Changing deck chairs on the Titanic

I should thank SAP for this post. They have published a YouTube video of their use of Google Wave, and its all that I thought that Google Wave could be used for. Here's the Video.

What the video doesn't show is the level of security being used and the location of the individuals. It is more then reasonable to assume these individuals are located at various different places and could theoretically be anywhere, and through a standard browser. It is also possible to provide the highest levels of security that are technically possible to those users, wherever they may be. And these attributes are well reflected in the video, but I have to argue the damage that a tool such as this would bring to any oil and gas company.

What is it that SAP is missing in terms of providing this solution? What we learned in the Preliminary Research Report was that change needed to be introduced in the proper fashion. Specifically the cognitive and motivational paradox are key issues that are not being addressed in SAP's use of Google Wave. The cognitive paradox identifies that people perceive the new with an understanding from the old. Taking the old and superimposing their understanding on the new is a danger in SAP's use of Google Wave. The motivational paradox recognizes that people are concerned more with production, or getting their job done, then learning the new methods or tools. These two paradox have been critical in the need to understand how change is introduced in the Draft Specification. Simply there has to be a clearly defined break from the old. A significant break in which the new can be approached in the manner that is somewhat a blank slate.

Change for the sake of change, is wrong. Particularly with SAP's use of a new technical tool. Technically driven change is a disaster in the making. That is why People, Ideas & Objects is basing these changes in the strong economic forces in today's depression. Orchestrating this level of change is not possible unless there is the type of economic reforms that people like Professor Carlota Perez speak of. The old dinosaur bureaucracies are failing, actively destroying shareholder value, and are leading to the renewal for new and innovative ideas and organizations. This opportunity is ours to take.

I see serious problems in allowing this type of powerful technology (The Google Wave application, not the SAP application) introduced without any support for the changes made. And more importantly without the full consent of the management or ownership of the firm. In this video they introduce a number of people who collaborate on a new process that does not have the requisite authority or responsibility to make any changes. Designing things because they can collaborate does not make it a valid process. In oil and gas I could take Google Wave and quickly write a new process that would involve the collaborations of any number of producers involved in a Joint Operating Committee. This would be dangerous and irresponsible, that SAP misses this point is of concern to me. This is also why the Draft Specification developed the Military Command & Control Metaphor.

Particularly for a publicly traded company, decisions and actions have to have a document-able audit trail, compliance and governance implemented and operational. When we think of a JOC we have multiple organizations legal, financial, operational decision making, cultural and communication frameworks. It is my opinion that allowing this type of application, of which many examples have been written about here, is irresponsible for the management to allow. I also have an opinion that management are not that interested in working that hard to stop this type of activity. Just as they do not go out of their way to be more proactive with respect to compliance or governance. As I said it is just irresponsible of management to "allow" this to happen, but chaos may be the better choice for them to make.

In oil and gas management's sole concern is the compliance and governance of the company. It is People, Ideas & Objects "design" to have the compliance and governance moved from the bureaucracy to align them with the legal, financial, operational decision making, communication and cultural frameworks of the Joint Operating Committee. As one learns in most MBA programs the separation of operational decision making and compliance leads to no accountability. This is managements to exploit in the current market. There motivation is to ensure they are not eliminated by having compliance and governance more accurately managed within the software.

We have also learned that the division of labor is the primary means of enabling economic growth. The video shows the influence of many different people involved in the process, however, it is more a matter of convenience that these people are motivated and the scope is based on expedience. When we consider the interactions of people through a JOC we have interactions that, if left to an ad-hoc development, would not provide the value that the appropriate analysis would bring. As I have frequently mentioned, the current oil and gas industry is populated with potentially thousands of different jobs as a result of the growth of the industry. Allowing poorly implemented technologies such as SAP is doing in the video can lead to a destruction of that division of labor for something that is not efficient. Leading to the chaos mentioned and presenting to all the kings horses and all the kings men, the never ending story of Humpty Dumpty.

We are entering a world where the tools are very sophisticated and capable of significant benefit to society, if used properly. We are also viewing the world from a high level of sophistication in terms of its economic order or division of labor. These are being altered without an appreciation or understanding of how fatal even a small decline might cause the company. Management should be concerned at what might happen when falling from these lofty heights. Making undocumented changes and not implementing the appropriate levels of compliance and governance is irresponsible, bordering on criminal. Managements have been able to disassociate themselves from the shareholders and investors by entrenching themselves in a rigid compliance framework. This is also why no one has ever been fired for recommending SAP.

