OUR PRELIMINARY SPECIFICATION MAKES SHALE COMMERCIAL. THROUGH AN INNOVATIVE BUSINESS MODEL SUPPORTING THE JOINT OPERATING COMMITTEE, WE PROVIDE OIL AND GAS ASSETS WITH THE MOST PROFITABLE MEANS OF OIL AND GAS OPERATIONS, EVERYWHERE AND ALWAYS. ENABLING THEM TO ACHIEVE ACCOUNTABLE AND PROFITABLE NORTH AMERICAN ENERGY INDEPENDENCE.
OIL AND GAS’ VALUE PROPOSITION IS AT A MINIMUM, LEVERAGED TO THE POINT OF 10,000 MAN HOURS PER BOE. WE KNOW WE CAN, AND WE KNOW HOW TO MAKE MONEY IN THIS BUSINESS.
This is a follow on post to Professor Don Sull's video. Scroll down to the blog entry for December 21, 2009 entitled "McKinsey, Strategy Through Turbulence". My apologies for the continued technical difficulties. I have opened the root page of the blog to show the last 100 posts. Individual posts will not render. I believe it has something to do with changes that Google made to Blogger-in-Draft which appear to be on their radar. Until this is fixed please use only http://innovation-in-oil-and-gas.blogspot.com.
In the closing two paragraphs of this document, Professor Sull states the following.
A downturn brings hard choices into stark relief, provides an external rationale to justify difficult decisions, and offers “air cover” with external stakeholders (including investors and directors) to reverse previous decisions. In the current market, senior executives should consolidate their major initiatives into a single list and make the hard choices needed to select a handful that are truly critical. To ensure that everyone gets the message, they should communicate the priorities throughout the entire organization, along with a list of initiatives that are no longer key objectives, to ensure that people do not waste resources on unimportant matters.
To suggest that the oil and gas industry hasn't changed in the last decade would be a fairy tale. Revenues have escalated to 400% currently, and peaked at over 700% of what they were a few short years ago. Now costs of oil and gas operations and capital investment are following the same pattern. Those that are able to remain agile and innovative are being rewarded with higher cash flows and most importantly higher profits. We will soon see what the earnings of the bureaucratic firms look like for all of 2009. I think then the writing will be on the wall to do something about it.
In many ways doing "more" has failed. Drilling more wells then the previous year did nothing to increase the reserve life index. Its time to take stock of what the approach will be for the next 20 years. If Exxon is correct that there will be an extra $20 trillion in capital invested in the next 20 years, then this time horizon is what we should focus on. Addressing the systems that identify and support the Joint Operating Committee are proven in this research to provide the value necessary for producers to succeed in this harsh environment.
As Professor Don Sull notes this economic downturn provides "air cover" to the management to do something to affect the culture of the company. Realigning the Tax, Royalty and SEC frameworks of the bureaucracy with the cultural, financial, legal, operational decision making and communication frameworks of the Joint Operating Committee. This change will increase accountability and innovation which I believe is why management have fought so hard to eliminate People, Ideas & Objects from the marketplace. Why work when the revenues are so handsome and we look so good. I think these "good old days" are ending and they may need the cover that Professor Sully talks about.
One final thought: economic crises can provide an ideal opportunity to invigorate the cultural transformation that is often needed to cultivate operational agility. For example, in the transition from good South Korean player to great global company, Samsung Electronics made most of its progress during the global recession of the early 1990s and the “Asian contagion” of 1997. Senior executives used these crises to renew a sense of urgency, justify unpopular decisions, and overcome complacency or resistance to change. Focusing on culture is critical because outexecuting rivals time and time again requires constant injections of urgency, effort, and enthusiasm. A performance-oriented culture helps induce such effort.
In my January 10, 2010 post I documented the comments of Mr. John Bogle, Professor Carlota Perez and Professor Wanda Orlikowski. These people were making the same point as Professor Sull is in the above quote. These also mirror the experiences that I have had in People, Ideas & Objects. Strong academic and sound business advise for management to get out of the way. The longer they take to begin these difficult processes the harder it will be for them to change. If your a shareholder or investor in oil and gas and believe that the industry would be better served by having the Draft Specification and Community of Independent Service Providers built, please join us here. And if your a user, please join us here.
