A new security risk?

This is a warning to oil and gas companies regarding a new and significant security risk. Normally I don't concern myself with these, however, the following is the most prolific risk in technology today.

Pod slurping has been known to be a reasonable risk since the beginning of the iPod craze. Podslurping involves high speed copying of hard drives onto an iPod at an unauthorized location. The difficulty is having physical access to connect an iPod device to the network and then copy the disk images to the iPod for later review. With these iPod's being upwards of 60 gigabytes, significant volumes of data can be taken in less then 2 - 3 minutes. That is until now.

If as Microsoft has claimed, their new iPod killer will be wireless, then the physical access is not required. A visitor to your office may be able to access the data on hard drives wirelessly and maybe not even require physical access. I believe this may be a significant risk.

The only remedy is to encrypt literally everything so that the information is useless in the wrong hands. This can be done by ensuring all;

• data is stored in encrypted form.
• network connections are on a virtual private network.
• wireless connections are encrypted, and not broadcast.

Trust Microsoft to introduce the device that brings the greatest risk to data integrity. Which brings up the other risk. The ability to load programs and other data on to a harddrive is also a concern. The ability to store something in non-encrypted form would still be a threat if it were a script or, other compromising data.

When a company of size considers how many hard drives are accessible in this fashion it gives one the willies. Each computer is essentially a potential entry point when one considers that a wireless USB port can be augmented with a 802.11 b/g or Bluetooth connection in less then 10 seconds. Permitting anyone to create a new wireless network for their own use. However, it would be fairly easy to see someone using a computer in an unauthorized fashion, the iPod could be actively downloading information during a regular meeting. The network computer and service oriented architectures have never been more justified.

Now based on Microsoft's release schedule, their iPod killer won't be out until 2015. However, Apple won't sit idly by and let Microsoft introduce any innovation that isn't on their platform first. If there is to be a wireless iPod it could be seen as early as this years Apple World Wide Developer Conference in August. The time frame therefore to encrypt one's data is now, with very little time to do it.

Technorati Tags: iPod, Security, Innovation, Energy

Accidental innovation.

Harvard Business School has published an interesting interview in their Working Knowledge for Business Leaders series. Click on the title of this entry for the article. There are a number of interesting comments in the article and I am going to highlight two here, and then discuss the accidental nature of how I came upon using the joint operating committee as the key organizational paradigm for innovation in oil and gas.

"We have to be careful of these stories, in part because they make such good stories. Some scholars are skeptical of them, but the sheer number of them is interesting. And many scientists, like Fleming, talk very explicitly about the role of accident in their work. Some even argue that the orderly way people sometimes describe processes of discovery and invention, of the progress of science, is nothing less than fraud."

and

"Q: Is there a way innovators can encourage good accidents? In other words, is there anything we can control to foster this process?"

"A: Great question. Artists think they develop a talent for causing good accidents. Equally or perhaps even more important, they believe they cultivate an ability to notice the value in interesting accidents. This is a non-trivial capability. Pasteur called it the "prepared mind." There's an interesting analogy to evolutionary models of creativity here. In 1960, a guy named [Donald] Campbell proposed that we think of creativity as "Random variation + Selective Retention." That is, we need two processes, one to generate things we can't think of in advance, and another to figure out which of the things we generate are valuable and are worth keeping and building upon. In science, the arts, and other creative activities, the ability to know what to throw away and what to keep seems to arise from experience, from study, from command of fundamentals, and interestingly from being a bit skeptical of preset intentions and plans that commit you too firmly to the endpoints you can envision in advance. Knowing too clearly where you are going, focusing too hard on a predefined objective, can cause you to miss value that might lie in a different direction."

"In business, there's a saying that goes "if you don't know where you're going, any map will do." You can almost always get managers to nod in agreement with this suggestion that you might as well not start something if you don't have its end objective well defined. Working without a clear definition of your objective is considered wasteful, inefficient. But if you are trying to get outside what you can anticipate and see in advance, if you are going after the truly new and valuable, this way of thinking can be a problem. This is one truth about innovation that artists seem to understand a lot better than managers."

