The Preliminary Specification Part XC (RM Part XIII)

I want to continue on with our discussion of the Supplier Collaboration Interface from yesterday’s post. Today’s post will focus on the collaborative manner in which producers and participants in the Joint Operating Committees will engage with the suppliers and the importance of the interface in the innovative oil and gas industry. This process is complex and I hope that I’ll describe it well enough that it reflects how critical this interface is.

Oil and gas is a business that is based on the earth science and engineering disciplines. Everything in the field is derivative of these facts. Innovation is based on the understanding of the sciences and in turn will lead to further advances in the sciences. As the industry becomes more innovative the need to be mindful of these facts becomes more common in the approach that is taken. The understanding that is required to undertake the most basic of operations requires significant educational and work experience to do it safely and correctly.

The innovative changes in the industry are mapped through the People, Ideas & Objects software application modules in the following manner. People with the ideas for new products and services write about them and earn the rights to them by publishing them in an industry wide blog in the Research & Capabilities module. And as “knowledge beget capabilities beget action” producers develop their capabilities around their land and asset base. Capturing these capabilities within the capabilities interface of the Research & Capabilities module. This then is organized based on geological zone and the Joint Operating Committee which has certain producing geological zones, has access to its producers capabilities from their Research & Capabilities modules, for those zones. The JOC is then able to learn from the producers what has and hasn’t worked through the proceeding process and are able to apply the process successfully and document it in the lessons learned section of the Knowledge & Learning module.

This process has been documented in the Preliminary Specification in the modules to date. The issue that we are concerned about is with the last sentence. The part where it says “able to apply the process successfully” will undoubtedly require the interactions with the supplier. Recall Professor Dosi notes that innovation is developed through the interactions between the “capabilities and stimuli” and “broader causes external to the individual industries such as the state of science”. Working within the science and innovative products and services of the oil and gas industry as they develop demands this interaction. The interactions between you and the supplier are important but just as importantly are the interactions that all the producers have had with the supplier. To have these interactions reviewable makes it substantially less risky for the producer and provides a forum where he / she can have their concerns aired.

Why are we developing the Supplier Collaborative Interface. I think that most people understand that doing the same thing over and over is easy. Making the organization change its routine is difficult and when the change is introduced is when the trouble begins. If we could just leave things the same then we would be better able to produce the oil and gas that we need. Unfortunately those days are gone and the routine in oil and gas is anything but. Professor Dosi notes the following point about this difficult situation.

Organizational routines and higher level procedures to alter them in response to environmental changes and / or to failures in performance embody a continuous tension between efforts to improve the capabilities of doing existing things, monitor existing contracts, allocate given resources, on the one hand, and the development of capabilities for doing new things or old things in new ways. This tension is complicated by the intrinsically uncertain nature of innovative activities, notwithstanding their increasing institutionalization within business firms. p. 1133

Tension and the uncertain nature of innovative activities says it well. The ability for the producer to mitigate these through the Supplier Collaborative Interface is the reason for this critical interface of the Resource Marketplace module.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part LXXXIX (RM Part XII)

In today’s discussion regarding the Resource Marketplace module of the Preliminary Specification I want to talk about the interface that the suppliers will use to get their message across to the producers. Many of the vendors will have web sites in which they maintain a host of information regarding their products and services, however, these are mostly static and provide little opportunity for the supplier and the producer to interact. The alternative that provides for that interaction is contained in the Resource Marketplace module and for purposes of identification we will call this the “Supplier Collaboration Interface”.

In our review of Professor Giovanni Dosi paper “The Sources, Procedures and Microeconomic Effects of Innovation” we learned that technical trade-offs facilitate the ability for industries to innovate on the changing technical and scientific paradigms. Crucial to the facilitation of these trade-offs is a fundamental component that spurs the change and is usually abundant and available at low costs. For innovation to occur in oil and gas, People, Ideas & Objects assert that the ability to seek and find knowledge, and to collaborate are two “commodities” that are abundant today. With their inherent low direct costs, knowledge and collaboration are the triggers for a number of technical paradigms which will provide companies with fundamental innovations.

