Specialization and the Division of Labor

We noted recently the ability of specialization and the division of labor to enhance the producers profitability. What we want to discuss in this post is how these tools will be applied during different phases of software development to enhance the profitability of the oil and gas industry. Access to the tools of specialization and the division of labor are provided through the use and application of the decentralized production model. By changing the prototypical footprint of the producer to the C class executives, the earth science and engineering resources, some land and legal, and support services. The remainder of the firms resources are permanently moved to service providers who are focused on a process or subprocess that uses the entire oil and gas industry as its client base.

Then as a result of having the process managed for the entire industry under one roof, the scope and scale of the service providers operation can deal with application of specialization and the division of labor in its optimal application. It will be the movement of the people from the producers to the service providers in the first phase of the developments of the Preliminary Specification that provides initial value to the producers. However there will be a secondary phase of equal or greater value that will be attainable in the second phase of development that will be undertaken once the Preliminary Specification is fully developed.

By this time the service providers, the user community and the People, Ideas & Objects developers will have become familiar with the manner in which the industry operates with their new software. And the service providers will have an understanding of the process they manage as to where the efficiencies and difficulties are. They will then be able to determine what is the optimal way in which to execute the process on behalf of industry, both in terms of costs and in terms of quality of service. Further iterations on the process can then be conducted from there.

This process of specialization and the division of labor has been limited in its value to the industry over the past number of decades. What a producer has had to achieve in terms of their administrative and accounting capabilities has been fixed and determined based on regulations and professional requirements. The scale of their data set in terms of preparing royalty calculations, for example, has been determined based on the number of properties the producer has, designating the number of accountants it needs. Each accountant conducting the same tasks for each property. There being no benefits that can be obtained from specialization and the division of labor due to the fact that these tools were not and could not be used. No matter the size of the producer firm.

In the future with the Preliminary Specification in place. The service provider will look at the process in a different manner. Understanding the same regulations and professional requirements are in place. They will have the computer power, the software development capabilities and software of People, Ideas & Objects, application of advanced scientific methods and the ideas, innovations, collaborations, creativity, research and resolution of issues of the people at that service provider to process the industries royalties each month. And the same will be the case at each of the service providers for the individual processes that they manage on behalf of the industry.

It will be in the second phase of development, after we have completed the Preliminary Specification. That we will be able to concentrate on developing software that focuses the service provider on the most efficient processes that the producer will see another bump up in their profitability. The first coming from the fact that the decentralized production model is in place, the second from the full use of specialization and the division of labor.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Why Focus on Profits

We have been focusing on profits here at People, Ideas & Objects and making them the key focus of the user community and our service providers. Why is it that we are providing the oil and gas producers with the most profitable means of oil and gas operations. It is certainly a position that is counter to the culture of the industry. In that the industry operates on cash flow. Net earning do not hold much appeal to those that operate within the industry. Yet, as an investor, I am interested in investing my money in businesses that are proven to produce profitable operations. I have a broad choice of industries and businesses to choose from and oil and gas is but one of many that I assess on the same basis as the others.

Its a competitive investment marketplace for any oil and gas company to compete in. If a producer goes to an investor with performance showing the lack of profits for the last five years, they will receive a cool response. And the argument would be that you have to talk to someone who is familiar with the nuances of the oil and gas business. And in a cottage industry that is true. But when you compare the opportunity to invest in Apple, which is wildly profitable, oil and gas is a poor second cousin who can’t compete for the top tier investor.

The argument that would then be put up in defence of the producer would be that Apple will be subject to declines as a result of their innovative technologies running their course. And that is true, one day that will happen, just as the iPod is not what it once was. But for today they are very profitable with iPhones and iPads and they are earning money that they can then invest in their business to develop the next iteration, and the next innovation. This can be done without having to go to the investment community, or a bank to make those investments. They have the cash in hand, and a profitable business that drives those investments in future innovations and that keeps them in the marketplace that they choose to be in. Investors win by earning profits, upside on future innovations. All without the costs of having their investments diluted by adding new shareholders to finance basic investments.

