And we're back

Something happened in the blog that caused the "Post Pages" feature of the blog to fail. I have turned that feature off and if you now select any individual post, it will render. A related problem was occuring with the comments feature. That too has been remedied. Selecting another post within a post will not render and this is being worked on. Those accessing content through a reader are redirected to a interim page that will let you click through to the current post. Please resume normal reading patterns. ;)

Complex Adaptive Systems

Today I'm opening a new line of research in this blog. We are now turning the corner and beginning the process of becoming an organization that builds the application defined in the Draft Specification. Back as far as May 2004, in the Preliminary Research Report, self-organizing teams have been part of this software development project. Not just the software developers, the self-organizing and adaptive team concepts are being applied to the User groups and the Community of Independent Service Providers. With this post I'll begin aggregating this research on the "Agile / Scrum" Technorati Tag, and Label.

Why do we want to do this? I am of the belief that the software code that defines and supports the innovative oil and gas producer will never be static. Constant change and improvement are a necessary underlying requirement of supporting the earth science and engineering capabilities of the oil and gas producer. A producer may discover through using the many Marketplace modules; other ways of doing things that are more effective. Just because this new method may be a 10 fold increase in the way things were done before, doesn't mean that another doubling isn't just around the corner. A committed software developer and user community is a cornerstone of the innovative oil and gas producer, and what People, Ideas & Objects is structured to achieve.

Another reason we are doing "Complex Adaptive Systems" (CAS) is the fact that the scope and scale of the application modules is beyond what can be achieved in the traditional ways of organization. Add to that the demands of the energy marketplace will soon outstrip what the producers can deliver. There will soon be the need for an acceleration in performance of the oil and gas industry, that is multiples of today's performance. If engineering and earth sciences required $1.00 per barrel of oil in 1997 they may need $15.00 today and $40 in the very near future. Much of this may be solved through faster computers, the point is weather your using a slide rule or a supercomputer the volume of engineering, and earth sciences is fixed and growing, logarithmically.

We see today's pricing of oil and gas supports this growing technical requirement. I am not of the opinion that management of oil and gas companies are even concerned about this issue. They have been able to increase revenues and profits for the past 5 years on the basis of doing nothing. Their actions have put us behind the eight ball in terms of delivering this software in a reasonable time frame. It is needed now, and they are all the wealthier by messing things up for the world economy.

Complex Adaptive Systems is a team concept that has enabled the software teams to approach 500% increases in performance, and there will be more in the near future. Applying these concepts to the design and architecture of the Users and CISP will provide similar metrics. And yes, I see the Joint Operating Committee being the Complex Adaptive System that it is. Having an industry operate on these principles is what is required to supply the world with the energy to fulfill what is possible. If your an investor or shareholder in oil and gas and wish to support financially these teams, please join us here. And if your a user that sees this type of application providing the solution to the industry, please join us here.

Technorati Tags: People's Agile-Scrum Development CISP User

Keep an eye on the...

First, I continue to have difficulties with rendering individual pages. This occurs when any other post is selected from the text within a post, the blog archive to the left and through a reader. I continue to work on this problem and please excuse the bug. To access the content on the blog you'll need to go to http://innovation-in-oil-and-gas.blogspot.com. (I also want to highlight yesterday's post of McKinsey video of Jim Wallis again, as I don't think it rendered properly within the feed readers.)

This next week we are moving into the busiest part of the technological companies 2009 full year earnings. Keep an eye on the leaders in the Information Technology space, Apple, Oracle, Cisco, Microsoft and Google. All of these firms, due to the industry that they are in will be reporting spectacular earnings. Google reported on Thursday that their advertising revenues were up and earnings were up at spectacular levels for the quarter. Not bad for an economy that barely functions otherwise.

These earnings are important to show the Users, Producers and members of the Community of Independent Service Providers (CISP) that People, Ideas & Objects is the real growth area of the economy. Last year Professor Carlota Perez published a number of papers that I am in the middle of reviewing. Clearly she has been exactly right in terms of where we are in this economic transformation. Everything that she has been saying for many years is in play and these will be highlighted in my review of her papers.

