As we embark on the development of these software modules. The technologies that we are using bring new dimensions and new opportunities to those that use them. Pursuing technology for technologies sake has proven to be a path of disappointment. This doesn't mean they are to be ignored, and I think if they are ignored, then these dimensions, opportunities and possibilities can and will be missed. Each of us should take the time to understand the technologies and apply them in this development in the most creative and value adding way. This is an opportunity for each of us to make this industry as profitable as possible for all concerned. The market, the producers, and the people who will earn their living in applying these software offerings to their day to day businesses.
It is in that vein that McKinsey has and is developing a competitive advantage. The application of technology is a cornerstone of their offering and much can be learned from their perspectives and research. This article, to me, reflects some of the opportunities that exist in today's marketplace. I hope that my readers see how they can capture some of McKinsey's ideas and incorporate them into these software components.
8 Business Technology Trends to watch.
McKinsey starts with noting;
"Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business."
Since we are calling for the industry to be re-organized in a manner that explicitly recognizes the Joint Operating Committee (JOC). Recognized as the key organizational construct of the marketplace. A place where the market and firms are well defined and have roles that are actively supported in the software we are building. McKinsey continues with eight trends that I think are very pertinent to the work that we are doing here.
Managing relationships.
1. Distributing Co-Creators
Again McKinsey hits a home run with their first sentence, reflecting the possibilities we have in this time and space.
The Internet and related technologies give companies radical new ways to harvest the talents of innovators working outside corporate boundaries. Technology now allows companies to delegate substantial control to outsider - co-creation - in essence by outsourcing innovation to business partners that work together in networks.
And hence, why we have begun development.
By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.
Software products that will make the oil and gas producer able to move
faster and more
innovatively.
2. Using Consumers as Innovators
Users are the consumers of the applications developed here. The Users are the ones who will use the applications to do their job in the most optimal fashion. The tacit knowledge of the industry resides in the people who make it work and get the job done. To exclude them from the development process makes no sense, and here McKinsey captures why.
Consumers also co-create with companies; the online encyclopedia Wikipedia, for instance, could be viewed as a service or product created by its distributed customers.
3. Tapping into a world of talent.
The Users as consumers hold the tacit knowledge and talent necessary to make it valuable. This combination, when aggregated by today's collaborative technologies, can solve any problem in the oil and gas industry. These tools and technologies have to be developed by the Users. And like the developers, compensated for their time and efforts in the development. The use and services of the People, Ideas & Object applications modules must be provided to them free of charge, and that begins here with these software developments. It is the producer who will fund these development costs.
As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks.
4. Extracting more value from interactions.
And as McKinsey so eloquently states;
As companies improve the productivity of these workers, it will be necessary to couple investments in technologies with the right combination of incentives and organizational values to drive their adoption and use by employees. There is still substantial room for automating transactional activities, and the payoff can typically be realized much more quickly and measured much more clearly than the payoff from investments to make tacit work more effective. Creating the business case for investing will be challenging - but critical - for managers.
Managing Capital & Assets
5. Expanding the frontiers of automation.
The four cornerstones of
People, Ideas & Objects technical vision consist of
Wireless Networks,
Java,
Asynchronous Process Management and
IPv6. These four technologies combine to provide and enable higher levels of automation in ideas, data and information.
Companies still have substantial head-room to automate many repetitive tasks that aren't yet mediated by computers - particularly in sectors and regions where IT marches at a slower pace - and to interlink "islands of automation" and so give managers and customers [Users] the ability to do new things. Automation is a good investment if it not only lowers costs but also helps users to get what they want more quickly and easily, though it may not be a good idea if it gives them unpleasant experiences. The trick is to strike the right balance between raising margins and making customers happy.
6. Unbundling production from delivery.
The examples cited in the McKinsey document don't necessarily apply to the situation in oil and gas. Unless I am missing some key point here, however, this certainly applies to the joint industry development model proposed in People, Ideas & Objects.
Unbundling is attractive from the supply side because it lets asset-intensive businesses - factories, warehouses, truck fleets, office buildings, data centers, networks, and so on - raise their utilization rates and therefore their returns on invested capital.
Leveraging information in new ways.
7. Putting more science into management.
Studies have shown consistently that the truth lies within the data. Using intuition and luck as the keys to a competitive advantage have been soundly defeated. Education and data analysis has proven superior in making decisions. With more data and information soon to be available, this trend will need to be met with more effective and efficient tools, and, knowledgeable Users who are well equipped with the software they need to do their jobs and make the right decisions.
8. Making businesses from information.
This last point makes it clear how I see many of the Users and Developers of this system will launch new and innovative businesses within the oil and gas market. They will be able to create an ecosystem and environment in which to earn a living from this development and software application. How their relationship with producers may change and where they will find the demand for their skills.
Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities.
What is possible at this time and age is reflected well in this McKinsey article. It begins the process of discovering what can be done to make oil and gas producers more innovative, and faster at what they do. There are also economic principles that originate with Adam Smith in the 1700's. Economic growth is accelerated by defining ever-greater divisions of labor and organizational models. Join me here.
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