Showing posts with label PLM. Show all posts
Showing posts with label PLM. Show all posts

Wednesday, August 24, 2011

The Preliminary Specification Part IX (PLM Part IV)


When I sat down to write the Draft Specification I wanted to incorporate the marketplace metaphor into the modules that made up the People, Ideas & Objects systems. There had been discussion of exchanges and web services in the past and those never quite captured the reality of what was possible. I think exchanges are technological solutions attempting to resolve non-existent business problems. Whereas the marketplace is a business reality. A reality that we can build a virtual technical environment that emulates the real marketplace. A big difference in terms of how we approach the building of these systems.

The next aspect was to determine what marketplaces existed in oil and gas that the technology would need to replicate. The answer to that question became quite simply. The marketplace for financial resources, people, vendors and the service industry or as we have called them resources, and the P&NG leases. We therefore simply created three modules that replicate these three markets within the People, Ideas & Objects application. Talking about the output of the system should probably keep this simple fact in mind. That these are marketplaces. Marketplaces that are backed up by a proposed user community and software development capability that can evolve the applications as these markets evolve.

More on the division of labor and specialization.
When we were conducting a lot of our research. Professor Langlois noted that expansion of the division of labor and specialization was through the simple act of “gap-filing”. Work that wasn’t being done before, could-should-would, be nice if it was done now. In this day and age it might be easy to put the person in place, but what about the systems to support that person? As I have suggested before, should we consider these administrative positions from the point of view that these people will work for a process as opposed to any one company or Joint Operating Committee?

More on Documents.
The types of documents that are generated within the Petroleum Lease Marketplace are somewhat self-evident. (Recall we are including Land, Legal, Production Admin, Exploration Admin, Accounting and Others in the classifications.) Most of them are created in collaboration with the participants of the Joint Operating Committee and include: Authority for Expenditures (AFE"s), Capital Budgeting (Firm and JOC), Construction Ownership and Operating Agreements, Mail Ballots, Daily Drilling Reports, Lease Bonus, Lease Rental, Lease Taxes, Areas of Mutual Interest are some of the forms, processes and attributes of the Petroleum Lease Marketplace Module. A more detailed specification will be the result of the communities contribution and commitments.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Tuesday, July 13, 2010

The Marketplace Metaphor

The Draft Specification includes three modules that employ what we call the Marketplace Metaphor. The Petroleum Lease Marketplace, Resource Marketplace and the Financial Marketplace Modules. Each of these modules create an environment that is similar in many respects to a marketplace in the “real” world. A virtual representation, and means for people to interact in marketplaces. Definitions of a marketplace include;

market: the world of commercial activity where goods and services are bought and sold; "without competition there would be no market";
The Petroleum Lease Marketplace (PLM) is a virtual market where partners can interact with each other to post and bid on petroleum leases, negotiate and execute agreements, buy and sell properties to name just a few of the many activities that can be carried out in the PLM. The PLM is designed to facilitate and support these transactions and activities, and capture the data and information necessary to manage the assets for the producers involved. 


The PLM is in many ways the beginning or initiation of the JOC. Since the JOC is the communication framework of the industry, many of the partners communications will be held within the Petroleum Lease Marketplace module. Mail ballots, AFE’s and agreements are initiated by the user while using the PLM module. 

The Resource Marketplace module creates a virtual representation of vendors, suppliers and the people who work within the oil and gas and service industries. Working closely with the Knowledge & Learning and Research & Capabilities modules, the Resource Marketplace provides the producer or JOC with the ability to interact within the Resource Marketplace to engage with vendors for the products and services that producers and JOC’s need. These interactions will include the capacity to contract, seek bids, billing, accounts payable and e-commerce capabilities. 

Recall in a recent post we documented how the Draft Specification facilitated a greater level of specialization and division of labor. These two economic theories being the source of all economic growth. That post documents that the process of “gap-filling” is how the division of labor is expanded. This “gap-filling” is part of the Resource Marketplace where producers and suppliers find one another in an effort to expand the output of the industry. 

Finally the Financial Marketplace module provides a virtual representation of the financial marketplace. Using the perspective of the Joint Operating Committee presents a different view of the oil and gas assets. Traditionally each producer has maintained their own financing of their oil and gas assets. What the Financial Marketplace module does is change the perspective, of how oil and gas assets are financed, from the producer firm to the Joint Operating Committee.

Each of these marketplace modules employ the People, Ideas & Objects user vision. The point of this post is to reinforce the use of the marketplace metaphor in the development of these systems. When we adopt the Joint Operating Committee as the key organizational construct of the innovative producer, we gain the ability to create this kind of software and methods of interaction within real and virtual marketplaces. 