I want to be clear that I see this interface as being completely different from any of the others that have been listed here before. The one that may seem to be the most similar would be the blog in the Research & Capabilities module where people are authoring “new” ideas and technologies on a stand alone basis. That blog is not done on a collaborative basis but is based on the research efforts of a few individuals or groups. What is being proposed in the “Supplier Collaboration Interface” is a collaborative interface that will invite the entire producer community to participate with the specific vendor to discuss that vendors products and services. These discussions will build on the whole communities involvement and define the vendors offerings in a collaborative manner.

The wiki style of this interface will cut down markedly on the volumes of email that are generated between vendors and producers. Much of this email being of the same context. Finding the knowledge that is needed is the key to resolving the problem, and if the producer knows that a centralized wiki format exists in the People, Ideas & Objects Resource Marketplace module that will be their first choice to turn to. It will pay the supplier to invest their time and energy in maintaining the collaborations with the producers in this Supplier Collaboration Interface style wiki, as that will be the first line of customer service. Complaints as well as accolades will show up and be evident to those that visit the site and therefore the response to those comments will be of concern to all of the producers.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part LXXXVIII (RM Part XI)

Yesterday’s post documented the different interfaces that related to and would source their data from the Resource Marketplace module of the Preliminary Specification. In today’s post we want to discuss how that data is input and maintained, and most importantly who is responsible for that data.

The data in question is the plain generic contact data that is used in business every day. There are other attributes such as the information needed for processing of payments into the vendors bank account. The majority of this data can be sourced from the suppliers web site, except it won’t be sourced by anyone. That is to say the supplier will maintain their own records in the Resource Marketplace module of People, Ideas & Objects software application.

Since we are a “cloud” based offering we have centralized the processing for the producer clients of People, Ideas & Objects in one location. The need for each producer firm to have detailed records of each vendor that they have worked with will be unnecessary as each supplier will maintain their own record within the Resource Marketplace module. This will save immeasurable amounts of time and errors made in inaccurate records and in duplicating the same information from producer to producer. Each supplier is motivated to ensure their data is correct. If a supplier makes a change of address, then they’ll know the best time in which to make the change to their Resource Marketplace records.

What will need to be done is for the People, Ideas & Objects user community to identify and document the various data elements that are needed in this Resource Marketplace “Supplier Interface”. This will need to include the data and information needs of the interfaces that were documented in yesterday’s post. Which will also include the ability to quantify and qualify the role the supplier and the producer can play when designing transactions.

Recall that the supplier will have many of the same accounting and processing needs as the producer. The objective of People, Ideas & Objects is to ensure that the producer attains the most profitable means of oil and gas operations. That involves the service industry, and therefore we need to have the ability to provide some of the same services to the service provider in terms of processing and accounting as the producer. This processing for the service provider will ultimately lead to lower the costs for the producers.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. 

The Preliminary Specification Part LXXXVII (RM Part X)

Within the Resource Marketplace module we have detailed what we have called the Actionable Information Interface. This being a central location for producers and vendors to post actionable information about their firm for others to respond to. In terms of the other interfaces that have been detailed in the Preliminary Specification so far, how does this interface fit in, and what role does it fill in terms of the other activities that are taking place in other modules. This blog post hopefully will clarify some of the different perspectives on the data and information that passes through, and is generated in the Resource Marketplace module.

The next interface that would follow the Actionable Information Interface would probably be the blog posts which is part of the Research & Capabilities module. Recall that these blog posts are authored by the people in the Resource Marketplace who are developing new and innovative products that they are working on. The act of publishing these ideas on this site provides the author with the opportunity to earn the copyright and other Intellectual Property rights. I see these ideas being a development of the actionable information contained in the Resource Marketplace module. The ideas being a codification of the market demand for new and innovative products.

The Accounting Voucher module has the interface for designing transactions. The ability to design the transaction to achieve the greatest organizational efficiencies for both the Joint Operating Committee and the vendor will provide significant value add for those in the oil and gas industry. Determining which vendor conducts which operations, when, where and how and then having the system automate as much of the process after the design is completed.

