2010 Budget and Planning

As promised the 2010 Budget and Plans are set. This post will highlight the aspects of "what" and "how" this is being undertaken. Further discussion is encouraged by contacting me by email or the "Call Me" feature on the bottom left column of this blog.

First off is the objectives for 2010. Completion of the Preliminary Specification was mentioned yesterday. The Preliminary Specification is a collaboration of the end user community. It's cost is based on 100 "People" years of effort and will determine two key components; the scope of the application modules and the detailed analysis of the oil and gas business in a comprehensive, codified manner. The two constraints placed on this development are they must use the Draft Specification as it's starting point and be focused exclusively on the business of oil and gas. Technology is not part of this specifications deliverable. The only technological requirement will be the generation of stories in line with the agile manifesto.

We seek to capture the ways and means of the optimal innovative oil and gas producer in the Preliminary Specification. The understanding of the industry is beyond the scope of a handful of contributors and involves multiple disciplines. The collaborative output of the Preliminary Specification will be well beyond the scope of one individuals understanding of the industry. Therefore clarification and compromise will be a necessary and difficult part of the process. Using advanced business techniques focused on the conflicts and contradictions that arise, the output will resolve many of the issues within the industry and its application to the Draft Specification. This is a business design process that will involve literally everyone and anyone with experience and understanding of the oil and gas industry. More specifically it is a place where people can contribute their ideas and build their own service based offering in support of the innovative oil and gas producer and users of the developing People, Ideas & Objects software.

Contributors to the Preliminary Specification are invited to join this development through this process. Users will be compensated for their contributions. I have allocated an average $125.00 U.S. / hour for user contributions. Each of the 100 People years is determined on an eight hour day and 220 days per year. 30% of the $10 million budget is allocated to users. The total population of users may possibly number in the thousands of individuals. This will not be a full time task for any of users, and it is anticipated that no one would be required to leave their current positions in order to contribute to these developments. Subscribing producers are encouraged to second their human resources to this process in order to ensure their unique business needs are met by the Community of Independent Service Providers and the software itself.

Additional financial resources are budgeted in the support of this developing community. Maintenance of the private wiki where these postings will reside, in addition to the multitude of other support requirements; requires we allocate an equal amount of resources to support the community. The remaining 40% of our budget is allocated to overhead, organizational development, preparation & testing of the technological architecture, and the software configurations themselves.

As indicated the time frame for completion of this critical community development and specification delivery is the end of the 2010 calendar year. The determination that 100 People years is adequate is a judgment call made based on my experience and understanding of the oil and gas industry. I anticipate that towards the end of 2010 we may be consuming as much as one People year with each day of development.

As always, please join us here.

Technorati Tags: People's Budget Preliminary Specification

Professor Paul Romer, Endogenous Technical Change

We are in the middle of a comprehensive review of Professor's Carliss Baldwin and Eric von Hipple new working paper "Modelling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation". In the last post we learned that innovation within the community of People, Ideas & Objects is considered "a non-rival good: each participant in a collaborative effort gets the value of the whole design, but incurs only a fraction of the design cost." Music to my ears and a definitive benefit when a user considers their potential involvement in this community.

In a related document, Professor Paul Romer's October 1990 "Endogenous Technical Change"  discusses the impact of these non-rival goods impact on economic growth.

Growth in this model is driven by technological change that arises from international investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input it that it is neither a conventional good nor a public good; it is a non-rival, partiallyexcludable good.

These non-rival goods are being codified in the Draft Specification and developed by this community in the Preliminary Specification. The community will also develop their value adding service offerings, to be used with the People, Ideas & Objects software applications they've developed, in providing their producer clients with the most profitable means of oil and gas operations. I'd like to see Oracle compete with that.

What I want to highlight is Professor Romer's note that mankind's progress was constrained for a long period of time. Not until we were able to rise above the grind of working for our basic needs did we move forward.

This result offers one possible way to explain the wide variation in growth rates observed among countries and the fact that in some countries growth in income percapita has been close to zero. This explanation is reminiscent of the explanation for the absence of growth in prehistoric time that is offered by some historians and anthropologists: civilization, and hence growth, could not begin until human capital could be spared from the production of goods for immediate consumption.

Taken in this context it is clear to me that the community and these software applications have the capacity to significantly increase the productivity of the oil and gas producer. Our way of economic organizations have brought us to the point where we are today. To move forward in the future we need to revisit the ways in which we conduct business. And that is my desire for the oil and gas industry with this blog, software and communities development. What Romer has to state on this point is clearly beneficial for all concerned.

The most interesting positive implication of the model is that an economy with a large stock of human capital will experience faster growth. This finding suggests that free international trade can act to speed up growth. It also suggests a way to understand what it is about developed economies in the twentieth century that permitted rates of growth of income percapita that are unprecedented in history.

We stand on the shoulders of giants and begin a process of such great potential. Please join me here in 2010.

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Data and the Military

People, Ideas & Objects have define a Technical Vision that identifies and works to mitigate a technical issue that all areas of society need to address. The issue is the ballooning of data. Noted in National Defence Magazine an article entitled "Military Swimming in Sensors and Drowing in Data" it is stated “The appetite never seems to slow down.” As the energy industry is mostly based on the science of physics, chemistry and biology, it is believed this data growth will fuel innovative use and application in the industry. Those firms that have the capacity and ability to deal with this volume of data will have competitive and financial benefits arise from this capability, but only if this software development and community are funded.

The Community of Independent Service Providers and People, Ideas & Objects - Technical Vision suggests four cornerstone technologies enable this data explosion. At the same time, these technologies provide the ability to deal with the problem / opportunity. The four technologies are;

1. Object based technologies, and particularly Java.
2. Asynchronous Process Management.
3. IPv6
4. Wireless.

Further information on the Technical Vision can be found here.