Ah the things you can say when you've been ostracized for your ideas, truly liberating.

Technorati Tags: People's Perez Change Collaboration Development Economics Google

What about those prices.

Two conversations that are taking place are the relatively high oil, and the low natural gas prices. The opposite directions of oil and gas prices seems to be a result of the North American natural gas markets being satisfied by shale gas developments. What is the future of these prices.

It would seem to me that the economic developments and stimulus have done nothing to stem the depression we find ourselves in. The U.S. dollar is under attack and they seem not to be able to, or want to do anything to stop the decline. Those individuals that are holding U.S. bonds will soon realize the pain that was delivered to mortgage holders last year. As big as the mortgage market is, the size of the U.S. bond market will have as big and if not bigger dent's in the world economy. Hang on to your hats.

So the demand for energy may fall further, this is almost a guarantee as I see it. The two economic phenomenon that I have been banking on this past decade. The transition between the old to the new economy. And, the increasing difficulty for the bureaucracy to produce and explore for oil & gas. That I never put these two theories together, and predict that the prices would collapse shows how real life is always surprising.

So there we have it. The next step down in the economy is baked in the cake and the shock will hit the commodity markets, and the oil and gas prices will decline. The decline in prices will be sharp enough to bring great difficulty to the producers. We have moved to a high production cost environment. The management have hung their hats on the phenomenal earnings they made last year based on those higher prices. I wonder if they will take the blame as much as they took the credit for those spectacular results. Lets hope they do and are summarily fired as they should be.

What's driving these price declines. The inability of producers to be able to shut in production is causing the prices to collapse for the short to mid-term. Some producers have been able to shut in their 100% owned properties. Properties that have multiple owners are able to shut in production through the operational decision making framework of the Joint Operating Committee. The problem is that the ability to do so, in a material way, is constrained by the sheer numbers of JOC's and the contractual commitments of the producers. The conflict within the participants of the JOC is unable to be resolved because in essence, no one clearly identifies the JOC as the key organizational construct of the energy producer.

Why would the industry continue to produce at the volumes they are when these volumes are killing the prices. Shutting down of any future activity has been the very dull tool the industry has used to weather the storms. Not spending money on drilling more wells and facilities has been taking place now for almost two years. Earnings are in significant decline with not many companies showing a strong balance sheet or reserves. The traditional price-taker mentality is in full effect with no one seriously considering the necessary mechanisms to reduce the amount of product being brought on the market.

Continuous production of product in the face of such a dire forecast shows the need to have the systems and organizational structures of the industry rebuilt. Specifically around the JOC and with the systems I have described as the Draft Specification. I sought to resolve this problem by putting into place the necessary mechanisms for the Joint Operating Committee to determine at which price levels would trigger a 10% decrease, and if future declines needed another 10% decline in production, at what price level that would occur. Giving an automated means for the JOC to predetermine what is best for the property.

These conflicts and contradictions in oil and gas are are no longer able to meet the needs of the industry. Time has now come for the producers to act and support this software's development. Or, they can continue to watch the prices decline further and further and hope no one fires their buts. It has been well known for a very long period of time the energy price elasticity. Meaning that large price changes are brought about by small changes in production. Management I'm sure are hoping that these economic principles don't apply to them, and will wait it out to see if that is the case.

Continuing to muddle along as a corporate strategy is now putting the industry in serious jeopardy. Without the appropriate tools to manage the business, the management are damaging their shareholders investment and the industry capability. Leaving it in their hands is irresponsible in my mind, we should be building the software and community that will support the innovative oil and gas producer for the future.

Let me make it absolutely clear so that there will be no confusion. I have received no support and no funds from the industry for this project. Zero! In September 2003 I was ostracized and kicked to the curb when I first proposed these ideas to management. And laughed at by those perfect management teams since. It is not recommended that anyone should expect that operational code be written and waiting for companies to start using. What I have done since 2003 is complete the Preliminary Research Report. Researched the viability of a system based on the JOC. Based these ideas on an economic and academic foundation that total's over 700,000 words on this blog. And detailed a vision of what the systems would look like when the industry is using the JOC as the key organizational construct. The software development of that vision is what is needed to be done, and from scratch for lack of a better word. I have done everything humanly possible to make this vision real. It is not my fault that people will be disappointed with the progress of this project. Please join me here.