I am aware that individual posts, when selected from the blog archive to the left, or within text of other blog posts are not rendering any text or post specific information. Individual labels are working. I am working to fix this problem as soon as possible.
In the meantime, I have increased the "root" page from 15 posts to 100. Loading times are increased, however, more current posts will be able to be displayed. I apologize for any inconvenience.
We conclude by observing again that we believe we are in the midst of a major paradigm shift: technological trends are causing a change in the way innovation gets done in advanced market economies. As design and communication costs exogenously decline, single user and open collaborative innovation models will be viable for a steadily wider range of design. They will present an increasing challenge to the traditional paradigm of producer-based design – but, when open, they are good for social welfare and should be encouraged.
In a recent post covering Professor Wanda Orlikowski's paper, I documented the difficulty I have had with management of oil and gas companies. Suggesting in the Preliminary Research Report that they used the knowledge that software defines and supports organizations, therefore, you need to build the software first. As the means to ensure that they would never be challenged by never sponsoring software of the nature of People, Ideas & Objects. This was also intimated by Professor Orlikowski, will be documented in an upcoming post of Professor Carlota Perez and mentioned in the Wall Street Journal article today.
Professor Orlikowski states:
Confronted with synthetic worlds, these researchers will in all probability focus their attention elsewhere. And this choice has consequences for the value of organizational scholarship: "to the extent that the management literature continues to overlook the ways in which organizing is critically bound up with material forms and spaces, our understanding of organizational life will remain limited at best, and misleading at worst' (Orlikowski and Scott, 2008, p. 466).
Professor Carlota Perez states:
Organizational inertia is a well known phenomenon of human and social resistance to change. In the market economy, however, inertia is overcome by competition, which, by showing the direction of success, serves as a guide to best practice and as a survival threat to the laggards.
And Mr. Bogle notes
In short, far too many of our corporate and financial agents have failed to honor the interests of their principals—the mutual fund investors and pension beneficiaries to whom they owed a fiduciary duty. The ramifications were widespread—for the failure of money managers to observe the principles of fiduciary duty played a major role in allowing our corporate managers to place their own interests ahead of the interests of their shareholders.
All of these points are related and mirror my experiences in People, Ideas & Objects over the past six years. It is time for the energy investors and shareholders to get behind this software development project for their own purposes. People, Ideas & Objects provides a means for the energy shareholder to manage their oil and gas assets. Management are wrong and conflicted in making these decisions to support their personal positions. Mr. Bogle suggests the time is now "Then, I found few allies. Today, perhaps, this is an idea whose time has come." They have a fiduciary duty to their owners to do what is right. As Professor Perez notes, competition eventually solves this problem. It is therefore time to choose if your oil and gas company will be a leader or a laggard.
If you are interested in People, Ideas & Objects, please consider funding our 2010 budget. If you are a user who knows there is a better way to organize in oil and gas, please join me here.
In summarizing the eight compelling reasons for getting involved in this project.
The first compelling reason is, oil and gas has moved into a more complex and difficult environment(s). Technically, financially, politically and logistically to name just a few. These environments require producers to make more decisions, and the companies can not keep up. Review a firms Reserve Life Index and you will see the extent of this problem. Exxon has valued this increased complexity at an increment of $1 trillion more in capital expenditures per year over the next 20 years. Let be me clear, I want Exxon to fully participate in these developments.
The second is the response of the ERP vendors. There is a storied history between SAP and the industry & Oracle and the industry. Not a lot of love there. Such that, any opportunity to address the above point, People, Ideas & Objects, thankfully for the Community of Independent Service Providers (CISP), is the only solution. If the others can't see the problem, then they'll only waste money in building a solution. Oh wait, Oracle has already spent $39 billion in research and acquisition costs in bringing Oracle Fusion to market. If you want your company to be the one that keeps Oracle's return on investment positive, I wish you the best.