Today's blog of Richard Fernandez notes this issue is affecting the U.S. Military. And of particular concern, is today's Wall Street Journal video of how Predator Drones have been monitored by insurgents. (If that specific URL doesn't work, search WSJ's video site for Predator Drones.) This issue of the Predator Drones is also noted in Fernandez's second blog post.

Some may note "This explosion of data has occurred for the better part of the last 40 years. Computers have always presented this difficulty and the energy industry will address this problem as it has before." I hope not, because the volume of data and the ability to use that data are something that will have to be purpose built and dynamic. What can be monitored can also be controlled.

People, Ideas & Objects has listed this Technical Vision as the manner in which this community will approach the problem. By exploiting the advantages and having the commercial benefits accrue to those that have a handle on them, I think, will be the difference between success and failure in the oil and gas industry. Critical to the success of the oil and gas producer will be this change oriented and innovation supporting community and application.

The Draft Specification considers a scenario where the use of this type of data and the ability to manage it is possible in a fundamentally more profitable way. The example is the manner in which energy prices can dictate, on a pre-determined and agreed too basis, at what price level would trigger the production was scaled back. If prices were to drop a predetermined percentage, then the production would be autonomously scaled back by X%. And these decisions could be executed on an iterative basis to fully exploit the reserves of the specific Joint Operating Committee (JOC).

These are business decisions that can be made by the Joint Operating Committee as it holds the legal and operational decision making control of the reserves underlying the property in question. (And something today's bureaucracies can not even begin to consider.) If the JOC has the authority, and the legal agreements consider this opportunity, then the industry can move from a price-taker to a price-maker position. This last point should be coming more evident as a necessity in the industry. Leaving everything to produce at 100% and then watch the prices drop year after year must get a little tiring. Only a fool would continue to sell his resources at a price less then its cost. And in an escalating cost environment, we have many managers who know they do not have the tools to deal with this problem, and yet will not support this software development project and associated community.

If it is generally agreed by the producers that an additional $20 trillion will be spent on oil and gas operations in the next 20 years. I would suggest the producers attain these types of capabilities so that they can prove to their shareholders they have the capabilities to address these difficulties and profit from them. Or is it really assumed that the bureaucracies can exist in that prospective environment, and provide returns to those outside of their own management team. Please join me here.

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More on the Preliminary Specification

The Draft Specification provides the overall vision of how these systems will be built and operate in the oil and gas industry. The Preliminary Specification uses the overall vision of the Draft Specification and puts much of the greater needs or details of each individual job in the oil and gas industry. Answering many of the what and how questions of the things that need to be done. This is a very large group of people that together hold the full scope of understanding of the industry. I am of the belief the Preliminary Specification will require several hundred people to develop a strong skeleton of the systems needs.

It is also this large group of people that will become the core of the Community of Independent Service Providers offerings. Providing leadership for both the Preliminary Specification and forming the core service offerings to support the producers in the future.

The role of the producers is critical at this point. Critical from the point of their specific needs. Participation helps to make the solution appropriate for their needs not only from a process and functionality point of view. But also getting involved at the beginning will help them form the service process relationships and fully integrate their firm's needs in the software. This is one of the critical areas of the quality that will eventually be reflected by this community and its software offering. Why the oil and gas companies continue to belittle the process and withhold their participation is beyond me. That however, is their problem as we can do this without the producers active involvement. They are critical for their individual needs, not the systems development.

Although I have detailed some of the technologies that are being used in this project. These technologies are not critical to the Preliminary Specification. In fact I want to eliminate any and all discussion of technology. It's not important and would be an impediment to the creative process that we are involved in. Using the Joint Operating Committee as the key organizational construct requires this blank slate approach. It has been the basis of how this design started, and as a result, will remain the key value of how this community provides the long term value to their client producers.

The deliverables from the Preliminary Specification will have a defined project scope. As a result, in subsequent phases of development we should not have any scope creep. Another key deliverable will be the development of the stories that communicate the systems needs to the developers. The last deliverable that I want to mention today will be how the CISP are able to take this design and integrate the software, through their service operation.

This sounds fairly ambitious, particularly from the point of view of the numbers of people. I would point out in my defense the name People, Ideas & Objects considers this. Also I would point out the spread of ideas to date. The Draft Specification has had over 1,500 people read Part I, and over 700 people read Part II. Think about that from the point of view of people having to spend a few hours reading this. If we draw a few hundred people out of this community, that have been reading and thinking about this system design, thinking about their involvement, bringing their ideas, and thinking how they can build a service offering to provide the producers with the most profitable means of oil and gas operation...

People are driving these changes, and their doing it from a business point of view. Trust me when I say that the developers will be able to accommodate any design that comes out of the Preliminary Specification. I guarantee it, therefore focusing on technology is a distraction. For the past 40 years it has been the technology that has driven the focus of oil and gas systems. The technologies and the compliance frameworks have made the oil and gas company about as foreign to the JOC as is possible to conceive. We are moving the focus away from technology to focus on the most profitable means of oil and gas operations.

In a world where the oil and gas producer will need to make more decisions based on ideas derived from the earth sciences and engineering basis of the business. A world where decisions are based on the legal and financial foundations of the participants of a JOC. The Community of Independent Service Providers and Users will capture this in the Preliminary Specification. Creating a system and organization that are representative of the underlying meeting of the minds of the producers involved. Please join me here.

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From Draft to Preliminary

I published the Draft Specification last year and we now move on to the Preliminary Specification. The Draft was developed to codify the research and ensure that a system based on its specification would identify and support the innovative producer. The Preliminary Specification has many objectives but the most important factor is the User will be who will work to define the requirements.