Lastly there is the interface for the processing of payments. This processing is part of the Accounting Voucher module and as we can see with all of the interfaces in this post today, all have a strong interaction with the Resource Marketplace module. What we need to capture in the Resource Marketplace module is the data and information that allows these other modules to operate. That is a critical function of the Resource Marketplace module. This point is what we will cover in the next few days discussion.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part LXXXVI (RM Part IX)

In today’s post I want to point out two small items that should be reinforced and then go on to the main point of today’s discussion regarding the Resource Marketplace module of the Preliminary Specification.

The first item to note is that the Resource Marketplace module is both a producer and Joint Operating Committee facing module. That is to say it will be used in the producer organization for human resources, payroll and for securing the resources that the producer needs. And will be used by the JOC for the field products and services that are needed there. It may be obvious to some that this is the case however, I am stating this for the purposes of clarity.

The other item pertains to the all of the modules in the Preliminary Specification and that is by right clicking the mouse will bring up a contextual menu of options that the user can select an appropriate action from the People, Ideas & Objects software application. Whether this is a Work-Order, a Purchase-Order, AFE, or any of the other documents that are managed in the system. This will be available to the user through this facility.

Now on to today’s topic. Yesterday we discussed the posting of actionable information in the “actionable information interface” of the Resource Marketplace module. A place where service industry providers and producers were able to post actionable information in a centralized, search-able and analyzable database. Most importantly we noted that this was an important starting point of the process of innovation. It is an underlying assumption of People, Ideas & Objects that high commodity prices are financing enhanced innovation at the producer level. Therefore the need to stimulate innovation between the producers and the service industry starts with this actionable information.

In addition to the funds necessary to finance innovation there are what Professor Giovanni Dosi calls “technical trade-offs”. These trade-offs facilitate the ability for industries to innovate on the changing technical and scientific paradigms. Crucial to the facilitation of these trade-offs is a fundamental component that spurs the change and is usually abundant and available at low costs. For innovation to occur in oil and gas, People, Ideas & Objects would assert that the ability to seek and find knowledge, and to collaborate are two “commodities” that are abundant today. With their inherent low direct costs, knowledge and collaboration are the triggers for a number of technical paradigms which will provide companies with fundamental innovations.

Professor Dosi states “In very general terms, technological innovation involves or are the solution to problems.” Dosi goes on to further define this as “In other words, an innovative solution to a certain problem involves “discovery” (of the problem) and “creation” since no general algorithm can be derived from the information about the problems. Solutions to technological problems involve the use of information derived from experience and formal knowledge. It is the specific and un-codified capabilities, or tacit-ness” as Professor Dosi describes “on the part of the inventors who discover the creative solution.”

This is the point that I wanted to make in this follow on post to the “actionable information interface”. Where will the innovative solutions come from? Who will solve the problems? It will come down to the person who first sees the problem. And that person may be situated anywhere within the industry. He may be the vice-president of production at mega production company. Or he might be like Steve Jobs who starts out in his parents garage. The point is for the industry to be all inclusive and to have the problems being identified by those who can see them and resolve them with their innovative solutions. I wonder what reading the actionable information interface of 200 producers would provide in terms of seeing what and where the problems were?

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part LXXXV (RM Part VIII)

Our main objective in the People, Ideas & Objects software application modules is to identify and support the innovative oil and gas producer. It is within the Resource Marketplace module that I continually run into the conflict that is currently in the marketplace between the producers and the service industry. This conflict is the issue that the Resource Marketplace module must therefore seek to resolve by first opening up and developing the actionable information that is available within the marketplace.

This actionable information can be captured in an interface that is similar to any contact database. The actionable data can be plans and aspirations of the service industry provider in the short to mid term. For example, if they were a small drilling rig company looking to acquire a new rig they could post within the actionable information area of the database, that they were actively looking for producers within a certain geographical region to contract for drilling in the third quarter of 2012. Producers seeing this could then see this opportunity and evaluate it on the basis of further discussions with the vendor. The drilling rig company, having contracts in hand from the producers is then able to secure the financing and purchase the rig they have specified.

Actionable information can also be from the producer who might be approaching the start-up of a large project and will be looking to staff up to meet the demands. Or a producer may be wanting to develop in a new remote area and needs to have more infrastructure in place. Expressing a need is the first part of having the solution provided. As simple as it may sound this is the beginning of the process of innovation. Professor Giovanni Dosi notes.