Third, much of People, Ideas & Objects extensive research that went into the Draft Specification was based on Professor's Williamson's, Langlois' and Baldwin's research in Transaction Cost Economics. This critical area of research earned Professor Oliver Williamson the 2009 Nobel Prize in Economics. Showing that the Draft Specification has a basis in strong academic research. This grounding in leading edge research is the foundation of which the users and CISP will use to design the Preliminary Specification.
Fourth, since the economy did not tank and we can build on what remains. Academics have turned to organizations, technology and innovation as their key areas of research. This will have substantial benefits to the user community and Community of Independent Service Providers involved in People, Ideas & Objects software applications.
These compelling reasons are being marketed to the investors and shareholders of the producer firms. They are the ones that are being called upon to fund, or direct their oil and gas companies to fund, our 2010 $10 million budget for the beginnings of the Preliminary Specification. The user community needs to see the commitment of the producers to begin to step up in this difficult and opportune time. I also expect Shell, BP, Chevron, Total, Devon, Chesapeake, Saudi-Aramco, Pemex, and Petronas, to name just a few, to contribute to the 2010 budget and the future requirements. They can't play in the game if they don't pay the fee to get into the ball park. That is to say, the benefits to producers is getting involved early and often. Making organizational change requires that the software gets built first, otherwise the existing sophistication in terms of division of labor, the complexity and capability of the markets will be lost. Not everyone will be able to join us, I expect the laggards are too busy with their problems, which will only lead to their unfortunate demise.
A sixth point is the compelling value proposition provided to the user community and the producers themselves in this software development project.
Seventh, I recently had the opportunity to detail a gaping whole in the Draft Specification, the User Vision. I am pleased that I can forcefully put these points across and not be belittled by managements perception that it's a toy. Professor Orlikowski's research came at an opportune time to build real value to this project and fill out our previously un-spoken user-vision of the People, Ideas & Objects application modules.
I recently noted two new papers from Professor Carlota Perez are to be reviewed in the very near future. What is stated in those papers is that the real value of the Information Technology Revolution is about to begin in earnest. This trend is expected to continue for the next 20 years and provide a ground floor business opportunity for our CISP, and, subscribing producers.
If your a producer that wants to benefit from these developments, and support the team financially, please review our Funding Policies & Procedures. Or your a user that wants to contribute to these developments, please join us here.
A recent post suggested that there was a hesitancy in detailing too much about the user interface to be used in the People, Ideas & Objects application modules. Firstly, this design process that we are undertaking in the Preliminary Specification is about the oil and gas business, not about the new(er) technologies that have been developed. And this post is not so much about the technologies but how the user will interact with the modules being developed here. The interface, as Apple & Google have shown us time and again, is the critical piece in how people use their technologies. [Please stay with me for the full post as this requires some reader faith.]
Back in the dot com bubble much was made of the "Exchanges" that were being built. The market cap for these companies were in the billions and they would prosper through building the technology to facilitate exchanges of documents etc. Thankfully that era ended and we never saw these technologies get picked up. However, today the concept of exchanges is developing again. And they will fail. That is why they do not appear anywhere in the Draft Specification. What does appear are Marketplaces. Places where the people and technology live together in perfect harmony. Creative license is a treasure.
The hesitancy in posting about this is due to the fact that I see the People, Ideas & Objects user interface being exactly like the World ofWarcraft (WoW) user interface. Now that the non-believers have left we can speak to the advantages of this. If you've never seen WoW ask a teenager, actually any teenager, to look at their version of the game. It's brilliant. Note how the environmental variables, and pretty much anything can be accessed through small groupings of control panels. Each provides the user with the control needed to operate the game.
and
Just search YouTube for World of Warcraft and you'll be able to see the analogy I am trying to make here. Professor Wanda Orlikowski defines a term in her paper "Synthetic Worlds". In the Draft Specification there are at least four "Synthetic Worlds" that I want to quickly mention.
Any and all Joint Operating Committees oil and gas assets.