This is the point where the User begins the task of defining what the requirements of the application are. It is also the point where I will no longer have any influence in the makeup of the application. That's the point, one person could do this work if they were able to live to the age of 4,000 years. The scope of the application, as defined, covers the administration and management of the producer. From accounting, legal, land, capital and operational expenditures the entire firm is operated by the People, Ideas & Objects application. Just as SAP is used throughout the company.

The Partnership Accounting Module brings in an additional expansion of the scope by including all global jurisdictions as requirements. If a producer is to operate within all possible areas of oil and gas operations they will need to handle the currency, partners jurisdiction and accounting regulation requirements. Joint Operating Committee's are used throughout the world. Their operations command that the application accommodates operations in any area of the world, with partners who reside in any jurisdiction of the world.

Sounds simple doesn't it. Defining the scope is one of the difficult jobs to be determined in the Preliminary Specification. The compromises, the tough decisions will need to be made by the Users during their development of the specification. That is why the Users are compensated for these contributions and use the knowledge learned to develop their own service based offering as part of the Community of Independent Service Providers.

The Users defined scope will also be dictated by the producers that are involved in funding this project. If a producer firm requires heavy oil operations, natural gas or conventional oil. If they need certain geographically or regional coverage or SEC, SEBI, China Securities Regulatory Commission or Britain's Securities and Investments Board. Or needs to pay Texas, U.S. Alberta or Yemen royalties. A producer that does not include their operations at this critical point in time, can not have the application they need, or the Users that are intimately knowledgeable of their needs. There is much at risk as we transition from the Draft to Preliminary Specifications.

The overwhelming level of the scope of People, Ideas & Objects functionality and process management are daunting. Spooky might be the more operative word. I have been working on this project for over six years and I will continue to work to make this application real. Its that passion thing. Much of what I thought was going to happen in the Preliminary Research Report has come about. The time is now to begin this critical next step of the Preliminary Specification.

The community that reads this blog is large and is waiting along side me. Waiting for the producers to begin funding the Preliminary Specification. Their funding which is needed to ensure it contains what they require in terms of their operations. Please join me here.

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Another step closer.

We live in a world where the communicative ability of each individual is, for lack of a better word, unlimited. What I can do with the technology available to me is truely remarkable. Voice, text and video are all being captured, transmitted, and understood by their recipients. What are they talking about, ideas. It use to be that if you wanted to make a personal phone call at work, use of the telephone for non business purposes was not permitted. As ridiculous as that sounds, and it is ridiculous, it is not too different today. The majority of use of the computer at work is limited to the business areas that you are involved in. Browse to a "not approved" site and you could be called on it. This doesn't turn us into the nanny state, it gives the IT Manager something to do.

What we are doing is spending upwards of two to two and half hours a day to travel downtown to use the computer at the office. Not to much difference to the way that phones used to be regulated. Why wake up to spend all that traveling time for your managers mandatory attendance. When you can be productive as soon as you make a cup of coffee. It doesn't make to much sense other then the ability to so, doesn't exist, because the bureaucracy is unable to change.

The BBC is reporting today that Wifi, which is a cornerstone of the People, Ideas & Objects Technical Vision, is going through another specification called Wifi Direct. Enabling point to point network creation. 

It will let wi-fi devices like phones and laptops connect to one another without joining a traditional network.

The future that I see, and the one the Technical Vision provides, is that people will work in much the same way they are communicating today. Gripes that people were concerned with of working, where ever and when ever, big brother watching, or never get a moments rest, have been replaced with the freedom of not being at the behest of the phone ringing, somewhere they are not. With video being recorded of your every move the belief was this would be an invasion of privacy. These concerns are mitigated by the knowledge that you are being recorded, and the freedom these devices otherwise provide.

People, Ideas & Objects would extend these freedoms to having the opportunity to do your work in the future in the same manner that you live your life today. One in which you the User has a direct influence on. If data security is really the concern of the management then they had better get on board with this software development project. The issue I see is that the bureaucracy doesn't want to give up control of the access to the data.

In the past, many times I would think there is a better way to do the job I was tasked with. Many times I thought this would be so much easier if I could get a new report, or other information to make the job easier. This was easier to do twenty years ago then it is today. How many times have users thought that If I had the authority and access to the data and developers, I could make this job much easier or more timely. People, Ideas & Objects is the opportunity to have these types of interactions available to the users. Please join me here.

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As the Sun sets...

We bid adieu to Sun Microsystems and recognize the Draft Specification is now one year of age.  I can say with out much reservation that it has, and will be, the most difficult thing that I have done in my life. Taking better then a year to write and the result of seven years of university and thirty years of experience in oil and gas, at 50 you know there is not that much gas left in the tank. My father always said that your 40's are the time in which you can do anything. Your are mentally, physically, spiritually and intellectually at your life's peak, and I feel that is the case with me. After a little more then a year since publication, this past year has been more about recovery and recharge then anything else.

I look back on the 17 years in which I started working to develop oil and gas systems; with amazement that I was able to get the job done. For much of that time I was driven to do something that I did not know specifically what it was. Searching and hunting for something to satisfy an unknown. When I originally saw what it was that I could do, it was May 1992. In a flash the idea came to me and I was driven to make it real. 

For many of those days it seemed to me like I was locked in a darken room where I needed to find the exit. Being constantly reminded of the obstacles, dangers and pressures which frustrated the journey. I needed to find the way for those that would follow. Rising above the day to day grind never made any sense. The counter intuitive and seemingly destructive decisions to pursue this project alienated and confused most. But I always knew whatever the result I was reaching for, I could achieve that vision of so many years before. 

Today I look back on these times as the best part of my life. The struggle is the prize and this journey has produced a new "way" for the oil and gas industry. I am pleased with the results of this effort and will continue to make the project real. Writing here about the compelling reasons why the industry should adopt the Draft Specification. Recruiting the people needed to take it to the next level. And joining those people who will solve the problems we face in meeting the demands for energy. 