People don't want to change if there is no need to. The times today show that the industries that benefited from the last 70 years, the era of energy, are challenged not by there demise. Oil and gas will be around for hundreds of years. They are being challenged on the basis of their organizational structure which must change in order to compete. Those that don't follow on with the necessary changes will be left behind. What Perez is showing here is that there are two types of firms in today's economy. The Apples, Google's and Cisco's in new industries that are necessary to bring on the new technologies. And the old industry businesses that need to re-organize in order to become more competitive based on the new Information & Communication Technologies.

National Public Radio published a graph that shows where the future jobs, and in which industries, growth will occur. The graph is based on data from U.S. Bureau of labor Statistics. Although it is difficult to predict what the future will be in these fast changing times. The contrasts are stark. What Professor Perez has shown us is that good data in the hands of a very good researcher can provide a strong road map. Society owes much to Professor Perez.

Professional & Business Service                           +23.3%

Impressive jobs growth but looking into the subcategories of Professional & Business Service shows where and how the Users and CISP will find their skills in high, very high demand.

Scientific Research & Development Services           +25.3%
Computer Systems Design & Related Services         +45.3%
Management Scientific &
                    Technical Consulting Services             +82.8%

Conversely the Natural Resources,
                    Construction & Utilities                     +11.9%

People, Ideas & Objects has followed Professor Perez since 2005. We are in the mode of providing the oil and gas producers with the new way to organize around the Joint Operating COmmitte, the natural form of organization of all producers. If your a Producer that wants to participate in this new era of oil and gas, please join us here. And if your a user who would like to participate, please join us here.

Technorati Tags: People's CISP Change Technology Perez

Open Source, with a twist.

Although People, Ideas & Objects is a project that subscribes to many of the principles of open source software. We don't qualify under any of the currently existing Open Source Initiatives approved licenses. My two concerns regarding this project are that the ability to run the binary of the applications be limited to People, Ideas & Objects exclusively. I am also concerned with the industries desire and behavior of parsing "opportunities" to have multiple companies "compete" for the crumbs they leave for service providers in the oil and gas industry. These competitive strategies have left all of the power in the hands of the bureaucracy as to what and when a project will get funded, implemented and deployed in the oil and gas industry. Name a good oil and gas accounting or ERP application in the market space and you'll see the results of the oil and gas industries micro management of the software vendors. This 1950's style of management is inappropriate for the oil and gas companies to continue. They have enough to do in this new age of costly energy to be concerned with the competitive makeup of any of their service industry providers. Please see the Resource Marketplace Module for further information on how this is handled in the People, Ideas & Objects application.

However, in order to provide the security and stability of the application it needs to be subjected to as many "eye-balls" as possible. This provides the innovative oil and gas producer with assurance that there is no inappropriate code contained within the application. What "our" license will provide is the ability to inspect, test and review the code, but not to run the binary.

At this point in time, lets also be clear of how the application binary will be provided to the innovative producers. The cloud computing concept is in its infancy, but I see no other way then to run an application of this size any other way other then on the cloud. Oracle has recently termed the phrase "industry in a box" and that applies clearly to the application modules of People, Ideas & Objects. The size of this application may have several thousand members of the Community of Independent Service Providers and multiples of this being their employees, millions of users, tens of thousand of producers, hundreds of thousands of Joint Operating Committee's and tens of thousands of service industry firms.

An application of this size can not be undertaken by multiple vendors. The intellectual property that supports the Draft Specification is a result of my six years of dedicated 14 hours per day of research. To come up with a competitive offering someone is going to have to come up with a different hypothesis and build it through research such that it solves the industry problems in similar ways that the People, Ideas & Objects Draft Specification does. This too will take them six years and will have to be done by people who are sworn not to have, or will ever, read any of the material in the Preliminary Research Report, Draft Specification and this blog. Good luck.

Clearly the ability of the industry to sponsor multiple applications like People, Ideas & Objects is not within what could be practically done in the time frames available to them. No doubt management will attempt to do so, and I wish them good luck. Focusing the energies on this one project will be a challenge for all concerned. Diluting our efforts with competing alternatives will only cause the industry to expend more cash and time. This is primarily due to the fact that an innovative oil and gas producer does not garner any competitive advantage from using their ERP system. People, Ideas & Objects focus is to provide the innovative producer with the most profitable means of oil and gas operations.