"Actually, though, I would not really label this "accidental innovation." The innovation itself can't really be said to be "accidental," even though it involves accident. It takes a considerable capability to see the value in an accident, and to build upon it to create even more value."

It seems like forever since I have been pushing this concept of the joint operating committee. If this method of organization for oil and gas firms has the perceived effect of what I think it does, then I certainly am not wasting my time by pushing it. I recall the early part of this century as a time when I was extremely busy. I was working as a CFO for a small oil and gas firm, I was taking courses for my MBA and I was haunted by the devastation that this software company had exercised on me. They were the worst of times, they were the best of times.

One of the things that bothered me about the software business was that I was more or less forced out by a number of mistakes on my behalf. All the value that had been created was dying on the vine. I felt the competitive advantages that were built up were fading quickly as others caught up with better technology and / or thinking.

In 2003 I can recall that I was thinking how could I strategically reclaim the higher ground and get back into the business on a full time basis. This was a raging thought throughout the three years I was studying. I then was required to pick a topic for my thesis. I thought that it would help me to combine my thesis and my intellectual property, together as one project to save time. The time pressures of my thesis came into play and I was desperately wanting to establish more intellectual property. This was based on my own realization that intellectual property was the only sustainable competitive advantage for any business, but particularly the software business.

I was therefore thinking through the entire process of the oil and gas industry and trying to analyze the key piece of data and information that the industry could be made to be more innovative. The ability to become innovative was more or less going to be a revision of the organizational structure, and I can remember vividly it was December and I was parking my car when it just hit me. The joint operating committee needs to be recognized as the key point of the organization. It is the point where most of the conflict and contradiction flowed from. The oil and gas hierarchies have been more or less in direct conflict with the committee for possibly 100 years. The efficiencies of the hierarchy in the large organization were diminishing, the technologies were moving to provide alternatives and the joint operating committee was sitting there as ripe fruit ready to be picked and put into play in the industry.

As soon as I thought of this it was like everything that I was doing was solved. I could build better software, I could increase the organizational capacity of oil and gas producer and I could finish my thesis with a killer topic. All my Christmas' had come at once.

Thinking the idea would sell I published the document to only realize afterwards that no one was going to support the idea. The bureaucracies I criticized and declared redundant, owned the budget process. And said bureaucracies were quick to show me how little they thought of the idea and the rest as they say is history. Being somewhat ostracized from the industry is somewhat refreshing I have to say. The time that I have been given has provided me with lots of opportunity to put more meat on these concepts and acquire more intellectual property through the publication of this blog. The pay is nothing, however, I can exist for as long as I need to finish off the concepts that I am researching and publishing. Besides I can't think of anything I like more then writing this blog. It is challenging and rewarding, the two things that I need the most.

Back to the Harvard article was this the result of a "prepared mind," yes most definitely. With 25 years experience in the industry, a masters level education, competitive stimulation, revolutionary technological opportunities were all factors. As the article also states, knowing that this was the point to push I think is also a key point. I could have easily justified letting this slip away under the basis that, it's too difficult, it would never sell or any other excuse. The last point that the article notes of interest to me is that I had a clear objective in mind, how to increase the innovative performance of an oil and gas producer. I was looking for some key attribute in this area and this remains the overall objective for now and for the long term.

But maybe most importantly, was I lucky? Yes, unquestionably. Serendipity is a good thing.

Technorati Tags: Genesys, Joint-Operating-Committee, Innovation, Energy

Petro Canada piles it on, again.

A press release from our favorite company notes that they have increased their offer for Canada Southern Petroleum Ltd. from $11.00 to $13.00. Recall that Petro Canada was more or less disgusted with the Canada Southern Petroleum Ltd. expectations when they were negotiating with them, I wonder how the management feel now. This whole episode could probably have been avoided if the pig headed management of Petro Canada just sat down with Canada Southern Petroleum. This latest offer bumps the original offer of $113 million a whopping 73% to a total of $195 million.

I'm sorry to be the one that explains that this whole situation is taking on an enhanced perception of panic on Petro Canada's behalf. With only 55,000 shares tendered to their $11.00 offer the message to Petro Canada is more. Will Petro Canada figure that this is a game that they are not able to play and fold, or will they pull out the heavy artillery and acquire more bank debt to acquire this tiny little firm.