For people who have similar feelings and opportunities. Those with the desire to do something that they know is above and beyond them. Preparation is the difference between success and failure. It is academic whether you will do it or not. You really have no choice. I think preparation needs two very important ingredients. A Master's level education will help in defining and building the many contradiction and conflicts that arise. Secondly a physical depth brought about by high levels of competition in sports. Your system will be taxed and the stress will kill you. I've suffered 4 bouts of Pneumonia in the past 6 years and I know that if I was not as fit as I once was when I went into this process, let's just say the stress is super human. But more importantly the physical competition shows you that there is nothing but your mind that limits your potential. 

I am honored to lead this project. I am rested and fully recovered and look forward to the next 17 years. When we look at what has been done and compare it to what needs to be done, little has been achieved. I am reminded of Ray Kurzweil's Law of Accelerating Returns about how things get done. Very slowly at first, and then they pick up their own momentum. According to Google, 861 people have looked at the Draft Specification. When we think that People, Ideas & Objects is about obscure oil and gas ERP systems, I think this number shows these ideas have a community of like minded people. Please join us here. 

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Google O/S and NeatX

This announcement almost went under the radar. Sometimes the complexity of the technologies make it difficult to see the whole picture. Information about Google's recently announced Operating System (Google Chrome) received significant attention, not so for Neatx. Which is interesting because the two applications combine to introduce a new product architecture. I'll leave it to the MSM to provide the information on the O/S. Neatx is the real jewel in this new product / architectural offering. To me this product offering shows Google is serious about both the consumer and enterprise marketplace in terms of offerings.

We need to go back to the last two Google related posts I've written about. Google Wave is a revolutionary communication related product. The second technology I recently wrote about was Google Chrome (The Browser), their open source browser. Recall I thought that the technology would enable the user to have a constant browser experience available from any public or private terminal. 

In a networked world the users needs are unquantifiable. They can and will include every possible permutation and combination. The other known attribute of the users demands is that the volume of data and information will continue to grow exponentially. Having this environment available all the time and anywhere becomes a challenge for the technology. As I wrote about in the Google Chrome (Browser) post; the constant, consistent web browser interface, complete with all the users unique and authenticated access available by simply logging into the users account through a Google Chrome browser. 

This feature may not seem to be a strong feature to the average web consumer. However, in my opinion, from an enterprise point of view it is a necessity. The problem with this implementation is that it is relegated to the browser. If Cloud Computing does take off it will need a more robust operating environment in which to ensure its users and companies are able to rely upon. That is where Google Chrome the O/S and Google Neatx come in to play. 

Neatx is an open source product that Google has in development and will be offering. Based on the "old" X Windows architectural model of computing, Neatx leverages Google Chrome the O/S in ways noted in my Google Chrome (Browser) post. The difference is the level of security and control, unlimited application access, file systems, any and all compiler access, and the single sign on environment available anywhere on any machine. In other words the entire network capability, unlimited and unconstrained by any hardware, software or network related issue. The fact that Google is calling both the browser and the O/S "Chrome" is probably indicative of the disappearance of the "Browser" metaphor. And, this environment becoming systemic or embedded within the O/S with the classic Google / Apple ease of use. 

People, Ideas & Objects is founded on a Technical Vision that includes four cornerstone technologies. I see these technologies Java, Asynchronous Process Management, Wireless and IPv6 changing the technical landscape in the next few years. The scenario I see developing for Users of People, Ideas & Objects. (And yes this imputes that Google Chrome (the O/S) and Neatx will be added to the Draft Specification.) Is a User has at their disposal all manner of computing resources necessary to complete their work supporting the innovative oil and gas producer. Users making their clients the most profitable in terms of their commercial operations. 

Logging into their systems the User will have at their disposal the complete People, Ideas & Objects applications. Applications that they have influenced in terms of what they need and want from an ERP system. In addition, the software development capability that is a core competitive advantage of People, Ideas & Objects offerings. A software development capability where the applications will evolve based on User input. 

Once the user is logged in, they will be able to see their session presented just as it was when they last logged out. No matter what machine they have logged in from. From there they may be logged into a variety of network resources that provide the full scope of functionality needed to do their job. If they need a monthly report they like to run for their clients they can run it from any machine they may be on. The fact that it takes 15 hours of processing time is irrelevant to the Netbook they are using. Access to People, Ideas & Objects provides the processing power that will complete the 15 hour job in the next 15 seconds, and the User can continue to provide their producer client with the innovative and valuable report that they developed. This architecture is designed to provide a better understanding of the opportunities and issues the producers have at each Joint Operating Committee. 

Physical location will become irrelevant in this virtual environment. And due to the Asynchronous Process Management that is a cornerstone of the Technical Vision, time will be of less significance then it is today. Gone will be the pressures of deadlines and 9 to 5. In its place will be an active and innovative member of the Joint Operating Committee providing the commercial transaction processing, analysis and evaluation of the issues of that JOC. An individual who is trained in their craft of Geology, Engineering, Accounting or Administration and is proactive and innovative. 

In this scenario People, Ideas & Objects becomes more then just an application. And more the cornerstone of a loose grouping of modules that create the Users commercial environment. A commercial environment that provides the User with access to the People they need to do their job. An environment in which they apply their skills and earn their income. 

Please join us here in making this vision real. 

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Google's Wave

With Google Wave I think we have a clear direction where the future of Information Technology is headed. There is an hour and twenty minute video of the Google Developers Conference announcement of their Wave product. Although it is early, I do not see to many hurdles to having the product shipping. Clearly the technology is not the key attribute of the value of the Wave product, its the implementation.

