Unquestionably, The Largest Issue Ever

I am at a loss to think of a time when the oil and gas industry faced a larger issue than what it faces today. The energy crisis of the early 1970’s comes to most people’s minds however I would suggest that it was a consumer related issue that was brought about by political means. Looking just at the business issues that the industry has faced I believe there has never been a time in which the business issues have been greater. My perspective is that industry has carried on with specious accounting for over four decades. An accounting prescribed by the SEC that inflates assets and profits magnificently. Outside of the issues of reporting profitability that never existed, which created overinvestment and overproduction. The value that is held in the industry today is worthless as it demands significant capital investments just to maintain operations. It is a drain on the economy and society in general. Without a willing and naive investor and banker group maintaining a long term annual infusion of cash the industry is unsustainable. This becomes more evident each day as the investors and bankers, realizing that they’re the mark, have ceased participation in the industry. The aggravating aspect of this issue is that it is systemic throughout North America and is unrecognized and unappreciated. It is the culture of the industry to spend other people’s money as the means to (bureaucratic) wealth generation. This culture knows of no other method in which to manage the industry and refuses to accept any other input.

As much as bureaucrats believe that $74 oil for a couple of months is all that is required. People, Ideas & Objects know different. The only thing $74 oil for a couple of months will provide is the return of a more robust skimming of cash flow by said bureaucrats. What we believe is necessary are prices in the region of $150 for oil and equivalent for gas for at least three years to deal with the damage that has been done through this issue. Nothing short of this will be able to provide the scope and scale of cash necessary to remediate the industry. It will need to be the consumer who pays for this as they are the benefactors of this current issue. The values held in property, plant and equipment can be seen as an accurate accounting of the amount of the discount provided to the energy consumer. These values being the amount of unrecognized capital costs of past production.

It was early this century when I began pounding the pavement regarding the lack of profitability in the oil and gas industry. I was told then that it was about cash flow, profits didn’t matter. I was laughed at repeatedly as a result of the position that I had taken on the profitability of the industry. It’s only in the last decade have producers begun to see the light in terms of profitability. Profitability of the producers is such a foreign concept that none of the producers know with any certainty or accuracy which of their properties are earning or losing money. The overhead necessary to operate those properties is mostly capitalized to property, plant and equipment of the producer firm. Therefore the cost to operate a specific property, for this and many other reasons, is unknown and unknowable. Therefore everything is thrown in the pot to see if it’s a functioning organization at the end of the quarter. That is the state of the quality and effectiveness of the accounting information that exists in the producer firms of the oil and gas industry. The objective is to produce everything always and don’t ask questions that can’t be answered. The CEO needs to strut down the street with the largest balance of property, plant and equipment that is conceivable. That is the measure of value and of performance in oil and gas today.

We need to fully understand the implications and reasons why we would ever produce oil and gas unprofitably. Is doing so reasonable or necessary? I believe this only robs future generations of their use of oil and gas. We owe it to ourselves to use oil and gas responsibly. That implies that we don’t waste it which means we should produce it profitability. Profitable on the basis of a reasonable and accurate accounting. Today we have producers and an industry that are effectively worthless. An abundance of producers have extinguished all of the capital that was ever provided to them. Yet still carry large balances of property, plant and equipment. People, Ideas & Objects believe that all of the producers balances of property, plant and equipment are overstated and 60 - 70% as a minimum of these balances should be depleted in the current period in order to capture a pro-forma understanding of the management's performance. This takes the bureaucrats perspective of accounting as a reflection of value, which it is never meant to be, and places the proper perspective on accounting, one of performance. These pro-forma financial statement will then accurately capture the situation that I feel exists in the industry today. A financial armageddon.

When the situation was manageable it was neglected, and now that it is thoroughly out of hand, we apply too late the remedies which then might have affected a cure. There is nothing new in the story. It is as old as the Sibylline books. It falls into that long dismal catalogue of the fruitlessness of experience and the confirmed unteachability of mankind. Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of counsel until the emergency comes, until self-preservation strikes it's jarring gong -- these are the features which constitute the endless repetition of history.”

That is a quote from May 2, 1935 from Winston Churchill regarding the buildup of military power in Germany. I’ve been arguing for a while now that the loss of cash in the industry was the issue that would bring about the necessary changes in the industry. I guess as long as the bureaucrats were able to continue to skim off the top whatever cash flow there was then there would be no critical issue to motivate them to action. “They were fine, thank you.” I do however believe that I now see the triggering mechanism, or jarring gong, that will precipitate the downfall of the industry. What's worse than the cash evaporating out of the industry? The entrance of the lawyers and the lawsuits against these bureaucrats for their poor performance. That is the one thing that they will all seek to avoid by escaping out the back door in mass.

We’ve seen a number of revised business strategies being published by producers these past few days. Establishing committees within the board of directors to evaluate options, selling themselves off bit by bit or cutting staff. These are not strategies, business models or what anyone signed on for. They are not productive and do not address the issue. Producers need to evaluate and implement the Preliminary Specification in order to adopt a plan and strategy that will provide for the profitability of oil and gas exploration and production everywhere and always. Other than the capitulations that are defined earlier in this paragraph, ours is the only plan and strategy that is available. The adoption and implementation of the Preliminary Specification may possibly enable their investors and bankers to reevaluate the outlook of the industry and producer based on a profitable future. And who knows maybe even forward some investment dollars to help producers bide their time.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

Commodity Price Dynamics

The bigger the commodities price differential, the more valuable the producer firm! That’s correct isn’t it? Well it seems to be the logic that the Canadian producers have adopted. Therefore it must be correct, the objective of the bureaucrat at the Canadian producers is to achieve the highest price differential possible! For what other purpose would you be in business for? My friends the bureaucrats have therefore attained significant value within their organizations. Here’s why, although natural gas prices remain positive, there is still the possibility that they will once again pay the consumer to take the gas from them. The differential on Aeco Spot natural gas is now $2.86 CDN. Leaving the natural gas price at $0.99 CDN. The real achievement though is in the oil price. Western Canada Select prices are $53.58 CDN making the differential $35.49 CDN. Which is a pretty healthy differential, more than double the previous record, yet still provides much incentive for the bureaucrats to move the differential much higher. Clearly my education in oil and gas remains incomplete.

