mr. Peter Watson, Deputy Minister of the Energy department has received that message. This point was probably moot as I do not see the user community including any Canadian jurisdiction in the Preliminary Specifications scope. Regrettable, but true.

Join me here and lets work together in finding the right answers. If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Budget Conversation Part II

The question as to what happens after March 31, 2010 and we don't have our budget for 2010 funded. Do we pack up and go home? There is nothing worse for a project like People, Ideas & Objects to have been turned down for its funding request. It puts the entire project at greater risk of ever being funded. So what is the plan, what do we transition to if the funding for 2010 is not secured?

The cut and run mentality is something that I have great difficulty with. I don't start something to have it left unfinished. The fact that the budget possibilities are more limited do not deter me from proceeding with this project. The May 2004 Preliminary Research Report was named "Plurality should not be assumed without necessity" or Occam's Razor for a reason. I knew that this level of change would be difficult. The quotation that I used for describing this difficulty was from the 1997 Report to the World Bank.

This statement was written by Ernst & Young in a 1997 report to the World Bank, and was described as: “It’s not what you know that you do not know that hurts you. It’s what you do not know, that you do not know that will. It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to bring about a new order of things.” Knoop & Valor (1997)

What I do know is we have not attained success. On the other side of the coin, I know what dangerous means. We will continue on in some fashion irrespective of the outcome of this budget drive. In the event that we do not receive any support, what frustrates me the most is that we are effectively losing another year. One change that might be considered is that we immediately commence a budget drive for the entire design and planning stage. These have been costed at $150 - 200 million.

In terms of the context of energy, failure has consequences. If I have to live the consequences of this project for a while longer that is fine. I'm not dragging anyone or anything down in the manner that this project is being proposed. I want to establish an environment where the motivation is to succeed. And if that success is not attainable with the current configuration, we'll work with the communities [investor, shareholder, user and Community of Independent Service Providers] to get it right.

Join me here and lets work together in finding the right answers. If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Hands off the throttle

One of the issues that I have talked about consistently on this blog is the manner in which management control all aspects of the oil and gas "market". Receiving all of the proceeds of the oil and gas production entitles them to influence the market in ways that are contrary to the markets benefits. What I mean is the managers feel that it is their money and they should expend it as they feel fit. Bringing all attributes of the oil and gas marketplace within their domain of responsibility. This was evident in the $147 oil market when they stated the costs associated with field operations were escalating faster then inflation. This prompted them to state that "suppliers were getting greedy".

Who's really getting greedy. The reverse side of this coin is just as ugly. I place the reason for this problem on the on again off again throttle actions of the management. That is the field operations are being populated with enough individuals who are addicted to drugs that complete camps are failing. Attempts to run "dry" camps fall into the same problem. What I think the problem is, is that management have consistently moved the throttle on and off once too often.

Anyone that wanted to work in oil and gas soon found the feast vs. famine environment not to their liking. Oil and gas field operations are difficult, dangerous, remote and frustrating. Frustrating from the point of view that the general rule is that the lowest IQ will dictate the outcome of any teams tasks. When NooB's are addicted to drugs they bring a level of unknowing and complete unreliability to the task at hand, the outcome is failure. Good people don't want to be associated with failure. Besides, other industries do exist.

To make my life more difficult again, there is a second aspect of this problem. The conflict of interest problem. This is very evident in the IT area, where many people feel little to no value is generated for the volumes of money they consume. When a good friend or cousin has an idea for how they could introduce a new widget, they inevitably show up on the doorstep. Where they promote the importance of the manager and suggest he should hire them to put the widget in place at his firm. The rest of this scenario has been played out a thousand times and no one seems to ever mention it. But we all know that the reason for many of the failures to generate value in IT is a matter of perspective. If you look at it from the perspective of the manager who has an ownership interest in the widget producer, then success is the word.

Lets put another card on the table. One that I have talked about consistently on this blog as well. The issue is that I should not own the Intellectual Property that is represented in the Draft Specification, Preliminary Research Report or this blog. This is not the way in the managers world. The first thing they did when I proposed that we conduct the research in September 2003 is state that they don't hire small research firms. And turned around and hired Cambridge Energy Research Associates to conduct the research. So I funded the research myself and published the Preliminary Research Report in May 2004. Little did the managers know that by that time, CERA hadn't completed their work yet! This is representative of the expectation that management is entitled to use whatever IP they desire when they desire to use it. And without compensating the inventor or creator.