Lets quickly dispatch the techno speak with this one paragraph. Wave is open source, Java and uses the Google Web Toolkit. (Renders browser based code from Java.) All within the technology stack used by People, Ideas & Objects. The one technology that is not available is the W3C's HTML 5. I do not foresee HTML 5 having too much difficulty in being implemented quickly. HTML 5 provides some persistent data storage which is provided by the able Google Gears in the product demonstration.

So why is Google Wave an important technology for users and producers of People, Ideas & Objects. I will be augmenting the Draft Specification to include the video and this text. If we go back through this blog and the ideas that were used to build the Draft Specification. We focus on three key areas and some minor additional points. The three key areas in descending order of relevance are the Accounting Voucher Module, Military Command & Control Metaphor and Security & Access Control Module.

Recall in the Accounting Voucher we are capturing the changes in the business on a month to month basis. As "things" happen they are captured and recorded in the Accounting Voucher for future use. If this isn't making any sense then please review the Accounting Voucher part of the Draft Specification to better understand what it is that I am saying. The accounting changes that are captured in the Voucher are the discussions, documents and decisions that are made. The Accounting Voucher is capturing and recording the financial impact of these changes. It is the Google Wave infrastructure that we inherit, by using its open source code, and enhance it to incorporate the ability to capture these financial changes.

As the video reflects, we acquire these in a unique interface provided by Google. Representatives of the various producers on the Joint Operating Committee (JOC) interact on the topics of interest in the JOC. These are in documents, asynchronous communication, synchronous communications and in all the media available. The mode of these interactions are person to person, person to process, process to person and process to process as I noted in the Preliminary Research Report. A rich environment that provides the media, mode and method of communications that are necessary to support the innovative oil and gas producer.

The Military Command & Control Metaphor is used throughout the Draft Specification as the means to provide the dynamic resources provided by the producer members of the JOC. Much as the pooling of military resources is done by the NATO forces, the People, Ideas & Objects application is able to dynamically assign the corporate governance, authority, role and responsibility necessary to efficiently and innovatively manage the Joint Account. This Metaphor is used throughout the application, but most importantly one that controls the interaction of the communication and documentation contained within the Google Wave open sourced code.

Lastly I want to reiterate the importance of the Security & Access Control Modules use of Sun Microsystems Federated Identity software as the means to ensure these corporate governance needs are maintained in such a dynamic manner. I would encourage readers to spend some time in these elements of the People, Ideas & Objects application. It is an area that I think the innovation could and will prosper and is ripe for the users to exploit for their advantage; and please join us here.

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Changes at Shell.

A number of articles are appearing about the announced changes at Shell. A new CEO Peter Voser takes over July 1, 2009 and has announced a major overhaul of the firms operations. Fox notes:

Oil giant Royal Dutch Shell on Wednesday announced a series of changes to senior management roles and responsibilities, which it said were aimed at creating a sharper focus on operating performance and technology.

I interpret these changes as an admission that the engineering and earth sciences necessary for each barrel of oil produced are increasing. The Calgary Herald reported that Voser said:

"Organisationally, we are too complex, and our culture is still too consensus-oriented. Our costs are simply too high," Voser said in an email to staff, excerpts of which were seen by Reuters.

Details of the changes include the consolidation of divisions into operating units around geographical locations. North America being one in which I would assume Houston will take the lead role in. It is also reported that many lay offs will occur throughout the company. 

The Calgary Herald notes many of the differences between Shell, Exxon and BP's announced reorganizations. These are all ongoing and reflect different characteristics and management styles. 

Exxon is renowned within the industry for its strict management practices and insisting employees do not deviate from standard operating procedures. BP, on the other hand, had a risk-taking culture that allowed considerable freedom to managers of units or fields, and Shell had a culture of making decisions by consensus.

What does People, Ideas & Objects offer firms such as Shell, Exxon and BP.

• The Preliminary Research Report provides:
  
• A focus on the expanding earth science and engineering demands of each barrel of oil.
• A focus on innovation and its iterative impact on science. 
• How a firm can adopt an innovative footing.
• A greater focus on the business of the business through the five frameworks of the Joint Operating Committee.
• Providing the innovative footing and science based strategy.
• The legal, financial, operational decision making, communication and cultural frameworks of the industry. 
• A global dedicated oil and gas software development capability.
  
• Unconstrained by the paradox of code and customers. 
• Draft Specification.
• Eleven modules based on the research contained in the Preliminary and Final Research Reports.
• Firm focused application modules.
• Compliance & Governance 
• Research & Capabilities 
• Analytics & Statistics 
• Marketplace focused application modules.
• Petroleum Lease Marketplace 
• Resource Marketplace 
• Financial Marketplace 
• Joint Operating Committee application modules.
• Knowledge & Learning 
• Performance Evaluation 
• Accounting application modules.
• Accounting Voucher 
• Partnership Accounting 
• Generic
• Security & Access Control 

It's interesting the three methods that are used by Exxon (Strict Management Practices), Shell (Consensus) and BP (Risk Oriented.) Neither of these management practices or strategies are precluded in the People, Ideas & Objects. It is very clear that a unique strategic identity is enabled in each producer through this system. This also does not preclude a strong governance structure. With the reduction of the hierarchy an alternate form is required and one has been developed. That is the Military Command & Control Metaphor used within the Joint Operating Committee affording the pooling of resources and reducing the redundant capabilities built within each silo'd oil and gas firm. 

Lastly I would point to how this project is a commercially viable one by pointing out the business model of People, Ideas & Objects and the Community of Independent Service Providers. And the Technical Vision  of where the Information Technologies promise the greatest value and how this product is supported technically. 

These firms are a part of the global oil and gas industry and therefore part of the focus of this development. I encourage you to forward this post to the people you know at Shell, Exxon or BP and have them read for themselves what is possible. I would also encourage you to get involved in moving this vision forward by joining in this process. 