Thus, I shall discuss the sources of innovation opportunities, the role of markets in allocating resources to the exploration of these opportunities and in determining the rates and directions of technological advances, the characteristics of the processes of innovative search, and the nature of the incentives driving private agents to commit themselves to innovation.

Centralizing this information within one location will help to provide the users of it with its ease of use. Lets face it, this information is available on the web in some form if you dig through each companies web site and impute what they mean from their plans. By stating clearly what their actionable plans are within a central database will make it easier for the users to access. The innovation comes about when the plans are not set and the ideas and opportunities are able to flow. Secondly People, Ideas & Objects can throw some processing power at this information and give the user some tools in terms of analyzing this information. Using the Google Appliance to aid in search. Analytical tools to analyze the data.

I want to make clear that this actionable information interface will be different from the interface that is in the Petroleum Lease Marketplace module. Recall there is an interface that takes the capital expenditures of the firms for the next few years, primarily from the AFE and reserves reports, scrubs any proprietary information from it, aggregates all of the producers data and publishes it based on general geographical region. This provides the marketplace with a general understanding of the size of the marketplace in the next few years. And is different from the detailed and producer / vendor specific information that is contained within the actionable information interface. Also recall that this interface is the critical part of the process that begins here and continues through the Research & Capabilities and Knowledge & Learning modules.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. 

The Preliminary Specification Part LXXXIV (RM PartVII)

We begin now on our third pass through the Preliminary Specification. Starting once again with the Resource Marketplace module. The one area that I think there might be some confusion is the area where people earn their rights to Intellectual Property (IP). I think we have documented in fairly good detail how people can earn their rights in both the Resource Marketplace and Research & Capabilities modules of the Preliminary Specification. What I want to discuss in this blog post is, why is this a good thing for the producers?

As a review we noted that the big problems in oil and gas were not going to be solved until the incentive structures were aligned towards those that solved the problems. Today, in the service sector, the oil and gas industry exploits the lack of identifiable Intellectual Property (IP) by more or less ignoring it and passing it around to other firms in the service sector and its competitors. This lack of respect to those that developed the ideas has brought about a situation where the service providers have ceased to innovate or sponsor any new start-up firms as competition. The producers are the ones that are losing as they are unable to have their needs met by a diminishing capacity in terms of the service industry.

The situation has become so dire as their is little to no research being done and no start-up opportunities in the oil and gas service sector. The exact reverse of what you would think would be needed at a time like this. The oil and gas producers are reputed to be so difficult to work for that securing staff makes it all but impossible to start a firm, and even if you could start a firm, the producers would only look down their nose at you and scoff. Such is life in the rarefied air.

Nonetheless, whats in it for the producers to accept that the IP should pass from their hands to those that will take the time, energy, financial and intellectual risk to solve the producers problems? If we go back to one of the base assumptions that the People, Ideas & Objects software is operating under. We find that the competitive advantages of the producer firm are its physical assets and land base, and its earth science and engineering capabilities. Where in this competitive advantage does any product or service of the oil and gas service industry provide any value to the producer?

The means to acquire, explore, exploit and produce oil and gas reserves are how the producer makes money. That should be pretty obvious, but on the basis of how producers currently manage IP in the industry, they seem to think that drill bits and drill rigs are their future competitive advantages. What the producer needs is the most advanced and dynamic service industry marketplace that is innovative and productive and fiercely competitive in order for it to achieve its optimal productive output. What the producers should ask themselves is what the hell have they got themselves now?

A cultural change of this scope will be difficult to implement. Add this cultural change to the numerous other cultural changes that parallel this scope and you have an idea of the difficulty that lies ahead. These are the difficulties for the management of the producer firms themselves. They are the ones that have to change. And I can’t see that happening. Its a matter for Schumpeter’s creative destruction to sweep out the old and bring in the new. The new being of course the eleven module Preliminary Specification that deals with IP in the manner that will allow for the difficult problems to be solved. Until then we continue to write and grow.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. 

The Preliminary Specification Part LXXXIII (General Part I)

We have now made two full passes through the Preliminary Specification generating 82 blog posts. Ultimately how many posts will be generated through this process is unknown at this time, however, I think there is significant value being generated for the user community. Therefore we will continue on for a while longer. I want to take some time today to talk about the general nature of the Preliminary Specification and the comprehensive nature of the solution. This I am sure is on every ones mind and these are my thoughts on the topic.