Technorati Tags: People's CISP Economics Development Change
 

A revolution is at hand.

Times have changed. There is a strong and supportive attitude toward our armed forces. When the challenges to our peace and freedom are weak we don't seem to have an adequate respect for the military. It's times like these when we are at war and the war is everywhere, we see the military in a different light. I for one am glad that we have stood for freedom and peace for as long as we have. Those that wish to diminish our freedoms should think twice.

On Monday the Boston Globe published a photo series called the big picture, I highly recommend you subscribe. On Monday they did a series of photos of "Kazakhstan's radioactive legacy". The images are graphic and are amongst the most difficult to view. These are the product of a country that takes people's freedoms and peace for granted. Thank you to our military.

With the twentieth anniversary of the fall of the Berlin Wall, Christopher Hitchens, one of my favorite authors. Noted in this weeks Slate article ,

Lenin once defined a revolutionary situation as one that occurred when the rulers could not go on in the traditional way and the ruled did not wish to continue in that old way. Engels was more metaphorical, saying that revolution was the midwife that delivered a new life out of an older body.

Not to suggest that we are in revolutionary times, but the information revolution has been speculated to mimic the industrial revolution. So in light of these, how does People, Ideas & Objects bring about these changes. Hitchen's notes;

Throughout the 1980s, democratic insurgencies in the Philippines and South Korea, as well as the long resistance of the anti-apartheid forces in South Africa, showed that when the ruled do not want to go on in the old way, all they really need do is to fold their arms.

It's time for the management to cease, fold their arms, and join us here .

Technorati Tags: People's Change Call-to-Action
 

Our Competitive Advantages

This post is about the technological competitive advantages of People, Ideas & Objects. The unique advantages that technological developments bring to our approach to ERP systems development. It's important that users and producers understand how our advantages can deliver the systems as defined in the Draft Specification. If people are not sure if what we are doing is even technically possible. Then it is difficult for them to see how a start-up can take such an opportunity and deliver on it. In a nutshell, yes we can. The proof has been written about elsewhere and I will refer to these so the individual can do their own research. This is important, as I do not expect anyone to have to take a leap of faith that this risk is not being identified and addressed.

I want to also stress that the identification of yourselves to any producer as being affiliated with this project is not advisable. The management of the oil and gas companies are not constructively approaching the systems or organizational needs of the innovative oil and gas producer. Secondly, to suggest that the individual give up their current career for this opportunity would be too much to ask. I would only expect that people would be involved with this project on a part time basis to begin with.

Contrast the competitive advantages that are being developed in People, Ideas & Objects to the competition. Oracle has spent $39. billion to bring out their Oracle Fusion product. How has this product been built to deal with the issues of the innovative oil and gas producer? SAP has a checkered past in the industry and they too have what I would consider critical faults in their offerings.

The first thing is to define the priority of the development. In systems you can have any two of three priorities. Either 1) the speed of development, 2) the quality of the development or the accuracy of meeting the users requirements, or 3) effective cost control. Making this decision is academic when we consider the scope of the application, the financial resources of the oil and gas industry and our fundamental value proposition and business model. The speed and quality can be attained in a start-up, I'm not certain that it can be built into a large organization such as SAP or Oracle. Our speed and accuracy are something that have been available to SAP and Oracle in the past. Asking them to overcome the speed and focus I know is too much.

The key technological advancements that make People, Ideas & Objects the most competitive in the oil and gas marketplace are as follow.

Java

By for the most powerful of programming environments. And blah, blah, blah techno talk. Needless to say this is an easy and unanimous choice.

Frameworks

Employing the re-usability of Java. Rebuilding everything from scratch is just not necessary. So much infrastructure and capabilities have been built into open source and other frameworks. Providing infrastructure and capabilities at a level that enables flexibility without the constraints.

Open Source

In combination with Agile / Scrum, Frameworks and Java, Open Source brings so many of the qualities that it is hard to document them all. Realizing the value in software development is in the journey, not the destination.