Technorati Tags: People's Capabilities Changes Engineering Geology Governance Specification

What's expected.

It's important that I revisit the status of the project now and then for a quick update. Particularly for those that may have joined recently. As of today the Draft Specification has been reviewed by over 500 people. I consider this quite remarkable considering the topic of discussion, oil and gas systems is rather obscure. We are now just past 9 months from the point in time that I published the specification and the ideas inherent within are being broadcast across a very large community.

The scope of the People, Ideas & Objects application is truly global. Through LinkedIn I have been able to discover many like minded people that may be recruited to define the Preliminary Specification. This recruitment will continue for the remainder of 2009 with the objective of securing the 100 people necessary to make the Preliminary Specification as diverse and well documented as possible. 

Therefore effective January 1, 2010 we will be in full development of the application. I now want to detail some aspects of the budget and reiterate my involvement in the definition of the software from this point forward. I have no intention or capacity to further details the scope, functionality or anything to do with the application. This project is well beyond the ability of one person to comprehend each and every aspect of the oil and gas industry. This is a collaborative project for the simple reason that it must be. It is far better for me to step aside in terms of what can and will be done by the application and its modules. The application will be left to the community to determine the ways and means that their input is necessary and required. 

The key role that I can provide is the generation and distribution of the resources necessary to keep the development moving forward. That is a task that will be more then enough for any one individual, and one that can determine the success or failure of the entire project. The budget for this project is declining as the costs in the industry become more affordable through the lack of demand. How long this will last is probably short lived. Primarily as I think the lack of either equity or debt to fuel the producers efforts will be replaced through the reallocation of the market prices to fund these desperately needed energy resources. Therefore I am hesitant to suggest that the project will require less resources than what is originally estimated. That being in the area of $1 billion U.S.

In order to define this project I have detailed four stages of the specification. I completed the Draft Specification last July 2008. The Preliminary is set to start at the end of the 2009, with the Detailed and Final Specification to be determined by the community of users that is forming. The total costs associated with these phases of the specifications will be set at 10% of the total budget. Therefore $100 million will need to be raised to support these activities. 

This application is unique in that using the Joint Operating Committee (JOC) necessitates the global scope of functionality of the application. Hence the large nature of the project. Something of this scope is only possible during a time when organizational and business models are being revised through economic changes. Of the $100 million allocated to determine the specification, $30 million will be allocated to the Preliminary phase.

I expect to have at least 100 people involved in defining the Preliminary Specification. Participants should expect to incur approximately 500 hours on average. That is a total of 50,000 man hours that I am now setting the compensation for at $125 / hour or $1,000 / day. This work can be undertaken as soon as we have the financial resources established. 

I know these numbers are frighteningly large. The justification for these costs is based on reviewing the Draft Specification and the unique nature of using the Joint Operating Committee. Review of the business model of People, Ideas & Objects will show how this development is truly the most cost effective and appropriate means to continue. 

Our two defined groups of financial support are the governments involved in collecting royalties and the producers themselves. As this is an industry wide approach, we see these large costs allocated over the involvement of the government and industry. Making this a cost efffective solution. What I think is also paramount to consider. Is that this is the first and only user based development. It is the oil and gas users that know how to do there jobs that make up the community in the Preliminary Specification. 

The only deliverables that I have set for the Preliminary Specification is the determination of the geographical scope and functionality of the application. Other then these, the entire process of development is being handed over to the community through the Preliminary Specification. Please join me here.

Technorati Tags: People's Specification Development Users Collaboration

Follow on to yesterday's post.

Google's new tool, the Google Insights for Search was highlighted yesterday. I was thinking all through the day what a tool like that would be like in the oil and gas industry. I felt as a result, I didn't attach enough emphasis on the implications of having the data available for the type of analysis that is available with the tools I described in the Draft Specification .

First lets go back to the situation at hand today. Data is scattered throughout the organization in a number of informal and unknown spreadsheets, databases and file cabinets. Their are production departments, accounting departments and exploration departments that use very similar data and store this data in their own file cabinets and electronically. As we know departments only speak to each other at the higher levels of the organizations. Hence the lack of communication and shared data remains an unfulfilled promise.

A lot of this data is not structured or captured in a centralized database. The advantage of using a database is that it allows different users to perceive the data in different ways. Much of this problem has been addressed by the various POSC and PPDM data models. However, not many of the software vendors or companies have been able to implement the data models in the optimal way. Consider also that polymorphic behavior which is a cornerstone of the Java Programming Language. Allows users to perceive different methods or ways of processing the data. You begin to see the flexibility and opportunity that is missing with these poor data implementations.

When we talk about the Security & Access Control Module in the People, Ideas & Objects we begin to see the importance of getting all of this data organized and accessible by the right people.

Imagine what it would be like if People were able to access the same data in the same format for the entire Joint Operating Committee. And this would apply to the entire industry. Where the employees and contractors that are authorized access to the data are all trained in the generic industry data models. Everyone would know where the data they need is, and would be able to access it from their clients in an authorized fashion and analyse it effectively for new information.

Lastly, the Technical Vision of People, ideas & Objects. Essentially laying out for the means to have an explosion of data in every corner of the producer's domain. This is not as a result of the application being built, this data will become real on its own. The tools to make it so are now readily available and a matter of time before its generally available. If the data is not organized today, when and how will it be organized in the future with exponentially more data, risk and complexity.

Technorati Tags: People's Data PPDM Specification Security

The Internet @ twenty.

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

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

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

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

Technorati Tags: People's Data Science Specification

Security in the Draft Specification

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

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

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

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

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

Technorati Tags: People's Specification Sun Security

"Content will find you."