Each of these are Synthetic Worlds populated with the User defined environment. Each facility or oil and gas property is populated with a virtual representation. If a rig was drilling a new well, then the Synthetic World would emulate the actual activities on the rig. [Look to the Technical Vision of this project to understand how that happens.] Importantly, the interactions between people and their avatars, and other avatars, are supported by the design elements that can negotiate a contract, and design a transaction to have a fracing company come in and double the number of horizontal fracs based on what was discovered down hole.
The Petroleum Lease Marketplace might appear like an old "exchange" [bad word] where people are buying and selling. But in this instance it's oil and gas leases. And maybe their not buying or selling but pooling their interests with their neighbors to ensure they get approved for the gas plant they want to build. A producer may be selling off it's none core assets. A young engineer is looking for support to fund his dream of turning the Basal Quartz into the most prolific zone ever. These, all being in real time with people in the marketplace.
The Financial Marketplace module will handle the financial resources of the producers. If you don't like the billing you received from the previously mentionedfracing company, engage them in a virtual private meeting regarding resolution. Interestingly so, since were emulating real life virtually, we are also recording it, making it easy for the producer to show why thefracing costs are incorrectly billed.
The Resource Marketplace module where an oil and gas producer can find any type of service operation from the Community of Independent Service Providers, the service sector vendors like the fracing company mentioned, the employees the firms want to hire. All provided in a Synthetic World.
Now that I have provided full and complete certainty to my detractors, is this possible? Here we have Dr. Eric Schmidt who was the president of Sun Microsystems at one time, also CEO ofNovell at one time and has been the CEO of Google for the past 10 years has to say about Synthetic Worlds.
Everything in the future online is going to look like a multi-player game,” said Schmidt to this international audience. “If I were 15 years old, that’s what I would be doing right now.
In answer to those questions is it possible? Please refer back to the videos earlier. That rich of an environment has been in the game players world for the past number of years. Critically here is where Professor WandaOrlikowski pick up her research. Note that her discussion is based on the Sun Microsystems "Java" (imagine that) environment known as Project Wonderland. An "Open Source" (imagine that) development framework for business' to implement these technologies. Please see the Sun research documents here, here and here. And watch this video of Project Wonderland.
Before we get to Professor Orlikowski research I want to put one more critical aspect of the Draft Specification into play. The Military Command & Control Metaphor is a critical aspect of the Compliance & Governance Module and how things can work in the appropriate business sense. To suggest that anyone and everyone have access to a game players type of situation is ridiculous. The need to implement a key part of the organizations compliance and governance needs to be available. When we add that the JOC is representative of many producers we add an element that makes this scenario of a Synthetic World impossible. Add the layering of the Security & Access Control Module and the Military Command & Control Module in the Draft Specification, the problem is solved. The only requirement that I think we need to add is a means to visually identify the appropriate role and rank of each individual in the Synthetic World. [I'm thinking Star Trek Shirts with different colors and badges, oops there's my detractors again.] So that the representative from the fracing company can see that the avatar of the individual he is negotiating the contract with does have the authority to execute on behalf of the producer and the JOC.
One more paragraph and were at Professor Orlikowski's research. John Hagel posted an entry on how relationships and dynamics in the work place. His comments add another perspective to the discussion.
Drawing on a specific scenario from a contemporary workplace, I review some of the dominant ways that management scholars have addressed technology over the past five decades. I will demonstrate that while materiality is an integral aspect of organizational actively, it has either been ignored by management research or investigated through an ontology of separateness that cannot account for the multiple and dynamic ways in which the social and the material areconstitutively entangled in everyday life. I will end by pointing to some possible alternative perspectives that may have the potential to help management scholars take seriously the distributed and complexsociomaterial configurations that form and perform contemporary organizations.
Commenting on the scenario that is best represented in the last YouTube video above, Orlikowski states:
A normal day at the office for a software development team? Not quite. I have omitted an important detail. The Project Wonderland rooms, offices screens, and documents are part of an online, three-dimensional,immersive environment for workplace collaboration within Sun Microsystems, known as MPK 20. Within this graphically intensive virtual workplace, users interact in real time using audio, text and images, and they share applications and content from a variety of online sources.