To the management of Petro Canada, give your head a shake, at least until it hurts. Your acting like you haven't got a clue about what your doing. The message that this transaction is sending the market is that management is running around in "fire fighting" mode. Stop it and let this bad piece of history die quietly. Now that is my advice and it hasn't actually cost you anything has it.

You have a quarterly report that will be out soon. This report is going to show how bad things really are within the company. Regroup for that public relations nightmare and forget about this Canada Southern Petroleum fiasco, your out of your league.

Start the PR machine to mitigate the effects of your loss of operational control of your flagship Terra Nova property. And the inevitable financial losses of the firm. Canada Southern Petroleum is too small to provide any cover from a PR perspective.

Technorati Tags: Incompetence, Petro-Canada, PR-Nightmare, Energy

Energy Secretary Samuel W. Bodman

This video is on MIT World and is accessible by clicking on the title of this blog entry. At almost 60 minutes it is time well spent. Recall that MIT has declared that energy is the great challenge of the next 50 years. Describing it in terms that are best summarized as a "perfect storm". MIT has arranged as part of their Energy Research Council, U.S. Energy Secretary Samuel W. Bodman to speak on "Our Energy Future: Why American Science and Technology Must Lead the way."

Many of the things that Dr. Bodman speaks of are directly pertinent to the topics and thoughts within this blog. Quoting liberally from his speech:

"Science and Engineering can and should be used to advance the public good. To solve complex problems and to help our society and economy to adapt in a complicated global environment."

and

"A time for breaking down the walls that could limit our future economic growth. And in many cases the tools that we use to do this will be found in breakthroughs in science and engineering."

and

"At a time of increasingly aggressive global competition America must do what we have always done best. We have to take risks, we have to lead, we must invent, we must innovate."

That last quotation is directly in line with the justification for using the joint operating committee, and direct support for these software developments. These are the same points to a large extent that I wrote in my plurality thesis. That science and technology are constrained by the organizational conflict, and bureaucratic interference that limit and kill speed and innovation.

Bodman notes that the majority of his funding for the scientific research and technology has been as a result of a reallocation of resources under the Presidents "American Competitive Initiative"(ACI). He goes on to state that the:

"scientific disciplines are increasingly being linked." And that the effort of the energy department and the ACI go to the "future economic well being and security of our country".

Also noting that he is expecting more then just the development of new knowledge from these government funded research programs.

Although the research that he mentions in his "Advanced Energy Initiative" is on ethanol, hybrids, fuel cell, solar, wind, nuclear and clean coal. It is fair to assume that he fully aware of the demand of the U.S. for gas and oil is and will remain high. His approach currently seems to be limited to establishing some of the alternatives as viable enhancements for the long run in the U.S. and he noted as such the expectations of the market makeup of energy sources.

"Science and Technology must lead the challenge to provide good, clean and abundant energy."

Some noted targets, facts and objectives.

• Ethanol = 5% of the current supply = 14% of the U.S. corn crop.
• The department of energy expect that Ethanol supply will grow to 5 million barrels / day in 20 years.

Needless to say based on these facts the expectation of the US is to continue to use fossil fuels as its primary source of energy. Bodman sees the parallel between these energy related difficulties as similar to those in the cold war inspired space race. Having the Secretary of Energy making these types of comments adds some real depth to the issues at hand.

Technorati Tags: Genesys, Call-to-Action, MIT, Innovation, Energy

Topics of the week.

Oil prices have reached record highs. This seems to be a bigger surprise to the producers than the consumers. I believe the prices will continue to rise due to the increased demand of China and India, duh. Other contributing factors are the general health of the global economy. More people are living better today than at any other point in time and these economies operate on energy. No energy, no economy. With the far larger number of participants in the global economy the more energy is and will be demanded.