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

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

Then from the back of my mind I remember the comment made by Cisco CEO John Chambers that "Content will find you." Interesting, I certainly have content. From the original idea of using the Joint Operating Committee (JOC) to the detailed Draft Specification which I think lays out a pretty clear vision of the significance of moving to the JOC. Content we have, therefore we have to actively go looking for the users. Chambers exact quote is as follows .

People talk about devices... but we think it's about the network. It will move from a generation about data and voice, more to visual networking, wired and wireless. We think the key content will find you, and we see changing business models reflecting this.

I think he is right. And indeed we have to switch gears in order to begin the task of getting the people necessary for this critical next step of defining the Preliminary Specification and building the Community of Independent Service Providers.

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

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

After less then a week of using it, clearly LinkedIn is the "Network" tool that will enable the Community of Independent Service Providers and their collaborative efforts in defining the Preliminary Specification. With over 376,281 users that have classified themselves as in the Oil & Energy industry classification, sourcing 100 people should be possible, if not easy. If you have not used LinkedIn I highly recommend you sign in. The people that are on LinkedIn are more of a senior level in organizations and it is not a social network per se. Oh and the reason that its so valuable is that people who are using it are paying a monthly fee to access the service.

"Content will find you" is a valid concept and one that will be applied in this development. So as opposed to just saying join me here, I'll also being saying I'm looking to find you. Here is my LinkedIn profile.

Technorati Tags: People's Community Preliminary Specification

The three Applications of the Preliminary Specification.

I thought that I would mention the design of the three applications that will house the modules of the Preliminary Specification. These three Applications have been determined to be the applications that the users, the producers and the Joint Operating Committee's will access. Essentially different views of the data, different views of the modules and different application processing contained within each Application. Each Application will contain different perspectives of the different modules as defined in the recently completed Draft Specification.

This work of identifying the Applications needs to be done in the Preliminary Specification and is a critical part of the People, Ideas & Objects deliverables. I have left the design and development of these modules to the greater community, as it is the community who will be best able to design these applications. The remaining work that needs to be done is too comprehensive for one individual to comprehend, understand and implement. Recall the budget, which has not been finalized, may contain the B, as in Billion dollars of development costs.

My role, as I have mentioned before, is to remove myself from any further design and development of the applications and modules. This is for my own sanity and the fact that I could really end up getting in the way with a number of my own preconceived notions that don't have any bearing on the performance of the innovative oil and gas producers. I have committed myself to ensuring that the resources and needs of the community are provided for the business end of these software developments.

I have a sense, and I have not done any research in this area, that the design and implementation of these applications will need to have significant research and development of new and unknown attributes. Just identifying what these attributes are will be a difficult and exciting area of research. I am calling for 100 individuals to participate in the Preliminary Specification. Researching the Applications will be a critical area where I suspect much value can be added. Please, join me here.

Technorati Tags: People's Specification Community Development

The next 30 years.

I frequently watch the video's from FORA.tv for the surprisingly good content contained on that website. Think of it as the YouTube for the thinking. It is a compilation of videos from a 115 governments, institutions, universities, and leading publications. One can be lost in the sites content for weeks.

I was watching an Australian Broadcast Corporation (ABC) broadcast of Rupert Murdoch, Chairman and Chief Executive Officer of News Corporation. His Boyer Lecture entitled "A Golden Age of Freedom." During the broadcast he states in the next 30 years the world will welcome an additional 2 - 3 billion people joining the ranks of the middle class.

I am an optimist, although my recent rants on the economy may make it seem that I am pessimistic, I can assure you that there is nothing further from the truth. As I mentioned yesterday, the future holds new disciplines, new opportunities, new ways of organizing and living in a far better world with a much higher quality and quantity of life.

I leave you with the thought as to what the world will be like in 30 years. With a design of the People, Ideas & Objects Application and Modules fully operational in the marketplace for many decades, how the energy industry will have developed. The work that is being done in physics, nanotechnology, computer sciences, bio-chemistry, robotics, space and many other areas. Conducted on a global basis with the greatest possible number of people living a middle class lifestyle.

Our one impediment to making this happen is the ways and means of how we have achieved what we have to date. The bureaucracy or its more antiseptic name the structured hierarchy is the reason we are being held back. Change is violent and upsets too many things to be undertaken in a constructive manner. We know we should have moved away from the bureaucracies many years ago. The reason that we didn't is that bureaucracies still provided enough value as to not attract the necessary attention to there inefficiencies.

Now we have entered a time in our lives where everything happens so quickly. Our organizations, which can not accommodate any change, especially at today's pace of change are failing. Failure is what eventually happens, and we see that failure happening in business today. And we should welcome this change and move to the new forms of organization that will optimize the next 30 years. Please join me here in designing and developing these applications.

Technorati Tags: People's Specification Market Failure Change

Why at $3.27 it's a buy.

Sun Microsystem stock at today's prices represents the easiest and most cost effective manner in which to make money. At $2.42 billion (Friday November market cap, the company is trading below its cash value. And this post is to show how far they are ahead in providing the types of services applications such as People, Ideas & Objects need.

I have specified an architecture of Sun technologies for the People, Ideas & Objects applications to be run in. (See the July 2008 post here.) Sun has published a white paper that captures the extensibility and flexibility of their products in terms of how the can be configured. For those that are technically challenged I would skip this post now.

Downloading the .pdf is available to those with a Sun account. The configuration discussion talks about the performance and configuration advantages available for the deployment of GlassFish on Solaris. Making the post I made in July 2008 look like the optimal solution that Sun has to offer. This is why Sun will make money in the software future. No other vendor can provide our application with the support and low licence costs. Running GlassFish in some of the configurations using IBM and Oracle would be prohibitively expensive. Not so with Sun.

So their choice was to ensure the developer and user of their software services were able to operate their technologies in the optimal configuration without first having to bankrupt them. Taking the hit in current revenues for the long term. In today's myopic market of this quarter Sun doesn't fit in. In this go forward environment Sun and Apple are the only two companies that I can see making money in the future on technology.