What the oil and gas producers do in the current environment where they rely on cash flow is make themselves wholly dependent on others investment or banking practices to do the next deal. They have no discretionary capabilities in terms of how they will grow the business other than to go hat-in-hand to their benefactors or banks. This may have seemed like a reasonable business model when the business was in a development stage. However, as a primary industry with $3.5 trillion in revenues, to continue to operate it as a cottage industry is, I think, beneath the industries stature. Investors lose by not participating in a profitable industry, continually supporting their investments with more capital or watch their investments get diluted by further investments by others.

The focus on profits will provide the independence for the producer to pursue their optimal course, whatever that is. It might very well be a stand still strategy of not growing but maximize the profits from the assets that they have. The fact of the matter is that they will generate the resources necessary to open opportunities for the future, and also have the profitable operations as a secondary resource to depend on to keep that engine running. They won't have to go to the investors to ask for money or the banks, they will be able to operate with a certain level of independence. If you don't like shareholder activism, give them what they want, profits and earn a high level of independence from them. They'll be happy with the profits and the fact that they're interests are not being diluted by each years stock offering.

This is the reason the industry needs to adopt a model that focuses on profits. And only the Preliminary Specification with the decentralized production model can provide the industry with the most profitable means of oil and gas operations. First by making the industry a price maker, instead of a price taker. And then secondly through the expansion of the industries capabilities through specialization and the division of labor. I suggest we develop the People, Ideas & Objects Preliminary Specification and user community and provide the oil and gas industry with an alternative means of organization. Then we can begin generating some real profits.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Previous Failures to Learn From

In our last post we discussed the possibility of the bureaucracy failing or quitting in the oil and gas industry. In this post I want to discuss some of the failures that we have seen and relate them to the current situation and show where we are in terms of a potential failure and how dire the consequences can be. The two examples are of course the former Soviet Union and the great depression where government had to step in and take a more pronounced role in the economy.

Some readers may take offense to the comparison of the current situation to the former Soviet Union. We'll see. The collapse of the Soviet Union came about when production of everything fell into steep decline. The primary reason production was falling was that all of the workers were at the bakery waiting in line for bread. Which there was none, and had been of very limited supply because of the steep decline in production. A catch 22 of the highest order. Without anything to eat the country declined precipitously and rapidly. The simple solution would be to make more bread, which of course could not be done because of the dependence on the system that was breaking down.

In the oil and gas industry we have a similar situation today in that everyone produces natural gas, and oil, at capacity. As a result of oversupply, the prices have declined for the past five years to the point where capital is being destroyed on a wholesale basis. An industry that destroys capital is not fundamentally different than a society that is starving. The real tragedy in oil and gas today is that this destruction of capital would be considered news. At least in the former Soviet Union they knew they were starving. The simple solution is that everyone scales back their production by a small amount, say 15% in order to return prices to a normal threshold. This like baking bread is apparently impossible to do. And therefore the cannibalization of value in the industry continues.

The other example of the failure of the bureaucracy was during the great depression. Who knows what the cause of the depression was. Whether it was tight money or trade wars or both it is still argued today. The fact is that businesses large and small failed. And those that didn’t fail scaled back severely to conserve cash and survive. Management who were new to the scene, in that they had just taken the reigns of power from the merchants. Didn’t have a vested interest in the game at that time. And were quick to seek greener pastures elsewhere. Precipitating a further decline in the performance of the firms in which they left. With society experiencing homelessness and hunger, government became a new force in the economy and has been vigorously debated as to its purpose in doing so, since.

With the destruction in value in the oil and gas industry the bureaucracy are losing their incentives to keep at it. Losing value in the industry will eventually affect them and they will have little in the way to keep them from looking to greener pastures in the many other industries that exist today. They are not builders and they are not movers & shakers. They are able to maintain the status quo and keep things at an even keel. If things go wrong its not their fault and they usually move on as opposed to address the skeletons in their closet.