The second topic of the day is the cost escalation at Fort McMurray based heavy oil plants specifically. And in general, the increased costs of the oil and gas companies regular operations. Shell and its partners are suggesting the costs of their heavy oil plant are escalating 50% to $11 billion. Which is not bad for a project that started out at $3.5 billion. Would these heavy oil plants benefit from using a system such as Genesys? Yes most definitely, so why has this not happened? I have no idea and would ask any readers that may have an opinion to share it through the comment facilities of this blog.

Many of the participants in heavy oil projects also have conventional oil and gas operations, and many of the plants they own have their own joint operating committees to manage the needs of the plant development and operation. Joint operating committee's are synonymous with good industry practices. This is systemic throughout the industry, the bureaucracies only get in the way.

The only question that remains is how much longer this Genesys software development project will sit on the shelf waiting for the day in which it begins full development. The market needs the producers to produce more and faster, and the community needs to rally around the various calls to action that I am noting here in this blog.

Whether it is the producers that finally say "enough" and finance the development. Or the community of users that says "enough" and finances the developments themselves, these developments need to be done. Who and when are the questions that I ask. With so much academic support such as Hagel & Brown, the various other blogs that provide further insight, the use of the joint operating committee makes so much logical sense that to not attempt to build these systems is foolhardy, I think in the extreme.

Technorati Tags: Genesys, Topical-Subject, Call-To-Action, Energy

The producers paradox.

I had been catching up on some of the better blogs and noted the commentary on Peter Rip's Early Stage VC. He noted a few things that are not only unique in Silicon Valley, but are applicable here in Calgary as well. He of course was talking about enterprise software. How the market for the software had all but dried up and was more of a wasteland in terms of venture capital. I can attest that the oil and gas marketplace suffers from the same symptoms as he speaks of in California.

To be more specific the only software that will be purchased by producers is SAP and Oracle. The producers believe the ability for smaller software players to provide any valuable product or service doesn't exist. However, we all know that the level of innovation and capability being built into these two jurgernauts is non-existent. So what is a company to do? What is an oil and gas producer to do? They could call IBM who have all the solutions if you listen closely enough. The producers are in the unfortunate position of needing something to enhance their performance and make them more innovative. Something more then just a blog, such as this one.

I am tempted to say that you reap what you sow. But since I still would like to do business with most of the producers, I of course won't say that. The paradox comes into play as the most innovation that has occurred in oil and gas systems in the past year was written in the theoretical vacuum of this blog. Nothing happens with the big software vendors because they truly don't understand the producers business. Besides they sold them the latest do-dad just last week.

At the lower end of the market. The place where I exist, nothing happens because we are too small to do anything of "value". That is other then I get to claim a lot of valuable intellectual property.

I could if I wanted too, sell the intellectual property to one of the big software vendors. Well of course I tried that, IBM said they weren't interested. I would not deal with Oracle as our last relations ended in them claiming ownership of what was rightly ours and one bitten, twice shy is the best way to restate that situation. And lastly I don't speak German. Now to be fair to SAP Calgary is one of the smaller ponds in a market that they don't really concern themselves with. Oil and gas is poorly handled by SAP and they seem to be more proud of that then anything else.

Anyways I determined that there was no market for any sales of the intelectural property "product" to the big guys. The producers are therefore left to cobble a series of tiny vendors with Cobol code together to make up their software systems. Ensuring that these software companies are run ragged and fed a diet of rice for sustenance. All and all a great situation.

So now we have a situation where the market is deemed as mature. The software companies are pursuing other industries like automotive and health care, and maybe in Houston the SAP sales rep will show up for a meeting. Here in Canada producers can continue to look down their nose at the small vendors across the table and generally complain about the poor state of any offerings. Meanwhile back at the stock market the demands for more continue to escalate and they are unable to figure out why they are having more trouble making money in this high priced environment!

I can assure anyone that may have a good idea on how to solve the producers paradox, your better off staying at home. The industry is just full of demanding users that are never satisfied and can only complain. Besides there is always hope that someone somewhere will pop out a new, all encompassing software application that they just cobbled together in their parents garage.

Technorati Tags: Genesys, Producers-Paradox, Innovation, Energy

Hagel & Brown, Pull Models, Part II

Continuing on with the review of this fine paper from John Hagel III & John Seely Brown.

Exploring the layers of pull platforms.