Whether we are talking about the possibility of a multi-billion dollar software development budget or the scope of the eleven modules, People, Ideas & Objects is big. Or dealing with multiple jurisdictions and many geographic regions adds a layer of complexity that is difficult to quantify. Making the application bigger, more complex and costlier then anything that has been contemplated before in oil and gas. It seems in many ways to be all things to all people.

It’s important however to remember that it is not all things to all people. One of the purposes of the Preliminary Specification is for the user community, of which the oil and gas producers are a critical member of, to determine the scope of the application in its initial commercial iteration.

What I am providing by initiating the discussion in these blog posts of the Preliminary Specification is to detail a vision of what is possible based on the research conducted to date. This vision could ultimately be used by the user community, however may not be available in its initial commercial release. That is for the user community to decide.

Lastly to address the scope of operations of the application I would ask, how successful have the alternatives been working out for you? That cobbling together that the bureaucracy has been doing should be ready for an upgrade soon, should it not? What’s the vision of your current ERP systems. The fact of the matter is that IT should never be about the technology. It should be about your business. And that is what we have focused on at People, Ideas & Objects.

The fact of the matter also remains that as soon as we recognize the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer the systems infrastructure has to be this way. Recognizing the partnership demands certain assumptions are given. Assumptions such as the role of operator will fade, organizational participation will increase, etc. As soon as you adopt the logic of building a system for the innovative oil and gas producer you end up with a suite of functionality that is the eleven module Preliminary Specification.

Can this be done? I don’t see any alternative. The ability of the industry to take what we have today in terms of its productive output and move it to a higher level of performance is a difficult task. What we have today is deceptively sophisticated and if we aren’t careful we could lose some of that capability without realizing it. Using a higher level of specialization and division of labor are a necessary part of the next level of performance. Does anyone believe that that level of performance will arise from spontaneous order and appear with out the role of software defining and supporting it?

We have a big job to do. Lets get it done. Tomorrow we start on our third layer of the onion, the third pass through the Preliminary Specification.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. 

The Preliminary Specification Part LXXXII (C&G Part X)

The innovative oil and gas producer is supported through the People, Ideas & Objects application modules. Their innovativeness is what the system was designed to achieve. This is based on the fundamental belief that the higher commodity prices are financing greater innovation and the most innovative producers will be the most profitable. However, as we know with innovation there is an amount of failure that is a natural part of the process. Therefore with greater innovative success there will be greater failure. This blog post deals with the governance of failure within the producer and Joint Operating Committee and how it is handled in the Compliance & Governance module of the Preliminary Specification.

The first thing we should do is define these failures in their proper context and call them what they are generally referred to as lessons learned. These will be documented in an area within the governance section of the Compliance & Governance module for review by those who are deemed authorized to review this information. As we discussed yesterday, a producer may have hundreds of interests in Joint Operating Committees located throughout the world. The ability to know what works and what doesn’t work, where the lessons are learned on a daily basis would be a valuable resource for a firm. Recall in the Knowledge & Learning module these lessons learned are being captured in each of the Joint Operating Committees. What the Compliance & Governance module does is aggregate these lessons learned from each of the JOC’s that the producer has an interest in and presents them in a database with all of the other JOC’s they have an interest in.

The point of this exercise is to try and avoid the simple problem of doing the same thing over and over and expecting different results. If the firm knows that a certain operation is unsuccessful then it should cease to conduct that operation. Very simple in concept, very difficult to implement. With each of the producers within a JOC having access to the lessons learned the more eyeballs that see these, the less they might occur. Nonetheless the lessons learned are somewhat after the fact in terms that the horse has escaped, it is worthwhile to know the information for others to avoid the same situation. I would think that it might be policy that a firm require their designates to the JOC report via the lessons learned interface all material deviations in operations. This would update the Knowledge & Learning for the JOC and the Compliance & Governance modules for each of the producer firms so that learning could be spread as far and as quickly as possible.