In answer to the many of Professor Orlikowski's questions; people use marketplaces for everything. The marketplace is the boiling pot of research into the capitalist system. A system of organization and activity that everyone subscribes to.
The use of synthetic worlds for organizational activities such as distributed collaboration raises interesting questions for scholars -- how to make sense of a study of these in management research? What are some existing perspectives that might usefully be drawn on to do so? What new or alternative perspectives might be more relevant? What are the implications of choosing certain perspectives over others in accounting for and articulating particular issues and insights?
2. Established perspectives on technology in management research
Professor Anthony Giddens Structuration Theory was used in the preliminary research report. His theory identifies that People, Organizations and Society move in lock step with one another. If there is a difference in the pace of change of these three elements, a failure occurs. As I indicated in a recent post, ProfessorOrlikowski "Structurational Model of Technology" was used in the Preliminary Research Report to determine that society and technology are linked by "the duality of technology" and the "interpretive flexibility of technology". Please see the Preliminary Research Report for further application to the energy industry. The majority of Professor Orlikowski's work has been in these areas.
Three distinctive conceptual positions on technology are clearly evident in the management literature of the past few decades. In the first perspective, which I will characterize as absent presence, technology is essentially unacknowledged by organizational researchers and thus unaccounted for in their studies. In the second perspective, technology is posited to be an exogenous force -- a powerful driver of history having determinate impacts on organizational life. The third perspective, that of emergent process, technology is positioned as a product of ongoing human interpretations and interactions, and thus as contextually and historically contingent.
The value she has created with her ideas is in this fourth perspective of technology. What she in essence says is that dealing with organizations and technologies as separates, management research has to deal with them as one. This is the area of research that the Preliminary Research Report was able to determine that to change organizations, the technology or ERP system should be designed and built to identify and support the Joint Operating Committee. It is also the area where the management of the oil and gas companies, my detractors if you will, have used these ideas against themselves. Suggesting that they would not be challenged in their positions if the technology never changed. These ideas and their implication provide the support I need to appeal to the shareholders and investors in oil and gas to take thisperversion of Professor Orlikowski's work away from the management and eliminate them.
Recently, a fourth perspective of technology -- that of entanglement in practice -- has attracted interest within management research, largely influenced by longer-standing development in sociology and science and technology studies (Barad, 2003; Latour, 2005; Suchman, 2007). As I will describe below, this alternative perspective entails a commitment to a relational ontology that undercuts the dualism that has characterized but also limited much of the prior technology research in management studies. In particular, this perspective offers the potential to radically re-conceptualize our notions of technology and reconfigure our understandings of contemporary organizational life.
I believe it is very clear that the threat to management by technology has been significant and it is human nature for them to resist. I think the Project Wonderland, People, Ideas & Objects marketplace models and the many other supporting conditions prove that the technology will eliminate management. And it is the responsibility of people and society to ensure that organizations change to ensure they do not continue to hold everything back.
5. Conclusion
Professor Orlikowski sees the aberrant way in which management have approached technology. In her conclusion she intimates that management will continue to forestall the adoption of further research.
Confronted with synthetic worlds, these researchers will in all probability focus their attention elsewhere. And this choice has consequences for the value of organizational scholarship: "to the extent that the management literature continues to overlook the ways in which organizing is critically bound up with material forms and spaces, our understanding of organizational life will remain limited at best, and misleading at worst' (Orlikowski and Scott, 2008, p. 466).
Orlikowski shows us the way's and means to implement these technologies.
They will conclude, as I do here, by suggesting that the perspective of entanglement may be particularly useful for management research going forward. As contemporary forms of technology and organizing are increasingly understood to be multiple, fluid, temporary, interconnected and dispersed (Ciborra, 1996; Stark, 1999; Child and McGrath, 2001; Law and Urry, 2004), a perspective that renounces the categorical presumption of separateness is likely to offer a more useful conceptual lens with which to think about the temporally emergentsociomaterial realities that form and perform contemporary organizations.