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

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Saturday, February 06, 2010

Product Owner - Position

The Agile / Scrum software development methodology has many predefined roles. The Product Owner is one of them, and Product Owners are a part of the Scrum team. People, Ideas & Objects will have many Product Owners. One for each of 20 possible Scrum teams. [Eleven defined modules of the Draft Specification, User-Interface, Architecture, Data model etc.]

Project Owners are "pigs" in the scrum world. Pigs, unlike Chickens, have everything invested at the breakfast table. An appropriate term in my opinion. Their job is simple, satisfy all stakeholder concerns. Working with the many Account Managers of producers and their users, the Community of Independent Service Providers, (CISP) and their Scrum Team members. Product Owners will be the individuals who magically prioritize the developments to meet the changing needs of the producers.

By adopting Oracle technologies People, Ideas & Objects inherits their entire technology stack. An Open yet integrated technology stack like no other. Making the Draft Specification and subsequent designs executable is no small task, we are grateful for the vision and execution of Oracle Hardware & Software. We are also constrained by those technologies, and it will be the Product Owners that feel those constraints the most.

By adopting Oracle we will have an advanced tool set and infrastructure to deal with. Our developers and particularly our Product Owners will have to be intimately familiar with Oracle technologies. This is the standard means of Oracle application delivery in the marketplace. There is a substantial marketplace of Oracle consultants available to People, Ideas & Objects and associated communities. In addition to the need to be familiar with the Oracle technology stack, Product Owners will need to be intimately familiar with the oil and gas industry, generic business needs and their "products". I'm just glad I already have a job at People, Ideas & Objects.

By way of a scenario, as the Product Owner of the Petroleum Lease Marketplace (PLM) Module a day might look similar to this... The Product Owner reviews a small sample of email messages, and prior days edits to the wiki. Edits and comments from the 500 Account Managers and 27,000 users who use the PLM. Account Managers are at times representative of the collective desires of these 27,000 users. These users have compiled a wish list of 1,000 user stories of what they need and want in the PLM software. Although daunting, the solutions to each can be represented by making 15 major changes in the PLM. The Product Owner has been blogging about these 15 proposed changes, for a number of weeks. These changes are also passionately felt by many of the members in the CISP. As always, major changes in the software can be brought into production with one two-week sprint. The Project Owner has recruited a representative group of users from 12 producers to work with the developers during that sprint. The Product Owner sets tomorrow for the team to begin these developments. Suddenly she realizes it's 7:30 in the morning and she has to get ready to catch a flight to Europe for the bi-annual People, Ideas & Objects user conference...

A little creative license is handy. 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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Thursday, March 06, 2008

The Draft Petroleum Lease Marketplace Module.

Its out and can be downloaded from the old wiki site, or email me for a copy. I'll be moving on to the Accounting Voucher Module and Partnership Accounting Module draft specifications.

Two areas I thought would be interesting to see get built are a capital budgeting component for each Joint Operating Committee (JOC). Where I draw the analogy to the new Google Health system. A system where individual privacy concerns are upheld. Yet there is some real value in the aggregated data. Particularly from a research point of view. I suggested that if each JOC can agree to a 3 - 5 year capital budget / plan. Then when the information is aggregated across the entire industry. And that information is presented to the vendors, through a Google Earth type of interface. Then we would see the innovative ways that the vendor marketplace could begin to provide those products and services to the producers.

The other area that is of interest is the live nature of the agreements paragraphs. As each agreement is negotiated certain terms and conditions are captured in the document, and, provide the underlying system with the data and algorithms that will be used in administering the agreement. An important point should also be made that these are just broad strokes of what the systems will need and want. The community now begins to add their input and the real innovation will be seen.

There are now two draft specifications that have been submitted to the community. The remaining 9 will be completed over the next year. Putting deadlines on the community, as it is just forming seems unreasonable so we will discuss these deadlines as things move along.

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Tuesday, April 10, 2007

Professor Langlois' Slides

I've been reviewing some of the material that I gathered when I was looking into Professor Richard N. Langlois' writings. Going slowing through the slides that he produced for his "Economics 486, The economics of organization" course reveals a number of very interesting nuggets. I can't technically recreate the slide, and I do recommend that everyone download and study this rather comprehensive and valuable information that Professor Langlois has included in the file. Slide number 21 deals with measurement costs. Recall that we are discussing the role of the firm and of markets. And the "production" costs are being handled by the market and the "transaction" costs help to define the firm. To give you a good understanding of the oil and gas application of Langlois' theories I would refer again to the table that I prepared.