It was through our research that we discovered an interesting anomaly. Do these collaborations within the JOC create a leakage of proprietary knowledge and capability from one producer to the other? The question therefore becomes how is this proprietary information and capability deployed on an as needed basis? Professor Giovanni Dosi notes that “although the free movement of information has occurred in industries for many years, yet has never been easily transferable to other companies within those industries. The ability to replicate a competitive advantage from one company to another is not as easy, and may indeed be not worthwhile doing.” Dosi (1988) goes one step further and states, “even with technology license agreements, they do not stand as an all or nothing substitute for in house search.” A firm needs to develop “substantial in-house capacity in order to recognize, evaluate, negotiate and finally adapt the technology potentially available from others.” Therefore why not focus on the need to increase the companies own unique and specific sources and directions of competitive advantage. This also imputes that the free flow of information between producers through collaborations in the Joint Operating Committee would increase the knowledge, yet not expose anyone of the specific organizations to any specific losses of key knowledge, proprietary information or capability.

Within a JOC each producer is entitled to this information irrespective of the origins of the information. What is needed is the means to mitigate the losses that might occur by repeating the same mistakes on a corporate basis. The ability to learn from its mistakes should be a strong part of any corporate governance module and that is why it is included here in the People, Ideas & Objects Compliance & Governance module.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part LXXXI (C&G Part IX)

Throughout our discussion of the Preliminary Specification we have been describing two distinct organizational structures. The producer firm and the Joint Operating Committee. Up until now we have focused the Compliance & Governance modules discussion on the producer firm. The manner that the Joint Operating Committee is operated through the People, Ideas & Objects software application modules is to identify and support the seven frameworks that the JOC naturally defines. The question therefore becomes how does the producer firm maintain governance over the producers working interest share of the Joint Operating Committee?

First we have the Military Command & Control Metaphor that is needed to be adopted across the organization so that producers within a Joint Operating Committee can pool their human resources, and impose a chain of command, control and governance over those resources. This pooling is done to offset the shortages of technical resources in the earth science and engineering fields that we have discussed here before. Since the pooling is comprised of resources from multiple producer firms the governance over those resources in the Joint Operating Committee is deferred to the Committee itself.

Each Joint Operating Committee is governed by their own agreement, operating and accounting procedure in most instances. These are the documents that are used to provide the operational means for decisions, policies and procedures to be used. The influence of one producer to skew the results of these decisions, policies and procedures may occur if they have a high percentage of the voting rights during the establishment of the agreement. Other then that the Joint Operating Committee will be left to operate based on the parameters that have been set and have minimal need for voting on these points in subsequent years. Where they will be active is in the budgets and the decisions as to the directions as to what and where the facilities should be developed. For this there are mechanisms to deal with the (non) participation of other producers and these will be documented by the JOC.

As we can see the voting rights the producer has in the Joint Operating Committee is the extent of their influence in the day to day business. Other then their determination of the amount of capital they will be expending the JOC will operate in a completely autonomous fashion based on the parameters that were agreed to by the founding producers. Yes there are voting rights and those may be significant in terms of their influence over the outcome but the producer organization and the JOC are two separate organizations for all intents and purposes.

Nonetheless, the need to ensure that the governance of the operations of the JOC are within the normal scope of operations are a responsibility of the management of each of the producer firms. How then can the governance of the producer be extended over the JOC in a manner that meets this criteria and respects that each producer in the JOC will have similar concerns.

When a producer adds up the number of JOC’s they have an interest in, it could easily number in the hundreds. The simple management of hundreds of properties operating on a semi-autonomous basis presents its own issues and opportunities. Documenting all of the activities that occur within the JOC is not the issue. This would be the easy part of putting an interface over the various data elements and presenting that within the governance section of the Compliance & Governance module. I think we have to get more sophisticated then that and start capturing the activities and actions that are occurring within the JOC’s. Every time there is a vote the results of the vote are reported through to the governance interface to each of the partners. Every time there is an election, a non-participation, capital expenditure decision, etc., its reported through to the governance interface to each of the partners. Then the users of the data have a summary of the actions that took place in those number of JOC’s and can determine if any of the actions require their further attention.

Having the actions of interests and the documentation that backs up the actions taken would provide a good starting point for each producer within a Joint Operating Committee. There the user could take further actions themselves if the governance of the JOC was in some way contrary to the policies and procedures of the producer firm.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.