Multiple, fluid, temporary, interconnected and dispersed. I wonder if this type of environment would make the average oil and gas worker more productive? I wonder if the producer would be more profitable here vs. say SAP or through Oracle Fusion? This is how I see the oil and gas industry being able to raise it's productivity to the level necessary to fuel the worlds demand for energy. If you are a producer that sees this as a reasonable way in which to proceed, then please support these software developments and the Community of Independent Service Providershere. And if you're a user that sees the benefits of logging into this environment as opposed to spending the two and a half hour ritual needed to get to work. Please, sell short the commercial real estate stocks you own and join us here.
Another reason that the oil and gas producers should financially support this blog is our compelling value proposition. Based on a business model that allocates the costs of development over the population of subscribing producers. This creates value by assessing the producers only once for the development costs plus an element of profit as developers. The Community of Independent Service Providers (CISP) who provide direction and guidance to the developers are part of these costs. However, their costs in using the software to support the producer will also be billed directly by the members and do not attract the profits element for People, Ideas & Objects.
These are user-driven developments that have the user in the forefront of designing, implementing and supporting ERP software for their producer clients. This is a complete restructuring of the industry in order to "Provide producers with the most profitable means of oil & gas operations".
The perspective of People, Ideas & Objects towards software is that it's a journey and not a destination. An innovative oil and gas producer can not subscribe to a fixed ERP system when the political, technical, logistic and financial difficulties continue to escalate. As things change so should the software and the CISP who use it. This dynamic attribute can only be provided in the fashion that is discussed in this software developments value proposition.
In order for the success of this development and community to provide value to the producer. We need to provide the most profitable means of oil and gas operations. This is People, Ideas & Objects competitive advantage. It's important to realize that our competitive advantage can only occur if the strategy of the producer focuses exclusively on their competitive advantages. And lets be clear the choice of ERP system has absolutely nothing to do with an oil and gas producers competitive capability or advantage. For a producer to attain the success they are searching for. They need to build the engineering and earth science capability within their firm. In addition their asset base is where their scientific capability will be applied. People, Ideas & Objects competitive advantage only provides the producer with the knowledge that from an administrative point of view, it is the most cost effective and efficient means of production.
If you are producer and this value proposition resonates with your perspective of the future oil and gas producer, please review our Funding Policies & Procedures. If your a user, please join us here.
Rarely are we provided with research that is applicable both professionally and personally. McKinsey Global Institute (MGI) have just published a comprehensive document entitled "Debt and De-leveraging: The Global Credit Bubble and Its Economic Consequences". A country by country breakdown of debt levels and the situations that both individuals and organizations will face in the coming years. The document can be downloaded from here. (Registration required.)
Although there is no breakdown by industry. Oil and gas is not in the situation where they are highly leveraged, in comparison to other industries. The high prices of the last few years did fuel heightened levels of activity, but those were with cash flow generated from production. As I have indicated many times, producers are being rewarded for their innovativeness. Borrowing money and raising capital are no longer the critical determinants of success in oil and gas.
In a video entitled "Energy: The Past Must Not Be Prologue". Professor George Schultz reflects on the stop / go mentality regarding energy. During his tenure of the Eisenhower, Nixon and Reagan administrations he saw first hand the effects of disjointed and canceled initiatives. Now that we are in a similar situation, and as he notes more dire as a result of the U.S. importing over 60% of their oil needs. He hopes that the situation regarding the long term vision of energy security is fulfilled through a long term commitment.
Secretary Schultz starts his presentation by stating his thesis.
Over the past four decades we have experienced a roller coaster ride on an energy express that has landed us unnecessarily in a place that is dangerous to our economy, our national security and our environment. Now in 2008 we have the chance to realize what we know. We can do something that we should of done long ago, and didn't.
His policies recommendations remind me of how sound the Reagan administration was. One of the stalwarts of the Reagan years was George Schultz in a variety of positions. It is clear in hindsight that he served his country well. His policy recommendations are exactly what needs to be enacted. This is a frustrating topic for him. His attempts to resolve some of these problems in the Nixon administration were obviously frustrated by the politics of the day. Nonetheless he suggests he is optimistic this time, and that this time may be different but we have to get it right and stick to it.