Data Model

Maybe one of the more difficult decisions, but this is what we have so far. We will be using the Professional Petroleum Data Model (PPDM) data model. And in answer to the technical question are we relational or object relational, I'll need to be convinced that an object relational model would work in a complex application such as People, Ideas & Objects. Until then we are relational. Performance may not be as fast, however, accuracy will be predictable.

The PPDM data model has the combined efforts of the industry in defining a data model for use by members of the petroleum industry. Our use of this work, which is substantial, eliminates a difficult area of concern. PPDM increases the quality of the subsequent developments. At the same time I think PPDM's data model has not been rigorously tested in the marketplace. And therefore we will be looking critically at the data model to see if it can be enhanced through a more strict interpretation of Relational Theory. And if it can be optimized for the innovative oil and gas producer. 

Modular Specification

The Draft Specification is modular for a reason. Modularity is a key attribute of simplifying systems development. Interactions between modules are easily handled and the overall system design can be accommodated. In total we will be employing fifteen development teams in the agile / scrum development methodology.

Agile / Scrum

This is a method that has simplified development to its most efficient. Scrum increases the performance of a development team from two to ten times the standard. That's correct, a two to ten fold increase in productivity. This doesn't sound at all believable but I can assure you it is true. Although it is open and available to anyone that wants to strive to achieve these multiples of development efficiency, it is difficult to implement retroactively in teams that have been together for a long period of time. Many developers are unable to transition.

One of the key attributes of Agile Scrum teams is the focus and role of the user. It is critical and the methodology makes itself accountable to those users in quick, short, intense development periods. I'll talk more about this methodology in the future, one of its key advantages is that the team can be distributed as far, and as wide as is required. Enabling the best of the best developers to be recruited and involved in this development. The key mode of communication between users and developers is the User story.

User Driven

You can not expect the user to be satisfied with systems that do not involve them. Users can not expect worthwhile systems that they did not have a hand in. The difficult and time consuming aspect of building systems to the users specification is the development of the community. People have had time to be able to codify these ideas and think of new and innovative ways for the system to be built to deal with a nuance of their day to day activities in their jobs. This will be the real key competitive advantage of this community.

User Interface

I don't use Windows systems. Two hours with one of those machines and I get frustrated either at the slow pace of my work or the fact they seem to break every time I push them. Using Mac's as machines and Unix / Linux are the only ways in order to deal with computers.

I have a wonderful ability with computers. When I started in oil and gas in 1977 I was introduced to them and they have been my friends since. In fact all my best friends are computers. The way we interact with them is critical to the productivity of the user. To ignore the user interface is to miss out on much of the computers value.

Users need to see the approach we are taking is going to be successful. Committing to a losing cause is in no one's best interest. How their involvement in the quality of systems is clear. What is not clear is how an application of such scope and functionality can be approached and built. The performance of technology, its reliability and maturity are providing productivity gains that are surprising to everyone. I'm seeing a distinct move away from the Oracle and SAP style of application offering. The need for fast, innovative firms is being demanded throughout the world. This can only be provided by a software development capability dedicated to the innovative firms. Please join me here.

Technorati Tags: People's Development User Capabilities Community
 

Nouriel Roubini on the carry trade.

A big part of this software development project is a lesson in how change is adopted in business. For People, Ideas & Objects to succeed requires the status-quo be replaced by the new. People need to realize the way things are done are no longer working. Our current economy provides the understanding that the current bureaucratic firms are consistently being faced with difficult situations. It appears to me that the efforts in trying to keep these dinosaurs operational is far in excess of what is needed to start over.

Our economic problems seem more and more to be a product of not accepting that the status-quo should be replaced. In the past ten years it seem we have lost the capital discipline necessary to carry out the further development of the economy. Housing is not an investment. Investments provide returns, not happy family moments. Climate change and alternative energy do not provide returns. They are man made cost centers that will be funded by taxes or the consumer.

Investments need a return and are productive in nature. They should not rely on luck but skill, and they should be based on cold and unbiased financial criteria. I don't want to come off preaching but these lessons seem to have been lost, particularly in the U.S. Professor Nouriel Roubini is well known for his precise calling of the economic crisis that started last fall. Today in the Financial Times he is calling for the "Mother of all carry trades faces an inevitable bust."