What will stop the destruction of value in the oil and gas industry today? It is the elimination of the attitudes of the CEO that after I pay all my bills and I still have cash left over, positive cash flow, and therefore I am successful. Earnings don’t enter into the mindset of anyone in the industry. That investors and banks only give out free money. That a write down of assets doesn’t affect my cash so that is not a bad thing. This attitude is laughable if it were only played out in a schoolyard. The fact that it is played out in the oil and gas industry is evidence of how serious this problem is and the sense of urgency that this user community should look towards building an alternative means of organization for the oil and gas industry.

Continued value destruction at the level that the industry is currently incurring in the North American marketplace is not sustainable. Yet this is not considered an issue by the bureaucracy. This continued value destruction may lead to failure or to the bureaucracy leaving the scene. What we can do is continue on in an oblivious manner to a systemic, generational, ingrained and illiterate understanding of how this business operates. Or begin developments of the Preliminary Specification and begin the process of building profits and value once again.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Brick by Brick, and Stick by Stick

People, Ideas & Objects have ambitious plans in terms of what we are setting out to do. Using Oracle Fusion Applications with the Preliminary Specification as a vision of what the industry could operate as, and the user community vision providing the means in which it would operate. How is it that this user community is going to develop, and particularly without the help or resources of the industry as it stands today? Well the long and short answer is I don't necessarily know. It hasn't been done before, and what we are setting out to do will have never even been tried before, anywhere. What I do know is that it will be built brick by brick and stick by stick over the next five years, and lead into the time we start the software developments in 2019. Thats the plan.

What I am finding is that there are not a lot of people in oil and gas that are using Twitter. That is both a good thing and a bad thing. I assume they are using Facebook as their social network and the majority of that use would be for personal reasons. For us to use Facebook would therefore interfere with the personal nature of that medium and by using Twitter we are establishing a purpose built network for the user communities needs. Therefore your first step should be to set up a Twitter account and Follow @piobiz as the beginning of this user communities development. Then we can have a means in which we can communicate with other members of the user community and the beginnings of the collaborations can begin. Don't expect too much at first, this is just the beginning, and we have a lot of work ahead.

Our objective is to establish the capabilities necessary to provide the oil and gas producers with the means of organization for the oil and gas industry. If the bureaucracy was to fail completely in the near future. Or if they just decided they had had enough and quit. Not something to take lightly, that has happened before. Then our capabilities would be something that the industry could turn too to provide a solution the industry found itself in. And in turn would find a group of like minded people committed to providing the oil and gas producer with the most profitable means of oil and gas operations. Complete with a technological base in Oracle, and a product vision in the Preliminary Specification. This is what I think it will take in order to make the change away from the current muddling along strategy and the mindless, self-centered bureaucracy.

The need for change in the oil and gas industry has been evident for many years. And it hasn't happened. Low natural gas prices are not even seen as an issue by the bureaucracy. They certainly have no plans to deal with any of the problems that the industry is facing. And technology is used in its most basic and elementary way. I have been an outcast for over ten years now since I published the idea of using the Joint Operating Committee as the key organizational construct of the innovative producer. Plenty of time for industry to have acted positively. But they never will as it eliminates the bureaucracy as its key side effect. That and we use the Internet which also reduces the demand for the bureaucracy. Two good reasons that the bureaucrats will never fund these developments. They will either fail, as a result of their inability to deal with the speed and complexity of the business, or they will quit through attrition, retirement or greener pastures. They are more dangerous than useful at this point in time.

And that is why we need to organize ourselves now. To ensure that the industry will be able to continue to function. This all sounds quite surreal and probably a bit on the crazy side of the scale. I however would prefer we had a solution available for the marketplace to pick up when the bureaucracy does decide to take that permanent vacation.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

The Three Building Blocks

The power in which the industry is operated. That is who is running the show is currently held within the bureaucracy. That low pitched hum which is occasionally interrupted by the grinding of gears is the quiet droning on of our favorite people. If you want to make a change to the business model in which the industry operates? You'll have to talk to, well there is no one. And there is no way in which you can make any changes. It is what it is. You muddle along and hope for the best. The industry has always survived and will be around tomorrow, so just carry on. The problem is it isn’t working anymore. Now that may just be my biased opinion, but the industry has a problem with its profitability. And the bureaucracy has no answers.