This paper continues on discussing the various layers of pull platforms. Needless to say these points have what the authors call a "High Tech Focus." A technological envrionment where the community of oil and gas workers and producers can and will be supported by the various frameworks. The implementation of these communication technologies creating the communities of users that aquire more elaborate and sophisticated capabilities.

Summarizing the information within a table provided by Hagel & Brown;

Infrastructure Layers

1.) Communications Networks

Facilitate the basic movement of information and goods.

2.) Service Grids

Provide enabling services to create more robust and tailored connections.

Performance Fabric Layers

3.) Technology enablers

Create more flexible ways of organizing and mobilizing resources.

4.) Social networks

Increase willingness and ability of people to share resources, especially knowledge.

Creativity Framework Layer

5.) Aggregation networks

Create metadata to help connect participants and resources.

6.) Process networks

Orchestrate capabilities to create new products and services.

7.) Networks of creation

Establish collaborative environments to generate new practices.

(Please note items 1 - 7 are verbatim recreations of a Hagel & Browns table.)

The activities within the pull platform are augmented by "Find, Connect, Innovate and Reflect in each layer of pull platforms." Hagel and Brown go on to further define the categorization of the layers in Infrastructure, Performance Fabrics and Creativity Frameworks. I highly recommend downloading this article and reviewing the details closer.

A key attribute of these Networks and Frameworks is to provide enhanced capabilities to all those within the pull systems. Reflecting on the oil and gas industries potential use of these networks. There could be such a rich environment to operate within. An environment in which the desire and capability of each individual and producer are enriched by their potential of employing resources in this optimal pull manner.

An environment where the limitations of participation are reduced to the lowest common denominator. Where anyone and everyone who has value can contribute. To open a much larger dialog where the collective knowledge and capabilities of larger communities are applied in the most efficient manner. And as Hagel & Brown say

"These communities can also amplify the power of reflection and accretion by bringing together a diverse and often distributed set of participants." p. 38

Or what I foresee is the elimination of the bureaucracy that invades, restricts and limits the potential of companies and individuals. A bureaucracy that has fullfilled its role in enabling the communications and technology markets to be built. A bureaucracy that must now fall on its sword as opposed to fight for its inevitable elimination.

In addition of the bureaucracy stepping aside Hagel & Brown suggest the core capabilities of the company will need to reassess its purpose and role within the community. Companies that limit their role to the "Innovation, Learning and Capability" realize these can be achieved through other intermediaries then command and control. Enabling "each other to reach new levels of awareness and understanding".

Hagel & Brown also suggest as companies begin to adopt these communities of practice the performance tragectory will accelerate quickly, such that companies that choose to maintain command and control will have fewer competitive advantages in the marketplace. I foresee Genesys impacting the performance tragectory of oil and gas firms such that it would be very difficult to maintain any current competitive advantage without its use.

"In a world of pull platforms, the rationale for the enterprise itself must be re-examined. Enterprises will continue to add value in one of three ways; accelerate capability building within communities of practice; orchestrating capabilities across multiple enterprises in process networks or aggregating so that they can be more conveniently found and accessed by other participants in pull platforms. Ultimately, the success of these enterprises will depend on their ability to master different approaches to talent development, including the deployment of more flexible IT support systems to develop talent." p. 42

In oil and gas the reality of this environment is what Genesys provides. The joint operating committee as the key social and organizational construct is the only logical choice. With the legal, financial, operational decision making and cultural influences reflected within oil and gas operations over the past 100 years, how could their be a more effective means in which to define and build software to support the producer.

Technorati Tags: Genesys, Hagel&Brown, Innovation, Energy

Follow on article from Fast Company.

The title of this entry will take you to an article from Fast Company. The article entitled "Team Doctors Report to ER" asks if the focus on teams is misguided or appropriate in certain situations. In light of yesterdays article "The Social Aspect of Software" I think it has some very valuable insight.

Technorati Tags: Genesys, Social-Context, Innovation,

The social aspect of software.

Ross Mayfield writes one of the more popular blog's and also comments on the "many to many" blog site. He is the CEO of social text, a wiki platform that I am reviewing as a possible addition to this blog. I recommend visiting his websites as the commentary is of a high quality and he speaks with authority on the topic of social software.