To suggest the economies have recovered is a bit of stretch for me. Stuffing $12 trillion into the global economy, keeping interest rates as low as possible, only shows how bad things are. At some point these factors will change and I suspect the U.S. will be no longer permitted to abuse their number one asset, the U.S. dollar as reserve currency. It is easy to forget the stimulus that has been injected provides a strong cushion to the effects of the economic damage. It is clear there is damage and that damage will need to be repaired by time, policies and capital discipline.

Arnold Kling states

In spite of all the sophisticated rhetoric about "quantitative easing" and "new tools for monetary policy," the only way that I can understand what the Fed was doing is to say that the goal was to stimulate bank profits, not the economy. If your goal were to stimulate the economy, you would inject enough reserves to do that and not pay interest on reserves. That might require buying some long-term bonds or mortgage securities, but not the hundreds of billions that the Fed actually bought.

Everything the Fed has been doing over the past fifteen months makes sense if you think of their goal as transferring wealth from taxpayers to banks. If you try to explain it as an attempt to implement an expansionary monetary policy, you won't even get past my high school students.

Reading Nouriel's article in the Financial Times makes it clear speculators are using the U.S. dollar as the funding currency in the carry trade. Enabling them to speculate on any type of asset they can access with the excessive liquidity in the market. This isn't gambling, it's gambling with the game fixed in their favor.

The point of this blog post is that the hard work we face is necessary. These efforts to support the economy will fail and take the status-quo management with them. Someone has to pick up the pieces, and for oil and gas, that is People, Ideas & Objects. Please join me here.

Technorati Tags: People's CISP Economics Development Change
 

Forbes says no to big software!

I have to say I'm impressed. We haven't covered any Forbes articles up until our first one yesterday. And today they knock another one out of the park. Maybe they are focusing on the business value of technology, and if so it would be a welcome change. The author of this article has a strong background in IT as noted here.

Roger Burkhardt is the president and CEO of Ingres and serves on the board of directors. Prior to Ingres, Roger served for six years as the CTO of the New York Stock Exchange. He and his team were responsible for the transformation of the NYSE to a fully electronic model, and conducted much of their IT work using open source.

Just as I have stated here many times before, People, Ideas & Objects is a ground floor opportunity. One that has offered a compelling vision for people to rally around and build the solution in the Open Source, higher quality and lower cost environment. Saying so long to the Oracle and SAP big bang style of application integration.

The recession has cast a bright light on the tactics used by Big Software companies to lock in their customers through multi-year license agreements. In these agreements, annual fees go up, but can almost never be reduced--even if the customer's business has downsized.

Which brings up an interesting point, one that I had not noted before. The services provided by the Community of Independent Service Providers are under the control of the producer. If the producer needs to scale back, then that can be arranged with the contracts they have with the individual service providers. With the rental of the software based on a per barrel of oil equivalent per year basis. If a firm makes an acquisition or divests a property these are reflected in the rental rates in the current year. Nothing unexpected, nothing constraining, just a cost plus allocation over the entire industry.

According to Sims, open-source software is not only as good as proprietary vendor software, but in many cases, he claims it's even better. In addition, he says he has saved his company over 50% in IT costs annually since he replaced proprietary software from Oracle, Microsoft and Hewlett-Packard with open-source solutions.

You don't have to take it from me, but he has a point. Please join me here.

Technorati Tags: People's CISP Value-Proposition Development Change
 

Some uses of Google Wave

I am one of those that became enchanted with Google Wave after I saw its initial demonstration. Few technologies have the potential to be game changers. Applications like email and the browser were in the same class of announcement as Google Wave. That we can implement the application in the People, Ideas & Objects - Draft Specification modules. And use it as a means of collaboration during development, make the application a critical part of our developments. I highly recommend that you view this video.



Several groups have been granted early access to Google Wave. It has been received particularly well by the people who have had access to the application. In a Forbes article, author Dan Woods notes the recent response to the application and the implications to ERP software vendors.

But the flexible collaboration of Google Wave is out of reach for the current generation of enterprise software. In addition, the flexibility and configuration of the data structures offered by Google Wave would make modern SaaS software seem restrictive. This freedom will require governance and a new way of thinking, but that is a topic for another day.