What I have proposed is that we replace the bureaucracy and put in place the user community and People, Ideas & Objects. It will be this user community that will have the power to effect the changes to the business model that the industry operates on. What we have proposed is the Preliminary Specification and the decentralized production model as a start. The control of this business model will be in the hands of the user community. It is they who will have the power in the industry when the bureaucracy is removed from the landscape.

It is also the user community that the industry will turn to in order to have their changes made. They will be the ones to go to, unlike the bureaucracy who have no one. The user community will be able to take the industries input and effect the changes in the business model to accommodate the industries needs. That assumes of course that the industry and the specific producers participate in the user community. The user community is open to all within the industry, however, there are requirements of the participants.

The user community also has a budget. And not just any budget, a budget that is similar in its makeup to People, Ideas & Objects budget. Please review our Revenue Model for a better understanding as to the differences in our budgets makeup. In essence we are not blind sleepwalking agents of anyone who will feed us. The Revenue Model is based on the Intellectual Property of the Preliminary Specification which determines what is required in terms of software development, as dictated by the user community, and the user communities costs. It is those determining factors that set out the budget for both organizations and then determine what the fees will be for the producers to use the software. The software and user community that provides the producers with the most profitable means of oil and gas operations.

These three components make up the fundamental power that the user community has. Control of the business model, the key point of contact for changes, and their own budget based on its needs makes this user community not your grandfathers user community. With this power comes the associated responsibility of operating the industry. And providing the industry with the most profitable means of oil and gas operations. One day the bureaucracy will be gone. They will either fail or just give up. Either way the industry will be looking for an alternative means in which to operate. I am proposing that we organize ourselves on this basis.

We have at this time selected the Oracle Fusion Applications and the complete Oracle stack of technologies as the technological base for our solution. We have a product vision contained within the Preliminary Specification. And now we have this user community vision in which to build the user community to operate the industry upon. I think we are a formidable alternative to the bureaucracy. We need to organize ourselves to make this opportunity real. The industry, I think, is in desperate need of a solution and the bureaucracy has no plans, hopes or prayers.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Greater Science and Innovation With the Work Order

I am thinking that our focus has been on the user community development and the decentralized production model. And these are two worthy topics to be discussing at this time. However, there are many more attributes of the Preliminary Specification that we have not discussed for some time. I thought that from now on I would bring up a feature in the Preliminary Specification to remind people that there are many more attributes of the system. I'll do this from time to time and for no other reason than to broaden the conversation. Today I want to discuss the Work Order system.

The Work Order system seeks to resolve how the industry, and each producer can be more innovative. Collaboration on the sciences is a key to the establishment of new innovations as we learned from Professor Giovanni Dosi. The point is that new science leads to new innovations which leads to new science and so on. So how do we initiate more science and innovations in the industry and the producer firm. Collaboration and knowledge are two commodities that are low cost and effect a trajectory change in a dynamic and innovative industry. These are the things that we learned in our research of Professor Giovanni Dosi.

It used to be, and is not the case as much today. And needs to be the case tomorrow, on a wholesale basis, that working groups between producers were established to study, research, collaborate and experiment in the earth science and engineering disciplines. These study groups are founded by like minded producers who are interested in determining knowledge of a certain type and are willing to pay to learn of it. The costs of these working groups are small, usually in the tens of thousands or small hundreds of thousands of dollars. And shared across the groups of producers who are participating. Participation provides access to the knowledge when it is completed. As was indicated, for the oil and gas industry to become an innovative industry these working groups will have to become several orders of magnitude in terms of volume of what they are today. Participation between like minded producers is what makes them valuable. Both in lowering the costs, and increasing the diversity and quality of the population of participants.