Now as for slide number 21, is this just me cluing into something that is generally known or understood, or is this something more then than that? The text of the slide is as follows;
"Measurement Costs."
Here Langlois is noting that if the costs to measure and negotiate the terms of the transaction are too high, then the role of prices will be established by firms and not markets. Not a great description but I am trying to get to an obscure point here.
"Consumers seek attributes of goods, not goods themselves."
This is where the obscure point starts. If I said that I was to go grocery shopping, I would say that I was not just buying food, but I was buying high quality goods at reasonable prices that meet my discerning tastes. The key words being "high quality", "reasonable prices" and "meeting my tastes". I could go into a Safeway and buy what I want and I would be able to more then satisfy my needs using just those three specific attributes.
"Costly to measure attributes."
I can see how a grocer would need to determine his pricing. How much product does he get, Oranges are rare due to the crop freezing, the amount of wastage and spoilage incurred by the shipper and the customer, and finally what the store will cost in terms of overhead. This can't be calculated for each Orange and therefore depends on the market for the price determination. The point being that the ability to standardize the attributes would help to establish the market pricing. Note information is what the market provides the consumer, grocer, distributor and farmer, and that is the role of markets.
"Level of buyer sorting depends on variability of goods."
The buyer will have to deal with what is provided. If the quality or price is not to his liking then they will not buy it, and leave it for the next consumer. The market information being generated here by the buyer and seller is significant.
"Sellers may reduce variability to lower buyers' search costs."
If the Safeway were located in affluent neighborhoods it would be inappropriate to attempt to sell products that are of low quality or bargain pricing. The buyer may be minimally challenged by price and therefore will look to other attributes to choose. Again markets provide information, and if their costs to transact are too high, then the firm is the optimal choice. For oil and gas the important component to consider is the level of standards that support the market. These standards mitigate the costs of completing transactions.
"Net price goes down when excessive measurements reduced."
The grocer and the consumer will share their information indirectly through the pricing and purchasing of each individual Orange. This information is being communicated through the price, set by the market.

OK so we have travelled along way to state some pretty basic facts. And I will attempt to tie these points into what I am seeing.

Attributes of goods are what consumers seek, not the goods themselves. In a market where standard means and measures, glossaries of terms, default contract templates, like those in oil and gas are able to communicate, facilitate and support the markets ability to establish price and other information to the oil and gas producer purchasing / selling them. That is to say that the majority of the work that can and should be done within oil and gas ideally should be by the market. The oil and gas industry has established many of these market supporting components of standard etc. in the variety of non-profit and non-governmental organizations that make up the industry.

I am now taking a hard left turn, so try to stay with me. In databases the table is called entities, and the columns are named attributes. And that is consistent with the information that is stored in database. The "Oranges" table is made up of volume, price, grade etc (attributes). In XML (which is a key technology in discussing databases) "Elements, which are the building blocks of XML documents, are bounded by start tags and end tags that may hold content, or may consist of one empty-element tag," and, "Attributes are name-value pairs that may appear in a start-or empty-element tag." Confused, don't be. Simply XML here is being used to portray the information contained within the database, which uses standards, and for the purposes of communication of those elements to the data user.

Thanks for keeping with me to this point, I hope its been worth your while. Here is what I am thinking that may be my new epiphany, and I hope it is for most people, and not just me.

If we, as I have suggested in my table that I noted earlier, wanted to move to a market orientation, according to these facts as I have laid them out, we could establish a functional market for those areas that are under the domain and administration of the joint operating committee. There is only the need to build this according to this "theory" we have all the parts and pieces that will make the JOC function as we expected it to do.

Going back to the proposed development, and particularly the Petroleum Lease Marketplace, the critical data attributes that are available and can be queried and searched. These data elements are well developed, what is needed now is to create the virtual Petroleum Lease Marketplace I have proposed here. Imagine for a second that you were trying to secure the petroleum lease rights in an area that you believed through geological mapping and seismic to be of particular value in a zone of your specialty. By reviewing the PLM you would be able to find out what was available, with whom, for how long. Or you would then be able to post the land and prepare for a bidding based on new reserves valuations and pricing. A PLM being a virtual marketplace of Leases, partnerships, joint ventures and farm-in/out, companies that want to do business, and companies that may want to sell their interest. All within a virtual environment that is search-able and leads to the necessary transaction processing that will eventually become the producing field. And here is my epiphany, because the marketplace can be supported in this manner.

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