Mayfield's July 3 posting "Markets are Social" provides a link to an excellent research article called "How not to build an online market: the sociology of market microstructure." this is a research article that was written by Peter Kollock of UCLA and E. Russel Braziel of Bentek Energy. This research reflects on the B2B exchanges that were the rage in the .com boom days and provides an excellent analysis of the social aspect of markets.

In the article the success of the propane B2B exchange in Texas is contrasted by its lack of market acceptance in the smaller California market. The information is invaluable, I think. I want to add a related matter before I discuss the implication and affects in oil and gas. Implications that are directly related to these entries and as it applies to the Genesys software developments.

I want to introduce another comment from another blog Professor Andrew McAfee has also written an article that is closely related to Mayfield's. Entitled "Raising the least common denominator" McAfee notes from a comment that there is a risk that the effect of too great of participation could erode the quality of the business decisions. If everyone has a say then the collective wisdom may be reduced to the least common denominator. A concern that these social markets have and one that I think can and should be addressed here.

McAfee notes in essence that the broader participation is already evident in many things that we do these days. Google searches provide the entire world of information, yet we generally are able to discern the right provider of what we are looking for. The technology is more a tool of the users and as a result the users decide what is satisfactory.

The UCLA research paper describes the success that the propane exchange experienced in Texas and also shows why the same software failed in California. Two completely separate markets with Texas being sizeably larger due to the international flavor of the operations. The Texas market was large enough that the software did not impede the communication that the market participants wanted. The size of the market enabled everyone and anyone to conduct their business as they needed. With ample buyers and sellers in the market, it was able to operate just as a commodity market should with a high level of anonymity.

In California the market only had a few small players. Their understanding of each other made the transactions transparent and everyone could essentially discern the buyer and seller behind each transaction. Here is where the software failed as it didn't capture the personal relationships that the buyers and sellers had. Going on to state that employees of the various companies were more like employees of the market as opposed to the firm. And it was their job and their benefit to help and get along with the other players. In essence creating a market of favors that someone would do for someone else when and where they were needed. These personal attributes were best dealt with over the phone and the software was unused, unlike the Texas marketplace where the software was a success.

Mayfield's posting notes in "Markets are Social" that most markets fall within the California category where the generic manila transaction based software was of no value. The social aspect circumvented the California market and the players created there own "favor" market.

How do I see these "social" aspects playing out in Genesys' software. I think clearly the two articles define exactly the role and nature that people will have in using this software. What I see happening is that the people that you do business with now would not change fundamentally other then providing access to greater numbers of partners and participants.

The decisions remain with the people that are involved and the personal face is implied in the software through codification of the agreements and understandings that the partners have. The way that I see things happening is the people will be able to rely on the system to document, facilitate communications, and process transactions based on these personal or social attributes. In essence sharing a social environment that is noted in the UCLA paper and captured in the collaborative tools that are essential features of this software. Whether they are blogs, wiki's, email or instant messaging, the commercial components and transactions will be handled with these communications as a result of the communications.

For example, if I agree that we will drill a well at your recommended location, the systems would record these transactions and report them as a basis of the fall out from the communication. Essentially eliminating the capture and processing of the data as separate, instead it will be implied and processed as it is agreed to.

I foresee these transactions being a critical part of the communications that are part of the joint operating committee. The participants in the industry will feel more of a belonging to the partners reflected at the committee level as opposed to the investor that they work for. The joint operating committee has for over 50 years on a global basis operated in that fashion. It is only recently that the bureaucracies have been preoccupied with accountability requirements and are essentially disregarding the tools and value of the joint operating committee.

Given that the focus will be on the property that is jointly owned and operated, this will allow these social aspects to flourish. The understanding and speed that the communications and transactions can move will be directly dependent on the capabilities of the collective ownership group and participants. The accountability will fall out of these processes as opposed to driving them, as they do so poorly today.