One of the difficulties, and what People, Ideas & Objects asserts is the primary reason that these working groups current lack of use is. The bureaucratic difficulty in accounting and recording of costs for these working groups. Participation is not always straight forward as all participants are not always equal. Some can earn their way through contribution of some Intellectual Property, others through staff and resources and others through straight cash contributions. These working or study groups can take many months in which to complete so the accounting for them is conducted over a long period of time. Usually the direct participants are hounded by accounting more than they are participating in the working group. This constant barrage of questioning and administrative detail doesn't stop. And eventually affects the motivation of the participant in wanting to participate again in any other working groups. They may cherry pick a group here and there, but the needs of an innovative industry and producer requires that the number be an order of magnitude higher. We can all assume how that would be in terms of the accounting and administrative difficulties.

There has to be a better way. And that is what the People, Ideas & Objects Work Order provides. An interface that enables the participants to capture the structure of the deal within the interface as it is being agreed to. Then, with all the detail programmed into the Work Order the administrative details will operate within the People, Ideas & Objects Work Order as they should, without the bureaucratic nightmare they have in the past. As long as the detail of the deal has been captured properly, there should be no difference between planning and execution of the working groups administration. Accounting will be satisfied with the methods that are consistent with the plan and the earth science and engineering resources of the firm will be able to participate at the level necessary to move the industry and the producer forward.

Review of the Work Order in the Background section of the Preliminary Specification is here. And its part of the Partnership Accounting module if you would like to review that entire module.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Plans, Hopes and Prayers

What we have seen in the past few weeks is the absolute failure of the bureaucracies strategy of “hoping and praying for a cold winter.” We all know this has been their key point to building value in the industry for the past two years. And when we had the cold winter it certainly seemed like the need for the Preliminary Specification tanked with the temperature. Why would you need the Preliminary Specification when the natural gas prices had returned to the point where producers could earn a profit? Well you wouldn't necessarily, other than for the many other reasons it provides. But in terms of the decentralized production model the value of that model would be diminished in an environment where higher natural gas prices existed.

In January and February of 2014, all was well as the temperature of the continent was icy cold and forecast to continue. What the bureaucracy didn’t understand is that the prices are also determined by supply and a large part of the supply is from shale gas. And there is no end to the shale gas reserves. Certainly one winter is not going to affect the supply of shale gas reserves in the North American marketplace.

Now prices have reached a point where they were for the last five years on average. That’s surprising! So what has really happened here is that the bureaucracies strategy of hoping and praying for a cold winter is nothing but a pile of you know what. It is, and always was, bubble gum for the masses. They never really had a plan for how they are going to run the industry. They're just hoping and praying for things to get better. They haven't a clue.

I suspect that the natural gas marketplace is going to figure this out pretty soon. And when it does the floor on pricing is going to drop out from under our good friends the bureaucrats and leave them with a price that is truly jaw dropping. That’s what markets do to the unprepared. They punish them. Continued overproduction is a systemic problem that is in the bureaucrats DNA. They can not do anything about it. If they could, would they be hoping and praying for a cold winter?

Expect to see some grand strategy being formulated by the powers that be that will address the business model coming out of central command. Some industry wide initiative that is systems oriented to deal with the problem. And yes it will violate our copyright in some form. But its the only chance they have to baffle the brains of anyone who might still happen to be listening to them.

The fact of the matter is that natural gas prices are destined to stay well below their marginal costs until the industry puts in place a business model that can address the needs of shale gas. The Preliminary Specification with the decentralized production model does that. The other attribute of the model is that it eliminates the bureaucracy in the oil and gas industry. Which at this point is not just a good thing, its a great thing. This past season has shown they don't have a plan for how they'll manage the industry. Its now they don't even have a hope and a prayer.