If we look at the Draft Specification, it has the "freedom will require governance" problem. The Joint Operating Committee by definition is represented by many different producers. All of the modules have this fact as a critical aspect of how this application will be able to deal with the unique aspects of the oil and gas industry. The JOC is the cultural means of the industry. The Draft Specification is the only application capable of recognizing and building on these attributes.

The combination of the Security & Access Control Module, Governance & Compliance Module and the Military Command & Control Metaphor are how People, Ideas & Objects provide this "freedom will require governance" model. This is a key point. Unless these attributes are built into the application at the start, then the ability to retrofit a ground breaking application with these attributes doesn't exist, in my opinion. I noted this essential attribute and noted the risk that the industry would face as a result of technologies advancement, without explicit management support, would lead to the leakage of control over the firm. Leakage over the day-to-day and strategic attributes of the firm. As technologies become easier and simpler to introduce, the role of management can be circumvented AND hence their responsibility to make sure this does not happen. As I mentioned in Technologies Darker Side in the Preliminary Research Report, companies were advised of this risk, and I reiterate the risk here and now. If the management of firms remain negligent to this risk, there will be consequences to the investors of the firm.

Please join me here.

Technorati Tags: People's User Video Google Knowledge

Who has the money.

It should be no surprise to any one that the money that supports these developments and the Community of Independent Service Providers (CISP) comes from the oil and gas producers. I have spent a significant amount of time doing the research that supports the Draft Specification. The distribution of the ideas contained within that document has been heard far and wide. Time now to put this project into a commercial venture. This post sets out to detail how the money that supports the software developments and the community of people that will use the software in their future day to day operations.

Let me state clearly that the Users, People, or Community of Independent Service Providers (CISP's) are all one in the same. And the key focus of the quality and value of the software that is being made. I would hope that the involvement of the user has been clearly expressed in my writing over the past few years. User involvement is the critical and difficult component of how this business will succeed. Clearly, to my way of thinking the sustained commitment and enthusiasm of the user base has to be supported by a strong financial motivation. This post is how the user can make a lucrative and long term career and profession around this "ground floor" opportunity.

CISP's or users have two sources of revenue. One is from the producers they work with for the services they provide, and the second is for the work with the developers from People, Ideas & Objects. Making the application operate in the manner that the User needs in order to be effective in providing their services to the producer. The User being the critical hub of all activity in this community. All of this is high value added work and I can not think of many positions that would be more involved and interesting. Whether the individual who joins this community desires to be a sole proprietor or expand to a substantial firm, these options should be considered open and available.

All the work that will be commissioned by People, Ideas & Objects will be through a work order system. The Users participation will be very heavy at the beginning phases of development. Then when the specification is deemed by the Users to meet theirs and the producer's needs, the developers will begin the process of writing the system. It will be at that point the amount of time that the Users will be involved will decline slightly, limited to guiding the developers through the initial building process and defining and directing the future changes and enhancements they want in the system.

The users revenues from the producer will be for planning and implementing their system, training their staff, running their applications, monitoring and maintaining the firms use of the People, Ideas & Objects software. Anything and everything of an administrative, accounting, land, production, legal etc at the producer client. They will be well educated and senior enough to fully understand what the producer wants and needs. They are the people who know how to do the job, and they can detail these requirements to the developers to build the tools they need to do their job. Our collective objective is to ensure the producer is provided with the most profitable means of oil and gas operations.

The services to the producer are billed and managed by the users organization. People, Ideas & Objects does not foresee the need or desire to be involved in these operations. We are software developers.

So how does People, Ideas & Objects source their funding. The producers that use the software will be subject to a "rental" fee based on their production profile. And yes if a start up producer doesn't have any production then there is no software rental fee. And of course, for users that conduct work with People, Ideas & Objects developers, their clients lack of production does not preclude payment for their services in developing the software.

These rental fees are assessed on an annual basis and for 2010 the assessment will be $1.00 per barrel of oil equivalent per day. So a firm such as Exxon which has 3.921 million barrels of oil equivalent per day, their 2010 software rental assessment would be $3.921 million for the year. Conceptually when we include the National Oil Companies, International Oil Companies, Independents and start up operations. We could conceptually have a revenue stream of approximately $120 million. However that is probably far in excess of what will be realized. And that does not preclude us from increasing the $1.00 charge in subsequent years to a multiple of that.