Technorati Tags: Genesys, Social-Context, Innovation, Joint-Operating-Committee

Hagel & Brown, Pull models, Part l

John Seely Brown and John Hagel lll have written another excellent paper entitled "From Push to Pull, Emerging Models for Mobilizing Resources." (October 2005) These two researchers continue to impress me with their leadership capability in this new technology frontier. As I have stated here before, they have been pushing these themes now for over 5 years that I am aware of and continue to be the leading edge thinkers.

The final paragraph of the introduction captures much of what I believe and write about in this blog.

"By mastering the techniques required to make this new model work, companies will be well positioned to create substantial value. Those who adhere rigidly to the old model will likely destroy significant value." Hagel & Brown p.4

Contrasting the efforts of Petro Canada in this blog is designed to provide a real life example of what this blog is attempting to solve. If the "pull" model of innovation and creativity were operational in the oil and gas industry, this commentary would have achieved its objective. However, there is ample resistance to these changes. Many vested interests have aligned against these ideas and Petro Canada to me provides the greatest contrast to what this blog is not proposing. If by reviewing this Hagel and Brown document, we can gain additional insight from these two top notch researchers it will be well worth the effort.

Forces that are driving the search for alternative mobilization models, Hagel and Brown identify 5 forces that undermine the push model.

• Increasing uncertainty.

Push models require stable environments. "In today's environment it is harder to deploy resources in anticipation of demand." p.14 Oil and gas producers seem to be unable to agree on why the high energy prices persist. I believe they are a fundamental reallocation of the financial resources to encourage and reward innovation. The companies themselves seem to believe they are a temporary aberration.

• Growing abundance.

With bigger markets, involving more competitors and shorter product cycles. China and India have joined the Former Soviet Union and eastern block countries in consumer based economies. The production from these areas is substantial and the markets are immense. All of these markets will demand greater volumes of energy.

• Intensifying competition.

Outsourcing of secondary tasks like accounting. Push models are overwhelmed "by extended business processes." p.17 The authors are essentially noting the interdependent nature of the supply chains are growing longer and more diverse. I fundamentally believe that the joint operating committee configured with the proper software is the best way for the industry to deal with these "extended business processes". The complexity of the supply chain, the diversity of the offerings leads to greater opportunities for innovation.

• Growing power of customers.

Hagel & Brown cite iTunes and other applications that are effectively disintermediating large portions of distribution channels. Due to the oil and gas industry being capital intensive I don't see the risk of disintermediation, however, the efficiencies that can be had with better systems is something that the industry needs to consider today.

• Greater emphasis on learning and improvisation.

Training is replaced by coaching and apprenticeship. The retirement of the oil and gas industry veterans will need to occur after their tacit knowledge is captured.

Pull Platforms.

I believe it is a testament to both Sun Microsystems and Dr. James Gosling that so much effort and time has gone into providing Java with superior exception handling capabilities. It is not by accident that pull platforms are identified by Hagel and Brown as heavily relying on exceptions to the standards.

"Pull platforms are designed from the outset to handle exceptions, while push programs treat exceptions as indications of failure." p. 22

and then go on to say;

"Because of loose coupling of modular design, pull platforms can accommodate a much larger number of diverse participants. The more participants, the more valuable the platform becomes."

Although this may currently run against the more secretive culture of the oil and gas industry. The demands for energy are now insatiable and remove the competitive nature of the industry. This competitiveness is, I think, going to be replaced by coopetition.

Pull platforms have the following characteristics which work to encourage creation and use.

• Find

All the necessary resources are available at the critical time they are needed. The authors note WSDL (Web Service Description Language) an XML description of a resource. Just as I have noted the value in XML tags here before, WSDL provides an automated manner of discovering new resources.

• Connect

With other participants of resources as required through elaborate networks. The technologies that are available today are designed to provide greater participation. Participation with like minded groups that are able to identify and resolve issues in the oil and gas industry.

• Innovation

Provide a more flexible environment to innovate with the resources made available to the producers.

• Reflection

Recombine and improvise with much more rapid feedback regarding their impact.

I will cut the conversation at this point and pick up the rest of this document in another post starting with "Exploring the layers of pull platforms."

Technorati Tags: Genesys, Hagel&Brown, Innovation, Energy