Winston Churchill once said that you can always count on the Americans to do the right thing. That is after they had exhausted all the other possibilities. Now that they have no plans, hopes or prayers. Maybe they will do the right thing and build the Preliminary Specification.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Putting the Cart Before the Horse

Its a difficult question to answer, why do we need to develop the user community before the industry will fund these developments? If there is so much value generated by the Preliminary Specification, why doesn't the industry just fund it? I understand the point of these questions and the logic is obvious. It seems that I am putting the cart before the horse in trying to have the user community developed before the industry funds the developments. I have to say its a bit of a Mexican standoff right now in that everyone sees the value, and everyone is expecting someone else to act. However with the scope of the undertaking, who decides?

And there’s the bureaucracy. If you read the Preliminary Specification the bureaucracy has been effectively dispatched to the trash heap of history. It wasn't a deliberate thing it just happened as a result of using the Joint Operating Committee and the effects of the Internet. They're just gone. No need for them. Yet they still effectively control the industry and are not stepping aside for anyone no matter what. And they don't care that they're losing money with their current business model. What is anybody going to do about it, they will state. And they have a point, there is nothing that anyone can do to challenge the bureaucracy, their control and their position in the oil and gas industry is secure.

We therefore have to organize ourselves to put ourselves in the position to offer the investors in the industry with a choice as to how they want to operate the oil and gas industry. The bureaucracy and its business model, or this user community and the Preliminary Specification. And then, when we can show that we have a solution that is committed to providing the oil and gas producer with the most profitable means of oil and gas operations, the bureaucracy will be swept aside and we will proceed with our solution. I don't see an alternative. This is the ultimatum that the bureaucracy has put forward to the investors in the industry. They have had plenty of opportunity to do the right thing and have chosen not to do it.

Even with so much value at stake they choose to do nothing. Natural gas prices were looking promising a month ago, and now it is evident that waiting for a cold winter as a strategy is a failure too. That won't matter. They'll continue on without doing anything. They may pick up some nonsense strategy to make themselves look good, and make it look like they're doing something but the real strategy will be to push a “bullshit baffles brains” strategy.

I know its a fair bit of work in order to organize ourselves for the ability to provide industry with an alternative means of organization. But this will have to be how it is done. In the traditional business world it doesn't maybe make a lot of sense. However, we are not dealing with a rational group when we are talking about the self interested bureaucracy.

The alternative is that we wait. And for what I don't know. The bureaucracy would like that. I have been fighting them on this for ten years now and they will not proceed with these developments on their own initiative. They will have to be physically removed. And that is in a nutshell what we are doing here by developing the user community now. Building an alternative means of organization for the oil and gas industry. We have the technological infrastructure in Oracle Fusion Applications. We have the overall vision in the Preliminary Specification. Now we need the third critical component, the user community to make this a viable alternative to the bureaucracy.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

A Plan to Deal With a Possible Scenario

We have to guard against a scenario that might play out like this. And then, just as everything starts to pull together and the user community is developing the software that they want and need. The producers decide that the business model inherent in the Preliminary Specification is, on second thought, not something that they really want at this time. How many times have we been at that point in a major project only to have the funding pulled and all the work and effort of the people turns out to be for a lost cause. These disappointments happen frequently in business. Things happen and priorities do change and there is risk involved in every project.

I would hope that no one would be subject to any career risk in participation in the user community. That however is the naive part of me that doesn’t recognize the politics of major change initiatives. The reality is that the work that we will be doing here in the user community will be unique and of interest to those that can handle the risks that they take to their careers. We are changing the industry significantly, and for the better. One look at the user community vision and you can see that the power and authority that the community has will make the work exciting and rewarding. Risk is a part of that.

What I can do is assure you that once we commence the developments of the project we will complete them. And that is because we provide the oil and gas producers with the most profitable means of oil and gas operations. They can not attain that profitability without the user community, People, Ideas & Objects, the service providers and cloud computing infrastructure, “the sub-industry” becoming operational. Therefore it is in their best interests to continue to push forward until the completion of the project.