These fees will be assessed on producers that have contracted with People, Ideas & Objects to participate in the further development of the Draft Specification. The obvious question is why would a producers do this? I think the development of this software under the direction of the user community. With the overall objective of providing the producer firm with the most profitable means of oil and gas exploration and production. The business model that charges the costs of development over the entire industry, once, is compelling and a significant reduction compared to the fees that are paid for SAP and Oracle. Simply there participation is a value adding process to their firm. Having the Users and developers working to most effectively run their firm.

Therefore any producer that wants to begin this process is welcome to join. I know that it is in the best interests of the Users not to identify themselves to a producer. I would caution anyone to do so until this process is moved further ahead. We are fighting the vested interests of management and they like nothing more then to attack any new and innovative way of doing their job. They have different ideas and they will use their budgets to exercise their desires. So please be careful. I will publish within this community a list of any producer that wishes to join this process and have paid their software rental. And to say that we may never see a producer step up is a real possibility. That is why I attempt to deal with the investors and stakeholders of the producer firms. They are the ones that must direct the management to fund these developments. If you know of someone who fits that description then please forward them this information. And please as always join me here.

Technorati Tags: People's Community Development Process Organization User Value-Proposition
 

New Feed Address

Please change your "Innovation in oil and gas" feed from whatever you are using now, to this new feed address.

http://feeds.feedburner.com/blogspot/kuLF

Thanks

Technorati Tags: People's Technology Change
 

Change at Conoco

The Houston Chronicle reports today that ConocoPhillips have revised their corporate strategy.

ConocoPhillips CEO James Mulva signaled a dramatic shift in course for the nation's third-largest oil company Wednesday, saying that after years of bulking up through acquisitions, it is now focused on being a smaller, leaner business that takes better care of its shareholders.

Everything that People, Ideas & Objects is about is represented in that statement. Going back to the Preliminary Research Report, the changing nature of the energy industry has been evident for a long time. Nothing has been done about this during the past 10 years. Why would anything be done when the high energy prices made managements look effective. Now that the writing is on the wall, expect to see many CEO's become enlightened. I am surprised though at the comment that ConocoPhillips would take better care of its shareholders. It is the shareholders of these producer firms that I expect will direct the financial support towards People, Ideas & Objects and the User community. Providing them better control over their oil and gas assets.

A point about communication. If you or someone you know works at ConocoPhillips, or any other producer. Please introduce them to the Draft Specification and encourage them to get involved here. For me to establish a direct communication with ConocoPhillips, or for that matter any producer, is counter productive in terms of the Community of Independent Service Providers. It is the Users who are the critical contact with the firms. They are the ones that will use the People, Ideas & Objects application modules and their services to make the producer the most profitable that it can. It is the User community that will direct the developers in the development of the applications they need. For me to communicate directly with the producers is counter to the interests of this user community.

But the change is necessary in light of the global recession and the difficulty of accessing new oil and gas reserves around the globe, coupled with the massive costs of extracting them, he said.

An honest assessment of the change to the oil and gas business. The position of the producer firm needs to be able to focus and support the innovative earth science and engineering talent in their firm. To do that requires the Joint Operating Committee to be the key organizational construct of the innovative oil and gas producer. It is one thing for ConocoPhillips to begin the process of becoming more focused on the sciences. In today's market the ability to change direction needs to have the changes recognized in the software first. SAP and an innovative science oriented Joint Operating Committee will not work. Bringing the CEO Mulva's comments into question as to their validity.

Mulva's comments underscore challenges facing major oil and gas companies and may even call into question the bigger-is-better, integrated business model that has prevailed in the oil industry for decades.

Asking these giants to make the change from the SAP induced bureaucratic firm to something more nimble is difficult for me to see without a change in the ERP systems they use.

Now, ConocoPhillips appears to be embracing a business model more akin to smaller, independent oil companies, which many investors prefer because they are more nimble and likely to deliver better returns, said Fadel Gheit, oil analyst with Oppenheimer & Co.

Who knows maybe they will be successful. Or the properties they sell off will continue to fuel new and more innovative firms.

When asked if he believes other oil companies will follow its downsizing lead, Mulva said not necessarily. But, he said, “I think longer term — I can't speak for the other companies — it's really changed from prior decades. It's going to take a somewhat different approach.”

That different approach is members of the User community joining me here.

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