His recommendations are:
Give wind and solar a consistent tax environment. Agreed these will not provide the type of scale of even hydro electricity but everything helps.
Conservation. Disagree, not to suggest we should be wasteful, but energy is the means in which economies operate. Attempts to conserve may be counter to the benefits of the economy. If each barrel of oil offsets 18,000 man hours of physical labor, deferring the use of that energy is counter productive. The costs of one barrel of oil will show the world that at future prices it will remain the best of bargains.
Carbon capture and sequestration. Agreed, CO2 is a miscible agent and therefore has the dual role of pressuring formations and enabling more oil to be separated from the rocks that hold it. The more CO2, the less the cost, the greater the benefit to future production.
Nuclear power, Schultz suggests a careful opening of this means of energy production. Not that nuclear energy production is bad, its the waste and nuclear proliferation that create more problems.
Stop doing some of the dumb things that we are doing. "The encouragement of producing corn based ethanol" is a dumb policy. Agreed more energy is consumed in the entire process then what is produced.
Develop our own oil and gas resources. Or as Sarah Palin says, drill baby drill.
A floor price for oil and gas prices in the U.S. Having a defined value for the resources you find and produce will go a long way to stabilizing the stop / start manner of the energy industry. The costs to the consumers may actually be less in the future.
Heavy spending on basic research. Cites an example in the health debate of how more is being spent on insurance, whereas the reason the quality of health care is so high is the basic research that has been undertaken. Schultz also notes the role of innovation in the development of science.
At around 30:00 minutes Professor Schultz quotes MIT President Susan Hockfield in an impassioned call for sustained energy research.
Lastly at 54:00 minutes he notes the effect of the academic life, or the living in the world of ideas. When he was called upon by government he was always able to leverage the ideas that he knew were around. I think this is something that the users, and most specifically the Community of Independent Service Providers, can do with their career. The Draft Specification is the beginning of the ideas in People, Ideas & Objects. They will be able to be taken and built upon in ways that we can't even imagine today.
As always, if you are a producer and would like to support these communities financially, please follow our Funding Policies & Procedures, and if you are potential user, please join us here.
A trend is forming in the academic community. There are no shortage of papers that address the types of opportunities that now exist in the technological, organizational and innovation areas of academic research. This is an extremely strong trend, one that is a follow-on to the massive effort that went into determining the causes and effects of the financial crisis. As we move away from the possibility of a meltdown, we can see the resources of the academic community moving forward in terms of where business should position itself to succeed in the future.
It started for People, Ideas & Objects with Professors Baldwin and von Hipple's paper. We took a detailed and comprehensive review of the paper due to its pertinence and value to the Community of Independent Service Providers and the producers that support People, Ideas & Objects. That review will soon be joined by one from Professor Giovanni Dosi entitled "On the nature of technologies: knowledge, procedures, artifacts and production inputs". Professor Dosi's work was the key or primary research component contained in the Preliminary Research Report. His work helped to define what an innovative oil and gas producer would need, and that the Joint Operating Committee (JOC) is indeed the means to achieve that innovativeness. This new paper resonates with the work that is being done here. I will be reviewing all these papers in this blog as soon as I can get to them.
An additional paper from Professors Wanda Orlikowski of MIT permits me to write about something that I was too reserved to write about. This paper will add a layer, or dimension, to our software developments that ties together many of the questions users have. Professor Orlikowski's work was used in the Preliminary Research Report as well. Her work had defined the Technological Model of Structuration based on Professor Anthony Giddens Structuration Theory. It was through this work we were able to define the cognitive and motivational paradox' of building these software modules. Her Model of Structuration was also used to determine that software defines the organization. Therefore to change the organization requires that we first change the software. Which led me to coin the phrase "SAP is the bureaucracy".