The only change that I would make to the blog post in July is the need to build our own data centres. Using network.com provides us with the resources of a service based offering of processors and support. Processing is too critical a resource not to be under our influence and control. With the majority of the support for our data centers remaining with Sun.

Technorati Tags: People's Sun Software Specification

Times like these calls for...

In most business' the amount that management sell their products at is higher then its costs. In oil and gas we would only dream of such a concept as price management. In the Draft Specification I have included a price management capability on a fully automated basis.

The problem comes down to the designation of one producer as the operator. The operator has every motivation to keep the wells and fields producing to their fullest extent at all times. This is as a result of beliefs of competitive drainage, and the bank expecting their investment to perform. The fact of the matter is that the operator does not have the authority to shut in any production without the consent of the partners.

Recall that today, the Joint Operating Committee (JOC) meets on a relatively infrequent time frame and the majority of the reporting is standard fare statements and data. Any production volume reduction is not possible without the consent of the producers who hold x% as determined in the Operating Procedure.

Fast forward now to the day in which the People, Ideas & Objects system has been built and is commercially available. It is fair to assume that the volatility in the commodity prices remain and the variance in price is in the realm of + / - 20%, and somewhat determined by political factors and seasonality. This would make the majority of the production either very profitable, marginal or create a loss situation.

With the People, Ideas & Objects system we will have the ability to calculate the costs on a "live basis" based on the contributions of the partners involved in the JOC. This is the key change factor that enables the producers to use an algorithm to move production up or down based on the commodity prices and the actual costs of the operation. If at any time the required percentage of voting partners determine that the costs exceed the price received, production would be scaled back to 50% of the flow rate. If the loss exceeds 10% then another 50% of production would be reduced to the point where the production could be scaled back to the level that the partnership are satisfied the optimal reserves production and prices are optimized.

These operations are dependent on one factor, the collective decision of the producers representing the JOC. This is the type of capability that would be made available in People, Ideas & Objects. The standard bureaucracy can not make the decisions in fast enough time frames to make the decision valid. By the time the decision would be made, the prices may have risen dramatically just at the time the wells were being choked back.

After the decision from the JOC has been made. And this decision is based on the producers vote and desire to optimize the value of the reserves. This decision is therefore somewhat automatic in that each producer will be able to input their specific criteria that they would expect the changes in production to occur. The commodity prices fall below what the calculated actual costs are and if the production became marginal, the wells production would be reduced to the 50% I am using in this example. The prices subsequently, because their is a lack of production available for the consumer, increase and then the well can increase its production on any increment the JOC may have deemed appropriate for the reserves and their cost factors.

The ability to calculate the costs, determine the market prices, and the ability to slow the rate of production through telemetry. Are the technologies that are being implemented in this application. Please review the Technical Vision and specifically the IPv6 component. Other times during further price changes, the system would provide the opportunity to increase production for higher prices as well.

The interface to this capability would be the browser of those that are present virtually in the JOC. And I have suggested that these people are the actual oil and gas producer / investor / owners of the property. Imputing a reduction in the separation between management and investors is something that can be, and probably will occur in this current financial market meltdown.

Now I know that their are contractual commitments made to the firms that gather, deliver and market the commodities. The nomination process is how they monitor their business and these people will need to be involved in the decisions that are made at the JOC. That they have the right to demand gas production meet certain annual volumes could be accommodated by recognizing this price management capability and implementing it into their operation as well. I don't foresee an issue here, if there is it may be a simple matter that the producer declares Force majeure to reflect the operation is no longer commercial at current prices.

Irrespective of the ability to have these types of operations conducted I know two things. The bureaucracies are too slow to accommodate any price induced change in production. And the industry has to take responsibility for the prices that they need to realize. As we move the industry from a price taker to a price maker, the optimal use of the reserves and our endowment of oil and gas will be optimized, not only for the producer but also the energy consumer. This is achieved through the generally higher prices that will be realized, and hence the more financial resources that will be available for exploration and bringing on the more difficult production.

Please join me here.

Technorati Tags: People's Specification Ideas Capabilities

Why would accounting firms survive?

In the Draft Specification, I had documented the need for accounting firms to be heavily involved in a number of areas. Audit, compliance, consulting and technology implementation, training etc. In retrospect this was an oversight on my behalf and these activities should be handled by the community of users of the People, Ideas & Objects application.

Recall we have a situation where ideally the oil and gas investor is sitting at the JOC virtual table. It is the investors who are best able to represent their interests. Who they choose to ensure they meet compliance and governance is of importance. Asking once more, why would an oil and gas investor hire an accounting firm to handle their compliance audit and technology consulting?

These firms are a big part of the breakdown in the separation of ownership and management that led to the missalocation of capital and our current meltdown. They are the ones charged with the duty that management be held accountable and were on the front-lines throughout the last 70 years. In a nutshell they have failed. Not only have they failed, but they are also co-conspirators in creating the bubbles that have been built up in the last 10 years. These accounting firms should be treated as if they are radioactive. And that is how they will be treated in this software development project.

This might have become a fatal error on my part. So I am throwing this problem back to the community for resolution on how the investor can be assured that his compliance and governance is achieved. This specific issue should be resolved in the Preliminary Specification. And I would suggest that a clean slate approach be taken in line with the developing ideas of Carl Icahn.

The sad part of this episode is that I only realized my mistake when the accounting firms I contacted treated me like toxic waste. I must remember these accounting firms work for the management, and should therefore be dispatched to the garbage heap, pronto!

This is also why the 100 people needed to complete the Preliminary Specification should follow this process and join me here. To make sure that no more mistakes are made, and yes I do apologize for this.

Technorati Tags: People's Preliminary Specification Management Community