The problem with this last point, is that the next great innovation is not going to be easy. Earning the rights to the copyright or patent is compensation for the difficult work done to generate the breakthrough. Without this compensation, of having monopoly rights on the use of the IP, the motivation doesn't exist to do the work. This is how the founding fathers of the U.S. Constitution wrote the laws, the oil and gas managers may have an issue with them as well. Otherwise without IP you have a stagnant market where no real innovation is occurring.

There has to be a better way. I think we need to look closely at the attributes that make a producer profitable. Is Intellectual Property of field operations a critical success factor in Exxon's profitability? Of course not. Does Exxon manufacture their own drill bits? Of course not. The profitable nature of any oil and gas company is the legal access to the reserves, [the lease] and the physical assets used in production. Outside of that it's the scientific and engineering capabilities of the people that the producer employ. No where will you find the management of IP as poorly handled as by the current management in oil and gas firms.

How the Draft Specification deals with this unique and irreversible [irreversible while management are at the helm] situation is by essentially removing management from the decision making process. Let markets be markets, but also provide them with more information. What is needed is a revenue or business model for the service industry so that they can invest and develop their skills and capabilities with a somewhat greater assurance that tomorrow, they won't starve. All of those service providers are being treated like they are in kindergarten, and I know this because of the response that we have received from the same management. I may be openly critical of them, however, they deserve it. Since it's 4:00 on a Friday they won't see it anyway.

The first information these service providers receive is the detailed capital and operating expenditure budgets of the producers for the next 5 - 10 years. Whether this data is detailed in the reserve reports or actual AFE's, the Draft Specification Resource Marketplace Module aggregates all the producers that use the system and publishes the information by geographical region. No specific producers data is known. It's all aggregate. None of this data is for certain, it may be different when the time comes. But what can be determined is what level of investment may be made by a service provider to achieve their corporate goals and strategies. Imagine you have an idea of applying hydraulic fracturing to "tight" sands. And you have an idea on how to retrofit that fracturing technology in a way to release that gas in a manner that could help those producers. You see the costs associated with drilling in these areas and you think it might work, think it might cause the drilling costs to decline substantially and have prepared a patent application for the device.

Having secured his idea in the patent application. The entrepreneur begins writing about the idea in the search-able Research & Capabilities Module of the Draft Specification. There he further earns the rights of copyright and, introduces the idea to the marketplace for producers to participate financially in developing the innovation and the marketplace gains the benefit of knowing the ideas and building off of them earlier. And before anyone realizes, the tight sands are the next great frontier of gas exploration due to the innovation contained within this one device.

The point being that information is what is needed for people to make reliable decisions upon. The industry needs to recognize the Intellectual Property laws that exist in the western world. Management can't succeed when there is no benefit to the one who thinks about the innovation. Management needs to respect the law of the land and stop this filthy habit.

If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Dosi Nature of Technologies Part I

The quality of the recent working papers has been spectacular. On topic, leading edge and practical to the work that is being done here at People, Ideas & Objects. Professor's Baldwin, Perez and Orlikowski have provided strong support for the potential users in the oil and gas industry who know the status-quo is not working and as a result are looking for alternatives.

Professor Baldwin's working paper on the Mirroring Hypothesis started to list what ingredients were necessary within teams to enable an innovative software development capability. And through the mirroring hypothesis, the software development capability will define and support the innovative oil and gas producer.

Professor Giovanni Dosi's 1988 paper "Sources, Procedures and Microeconomic Effects of Innovation" was the primary research document used in the May 2004 Preliminary Research Report. Much like Professor Perez, Professor Dosi is talking about technological paradigms. The abstract of this new paper "On the nature of technologies: knowledge, procedures, artifacts and production inputs".

In the most general terms, a technology can be seen as a human-constructed means for achieving a particular end, such as the movement of goods and people, the transmission of information or the cure of a disease. These means most often entail procedures regarding how to achieve the ends concerned, particular bits of knowledge, artifacts and of course specific physical inputs necessary to yield the desired outcomes. In fact, the procedures and the underlying knowledge they draw upon, the physical and intangible inputs implicated, and the performance characteristics of outputs are different but complementary aspects of what technology is. These things are the object of this short essay. p. 173

In the budget discussion that was yesterday's post. We see the context of these recipes within firms and markets. We are standing on the shoulders of several generations of giants. To tear up the bureaucracy resonates with all people who have had the displeasure of dealing with them. But to do so without an alternative is reckless and dangerous. To imply that the alternative can be brought to bear "just-in-time" or the bureaucracy won't fail on its own; are two ideas that we should not accept.