If there were small increments of value being attained by the business model then we would be subject to greater risks than we are. With shale gas, and the prolific nature of the resource, a new business model must be brought into the industry. And that is what this sub-industry is doing. It’s a big problem, the unprofitable nature of the natural gas business. It can’t be sustained. We as a community have a solution to the specific problem of shale gas profitability. But also to a variety of other operational, administrative and accounting related problems that have been present in the industry for years. The Preliminary Specification addresses many of the current issues and is a framework for resolving future problems.

We will have our setbacks and there will be times when progress is interrupted unnecessarily. Those situations happen. We are however making wholesale structural changes to the way that the industry is configured. This level of change will invite a few hiccups. What we need to do is look beyond the bureaucrats to see the movers and shakers in the oil and gas industry. It is these people that I am certain that we will resonate with. And as far as their concerned we will be moving far too slowly for their liking. They'll be wanting to operate that stripped down version of an oil and gas producer that is focused exclusively on their earth science and engineering capabilities, and land and asset bases as their competitive advantages. The administrative and accounting work being done for them out “there.”

The other aspect that members of the user community can be assured of is that there will be revenues for the user community and service providers. People, Ideas & Objects have $667 million in user community funds budgeted in the initial developments. And the service providers will have the current producers G&A expenses diverted to them as revenues. Currently in North America the producers spend $40 to 60 billion on G&A. Therefore a large portion of these funds would become the revenue streams of the service providers. With risk there is also reward.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

A Sub-Industry

Our commitment to user community developments in our software is comprehensive. With the scope and scale of the Preliminary Specification it is necessary to have the user community define and design what it is they need and want in their oil and gas ERP systems. Not only do we provide the oil and gas producer with the most profitable means of oil and gas operations. We provide the user community with the software that they want and need. The only way to achieve that is to provide them with a sound vision of what a system could be. A vision such as what the Preliminary Specification provides, and let the users take it from there.

What People, Ideas & Objects provides the oil and gas industry and the user community with is the software development capabilities they need to achieve the objectives we have set out for them. Currently software development is an ad-hoc and cottage industry approach where either small software firms or employees of producers themselves stitch together applications of limited scope and scale. It is assumed that the employees of the producer firm will figure out the nuance of either integrating the applications with other applications, or shuttle data between the two applications in order to have the applications work together in the producer firm. This is how the bureaucracy likes to keep busy. Taking upwards of a dozen applications and making them all work as one.

Now many have criticized People, Ideas & Objects for having a scope and scale that is too large and will be impossible to manage. Of course many of these critics are the bureaucrats who are somehow stitching together the same scope and scale of application functionality out of dozens of applications with very limited budgets. Also under a cloud computing delivery infrastructure, which is what People, Ideas & Objects will be using, the centralization of all of the operations in one virtual location reduces the logistical difficulties of these tasks.

There is also the point that needs to be considered regarding the service providers and the software that they will be using. Much of the administration and accounting work of the producer firm will be done by these service providers on software provided by People, Ideas & Objects. These service providers will be derived from the user community and will work closely with them at all times. In fact service providers and the user community participants will for all intents and purposes be the same people. The software they use to process the oil and gas producers information will be purpose built by the user community to meet the needs of the service provider and the producer.

The point that I want to make here is that the user community, the service providers, People, Ideas & Objects developers, and our cloud computing platform all make up a sub-industry that is new and dedicated to the profitability of the oil and gas producer. This sub-industry is being created between the oil and gas industry and the traditional technology providers as a “gap filling” measure. What we know about specialization and the division of labor is that when a “gap” forms where someone can fill it with a new job, that is how specialization expands. This sub-industry is being created to fill the gap that exists between the oil and gas industry and the traditional technology providers. On the one hand we have the oil and gas producers as our clients and on the other hand we have Oracle as our supplier. We as a sub-industry have a fundamental understanding of oil and gas. We are trained in the disciplines of business. And we have a strong aptitude towards technology.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.