It is however, not the basis of whether the producer will earn any profits. Their profits are based on focusing their energies on applying their ever increasing scientific and engineering capability toward their unique and mutually exclusive asset base. People, Ideas & Objects provides this natural way of operations but cannot take credit for a producer being profitable when it has nothing to do with the science or assets of the producer firm. What I can assure the innovative producer is that whatever the decisions and assets look like, using People, Ideas & Objects will ensure these assets earn the most profits then either SAP or Oracle. That is People, Ideas & Objects competitive offering.

I am pleased to note that yesterday Sun and Oracle have received European approval for their merger / acquisition. Sun has been our hardware and software (Solaris, Java, NetBeans, GlassFish and others) vendor. Now with Oracle being part of the mix, its important to note that the two technologies of theirs that are being added to this project. The first is the Oracle Database, the place where I was indoctrinated on relational theory, and Oracle Coherence. We will not be using any of the Fusion Middle Ware products and as such are able to maintain the blank slate approach to this most unique of industries, oil and gas.

Oracle and I have a bad history together. They are single-handily responsible for much of the management of the applications intellectual property in this fashion. In 1993 we signed a comprehensive agreement to jointly develop oil and gas systems for Canadian producers. In 1997, after expending mine and others capital, Oracle Energy was announced. We chose to move to make our applications operate with Price Waterhouses oil and gas applications and said good bye to the likes of Oracle. Oracle Energy was quietly put six feet under in 2000. So here we stand, again.

If there is an opportunity to resurrect the 1993 agreement between Oracle and People, Ideas & Objects, I'm there. An application of this scope needs the resources of Oracle to be a fundamental aspect of its deliver-ability, reliability, accessibility and security. The only thing I would ask Oracle to make this happen is they recognize the market space of the energy marketplace is People, Ideas & Objects. Provide me with some compensation for their activities in 1993 to 1997, and together we can make this real.

Oracle stands to earn significant revenues and profits from the licensing of Java, Databases, Computer sales, service and support. IBM also wants this business, however, I feel the market is best served by Oracle and expect that they are the most capable. Oracle, here is my email address. If I here from you before March 31, 2010 the business is possibly yours.

This is why we are Open Source with a twist. For more information on Open Source and its benefits, please review this recent Sun interview. If these strategies resonate with your firm, please support these developments here. If your a user, or maybe want to be come part of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Open-Source Oracle Sun
 

McKinsey, A Conversation With Jim Wallis

In the Preliminary Research Report Professor's Anthony Giddens Structuration theory was reviewed alongside Professor Wanda Orlikowski's Structurational Model of Technology. These suggest that organizations, people and society move together or there is failure. In May of 2004 this appeared to me that the organizations were failing both people and society and that as a result, failure of one of the three components (people, society or organizations) would occur. The financial crisis is the failure of the organizations. They have failed in so many ways it is difficult to list them all. Until today.

McKinsey have an unbelievably good video that deals with this topic. People are angry and do not want to see things continue in the fashion that they are. This is captured in this video very elequently. Enjoy!



Technorati Tags: People's McKinsey Change Orlikowski Code-of-Conduct Community Leadership

McKinsey, Competing Through Organizati...

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.

Technorati Tags: People's Change Management Orlikowski Perez

Technical difficulties with individual posts.

Hello,

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.

Paul

Professor Baldwin and von Hipple VI

To finish off the review of Professor Carliss Baldwin and Professor Eric von Hipple's paper "Modelling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation". I feel it is appropriate to highlight just the final paragraph of the document. It speaks to all that we are working to do for the oil and gas industry.

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.

Please join us here.

Technorati Tags: People's MIT von-Hipple Harvard Baldwin Change

John Bogle on Accountability

The Wall Street Journal has an op-ed written by John C. Bogle, Founder and Former Chief Executive Officer of Vangaurd Group.

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.

Technorati Tags: People's Perez Orlikowski Change Management

And that would make eight.

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.

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