We also have two very good papers from Professor Carlota Perez of Cambridge University. She has been able to define for People, Ideas & Objects the economic environment we find ourselves in. Basing her theories on the research of economic events over the last 300 years. This has provided us with an understanding that the Information and Communication Technologies (ICT) are creating significant economic changes. These changes are reflected in the dot com bubble and our recent financial driven bubbles. And now that these "events" have occurred, as she predicted, we can see the context of the current ICT Revolution is ready to be exploited. Recall what Ludwig von Mises said about the industry revolution. It was the solution to the problems at that time. We find ourselves in similarly challenged times and the ICT Revolution is the solution to those problems.
All of these works from Hagel, Baldwin, von Hipple, Dosi, Orlikowski, Perez and others show the time for the oil and gas industry to undertake the types of revisions prescribed by People, Ideas & Objects is now. It is important to highlight this development in this posting. People who contribute their time and energy to the developments of People, Ideas & Objects are compensated handsomely for their contributions. It is however not enough to start these developments until we can assure the producers and users that this project will be successful. That the people behind this development are taking the steps necessary to ensure success and that the super human effort of going beyond what is expected can be undertaken by every individual who participates. The point of this post to highlight some of the areas that we can show the producers and users that this success is closer to being attained. What we have so far is as follows:
1) There is general and widespread understanding that the oil and gas industry has entered an era where the cheap energy is gone. What remains is politically, logistically, financially and technically much more difficult. An exponentially higher level of difficulty. It has been noted by Exxon and others this will require upwards of $20 trillion additional capital over the next 20 years.
2) Professor Oliver Williamson's Nobel Prize in Economics being awarded for Transaction Cost Economics (TCE). This was a surprise event in that this relatively obscure area of the science. TCE has now been recognized for its importance on a go forward basis. Most importantly the Draft Specification incorporates the state of the art understanding of Transaction Cost Economics.
3) Our competition, Oracle and SAP have used and abused the oil and gas industry for too long. Neither have products that are satisfactory for the upstream oil and gas industry. Importantly Oracle has taken themselves out of the game by spending $39 in research and acquisition costs to bring Oracle Fusion to the world. This level of capital expenditure will price Oracle out of most of the markets they operate in. In addition, the oil and gas industry will need to spend at least as much in customized development costs as People, Ideas & Objects blank slate approach would.
4) The oil and gas producers are being called to fund our budget for 2010. At $10 million this is the amount of money that I think we can physically spend. It is being applied to the Preliminary Specification based on the Draft Specification and the agile development methodology. This is not to suggest that the entire design will be complete with this budget. It would be fool hardy to suggest that this project will be undertaken on the basis of $10 million in design costs. I hope that we will be able to develop the first iteration of the Draft, Preliminary, Detailed and Final Specification's within the scope of a $100 million commitment. People, Ideas & Objects Users, Developers, Account Managers and Project Managers all need to see the oil and gas industry commit these resources for this design. Success demands this.
5) The academic community, through independent actions of the noted leadership in their disciplines, highlight this area as a key area of value accretion to all businesses. People need to be seeing the academic community rallying around these concepts. Providing help for our users and producers to foresee how success can be attained. I would also suggest that the academic community is raising a serious warning to those producers who do not heed this call. It has been convenient for the bureaucrats to belittle People, Ideas & Objects, they may now be doing so at their own expense.
Here are the five compelling reasons that users and producers should get behind in this project. What is possible and attainable in People, Ideas & Objects has never been done before. For this reason the up-front analysis and work to ensure this project is successful is necessary. We are very close to that point, and the people want to move-on from just thinking and reading about it. If you are a producer that wants to support this project, please follow our Funding Policies & Procedures. If you are user that would like to join us, please follow this procedure.
Please note throughout these writings our reference to bureaucrats represents the CEO, CFO, COO and directors of the producer firms. These are the people that we see who have the authority to correct these issues and are the individuals responsible for the damage and destruction in the industry.
Please review this software applications Preliminary Specification, in which we provide an overall vision of how a producer would operate using the Joint Operating Committee as the key organizational construct.
If you are interested in joining People, Ideas & Objects user community then please follow this process. Lastly you can contact me at paul.cox@people-ideas-objects.com or Calgary (587) 735-2302 and Houston (713) 965-6720.