The financial crisis was brought about by bank managers using the same bureaucratic thinking that I see in oil and gas today. The bank management was compensated handsomely as they drove the industry off a cliff. The amount of shareholder value that was wiped out by management should frighten everyone in business today. After all that has transpired in the past two years, we see the bank bonus and compensation continue at record velocity! These bank managers were very wise not to have invested in any alternatives to their ways and means.

Are the leadership in the energy industry going to wait for the same thing to happen to them?

1. Technologies as recipes

If we think of only the components necessary to drill a well then we are missing a large portion of tasks and time involved. These also don't necessarily capture the methods that make the drilling of the well successful. These are the attributes that need to be designed, analyzed and implemented in order for the next generation of organizations keep us from the return of the dark ages.

The conception, design and production of any artifact generally involves (often very long) sequences of cognitive and physical acts. It is therefore useful to begin by thinking of a technology as something like a ‘recipe’ entailing a design for a final product which, much like a cookbook recipe, concerns a physical artifact together with a set of procedures for achieving it. The recipe specifies a set of actions that need to be taken to achieve the desired outcome and identifies, if sometimes implicitly, the inputs that are to be acted on and any required equipment. p. 173

The critical nature of the Community of Independent Service Providers in making the People, Ideas & Objects application modules successful can not be understated. The tacit knowledge contained within that community can not be codified into software. Software, however, can enable and exploit the tacit knowledge through the interactions of the technologies if we are smart enough to do so.

However, in the domain of industrial technologies this is not generally the case: the requisite knowledge and skills are distributed across many individuals and a crucial issue concerns when and how they are called for. No matter how mechanised a process (as in contemporary times), the construction of most artifacts is a team operation. Different people, and groups, are assigned to different parts of the process. How the artifact turns out will depend not only on the overall design and recipe that nominally is being followed (if any), but on how the work is divided, the match up of the skills and understandings of what is to be done under that division of labour with what actually needs to be done, how effectively the work is coordinated and managed and—at least as important—on the effectiveness of the procedures linking what different individuals (and, often, different organisations) actually do. pp. 173 - 174

It is reasonable to suggest, as it is true, that success within the oil and gas industry will be dependent on the CISP and the users who are enabled through the People, Ideas & Objects application modules. This should be stated as the objective, not a boisterous comment by someone who is full of themselves. As members of advanced societies these are the speeds and the altitudes that we are flying at.

Although the distributed nature of technological knowledge limits the accuracy of the ‘recipe’ representation of the nature of technologies, it does help to highlight their procedural dimension. The latter involves problem-solving procedures, in which respect building a car, writing a software package or proving a theorem are not that different (this idea is of course grounded in many contributions of Herbert Simon; see, for instance, Simon, 1987, and, for some elaborations, Dosi and Egidi, 1991). There have recently been attempts to formalise the structure and dynamics of such procedures in the combinatorics of elementary cognitive and physical components underlying the intra- and inter-organisational division of labour and its dynamics (see Marengo and Dosi, 2005; Marengo et al., 2000; Rivkin, 2001; Rivkin and Siggelkow, 2003). p. 174

Professor Herbert Simon is a Nobel Laureate that was quoted in the Preliminary Research Report as saying.

"...What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it" (Simon 1971, p. 40-41).

Taking all that Dosi has stated to this point, assumes that the "noise" of competing attentions are silenced and we have a focus on the desired objectives. Innovation is also about failure as much as it is about success. Can it get much more difficult?

2. Beyond explicit recipes: organisational routines

Luckily we are not starting from scratch. The Joint Operating Committee has been operating virtually since the early days of oil and gas, almost 140 years ago. The breakthrough in the Preliminary Research Report is that moving the well defined compliance requirements of the SEC, Tax and Royalties to align with the JOC's legal, financial, operational decision making, communication and cultural frameworks. Allows us to innovate off of the shoulders of those generations of giants that we stand upon. The JOC is a well defined organization.

A routine is ‘an executable capability for repeated performance in some context that has been learned by an organization’ (Cohen et al., 1996, p. 683). p.174

The existence of the JOC has even survived the ignorance of SAP. SAP's static interpretation of all companies and all industries worked at one point in time. At least that is what we are told. As this overall discussion has revealed, we must aspire to higher levels of capabilities within the innovative oil and gas producer.

Such ‘higher level’ capabilities go under the name of dynamic capabilities (Teece et al., 1997). p. 174

For the oil and gas industry to become more dynamic, says everything to me. Decisions, decisions and even more decisions. I see the industry occupying people's time with so many decisions that the current bureaucracies will choke and explode. If the industry is being run off the cliff by management isn't the question. Just as the former Soviet Union became so inefficient to the demands of its people, the bureaucracies in oil and gas are heading down the same well worn path. The banking industry provides us with current experience as to how vested, entrenched and corrupt management can become. To me the only question left to ask is; would it be more detrimental to society if the oil and gas industry collapsed like the 2008 financial crisis?

If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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Budget Update - Midway

We are now half-way through the 2010 budget drive. I have received no indication from any producer, shareholder, investor or group. No commitments and no money.

Recently we detailed the difficulty that People, Ideas & Objects has had with the entrenched management of oil and gas. This conflict is contrasted by the strong academic and "common-sense" nature of the Draft Specification, and research here on innovation in oil and gas. It was recently noted that the potential lack of funding of our budget, would prove to those shareholders and investors that the current management of oil and gas will never fund this development. It eliminates the need for their "skills" and therefore management will not do the altruistic act of falling on their swords.

In the Preliminary Research Report it was noted that software defines the organization. Therefore to change the organizational structure requires that the software be built first. To represent this relationship I coined the phrase that "SAP is the bureaucracy". Management have perverted this thinking and entrenched their positions by never sponsoring any software.

Yesterday Shell announced they were selling up to $10 billion in assets. This is the primary mechanism that I see the industry investors and shareholders securing ownership of the industry. As these producers management continue to rationalize their investments, firms using the People, Ideas & Objects software, Community of Independent Service Providers and users will enable this prospective ownership class to compete for these assets. Without the software being built first, this will not happen. A competitive method of managing oil and gas assets needs to be built in the software first.

To suggest otherwise is dreaming in technicolor. We live in advanced societies where specialization and the division of labor have been applied aggressively for over 200 years. Organizations, built on the structured hierarchy are unable to generate value and are actively destroying value with each passing day. Nonetheless, to approach the problem with an effective solution demands that higher levels of specialization and more advanced division of labor be inherent in the replacement organization. To muddle along in this transition is foolhardy and dangerous. We stand on the shoulders of many generations of giants and need to consider this in any transition. Spontaneous order may occur, but will it be efficient?

The Preliminary Specification, the Detailed and Final Specification that follow, consider these important principles be analyzed, discovered, designed and implemented. I began this process in September 2003 and received a ferocious response from the existing industry bureaucrats. I have kept my powder dry and my candle lit, now is the time to add the necessary resources to this process. If the bureaucracies are not creating any value, at what point do they fail, and what alternatives will be available to maintain the sophisticated standard and quality of living we enjoy? At some point, and I am suggesting on March 31, 2010, we will need to stop blaming the bureaucracy and seriously consider who's fault a failure might be. I know it will not be mine.

People, Ideas & Object recently developed a proxy method that would enable the investors and shareholders to vote for the oil and gas companies management to support this budget process. By asserting themselves in the development of the proxy, and voting on the resolution at the Annual General Meeting, might provide a mechanism where the investor and shareholder need not fund this budget directly.

Our budget fees are effective January 1, 2010. Penalties are effective on March 31, 2010 at 300% of the fees. All fees and penalties, if applicable, from January 1, 2010 are required to be paid in full before participation in any of the communities or developments. Companies that chose to wait will find that they are less capable of influencing the direction of the development to their specific needs. Use of the software, when built, will require all fees and penalties from January 1, 2010 be paid in full. Fee's for the calendar year 2010 have been determined to be $1 /boe / year. [A firm that produces 50,000 boe / day would be assessed $50,000.00 in fees and, if applicable, $150,000.00 in penalties for 2010.]

If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

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