What these differentials should reflect to each and every producer everywhere is the same lesson that the Saudi’s have been attempting to teach the producers over the past few years. This is also the manner in which the Preliminary Specification handles the oil and gas commodities. They are subject to the economic principles of price makers. If the market is overwhelmed with production then the price of a product that is subject to price maker characteristics will reflect that overproduction in price declines. Or in this case higher differentials due to Canada being somewhat of a constrained and unique market onto itself. (Maybe Canadians should think about building some pipelines!) The Preliminary Specification deals with the overproduction that is chronic in the industry through our decentralized production models price maker strategy. If the property based on the actual accounting did not attain a profit, as a result of high differentials in this case, then it would be shut-in to remove that marginal production from the commodity markets. Achieving a financial null operation, no profit but also no loss. Enabling the markets to find the marginal price within the industry. The properties reserves would be held for the time in which they would be produced profitably, and those reserves would not have to carry the incremental cost of each months loss as an additional cost to be recovered from those reserves. Lastly the producers would be more profitable as a result of removing their unprofitable production from their production profile which would no longer dilute their profitable production.

Once again my education gets in the way when the bureaucrats consider that the act of using reasonable and accurate accounting information from the Preliminary Specification in order to independently decide that a property is unprofitable and should therefore be shut-in, is clearly collusion as the bureaucrats consistently tell me. And I’ve now written these two oil and gas business attributes on my office wall in big letters. “Differentials are good, the bigger the better.” And “Making sound business decisions based on actual facts is collusion.” I’ll continue to work on these and one day I’m sure I’ll begin to see the light of how the industry operates.

It was about this time last year that I suggested that oil prices might begin to mimic what occurred in the natural gas marketplace. What happened there is that shale so completely overwhelmed the market that the commodity price collapsed. But then it continued in a significant way and since it was a continental based price overproduction further eroded the price until such time as it fundamentally broke down. Prices for gas in Japan and Europe remained robust which brought about the Liquified Natural Gas mini-boom of a few years ago. That mini-boom has now flooded the global market for natural gas and prices everywhere are depressed. It will take many years of deliberate rehabilitation of the natural gas market before anyone can profitably produce natural gas again. My suggestion was that a fundamental collapse of oil was not a given, but if it did happen it would be different due to the global nature of the commodity. We’ve now heard as of late last week that five year oil futures prices are beginning to be affected by the volume of producers selling, mostly shale, into that market. Might this be the beginning of the fundamental breakdown that we saw in natural gas prices? I suggest we keep overproducing and find out. Which is proof that I am trying as hard as I can to educate myself in the logic of the oil and gas industry.

It is believed that share prices are evaluated based on the three year outcome of the firm. If the five year oil price is breaking down, then that would also be good for the oil and gas industry? Bureaucrats may need to help educate me here on this one. I would see this as detrimental as the stock price of the producers having held up fairly well throughout the decline in oil prices. These share prices haven’t been stellar performers but they also haven’t been subject to the massive annual dilution that they were going through each and every year for the past few decades. I’m sure all of the bureaucrats would render a non opinion on this point. It maybe hits too close to home if they agree their performance may be lacking and also found to be dumping more of those options they’ve accumulated over the decades. It’s not that they’re conflicted, that requires emotion, it’s just that they want to keep their exits from the scene quiet for now. Bureaucrats may not like my discussion of their performance. What else is there that I could provide them that would reflect the job that they’ve done. I ran out of participation ribbons many decades ago.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

Investment in the Future Oil and Gas Industry

There are two fundamental changes made in the Preliminary Specification that create an interesting dynamic in terms of investing in oil and gas. The first is that we shift to fully recognize and support the Joint Operating Committee as the key organizational construct of the dynamic, innovative, accountable and profitable oil and gas producer. We shift the compliance and governance frameworks from the corporate model into alignment with the Joint Operating Committees legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks. The alignment of these nine frameworks provide oil and gas producers with a speed, innovativeness and profitability that we seek in the oil and gas industry. The second change that we make is the creation of the service providers who are reallocating the accounting and administrative resources of the producers. The service providers will then provide the administrative and accounting process management on behalf of the Joint Operating Committees that are producing during any specific production month. If the property is profitable it will produce and the service providers will render an invoice for their services to each Joint Operating Committee within the industry that produced that month.

The key attributes of these changes are that the producer is relieved of the difficulties of administering and accounting for their properties, but most particularly ensuring that they are building the appropriate capabilities and capacities necessary to function as a dynamic, innovative, accountable and profitable oil and gas producer. I am not aware of any producer that makes the claim that administration and accounting are any part of their competitive advantages, and I’m not aware of what benefit there would be for any producer to claim to have administrative and accounting competitive advantages. However with our current friends the bureaucrats I’m not counting out anything. What we’ve designed with the user community and service providers is a capability and capacity that enables all producers to focus on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The accounting and administrative conducted by the service providers is prepared in an objective manner that ensures that compliance today and compliance for tomorrow will be achieved and ensured. This is the advantage that is obtained by the configuration of these resources. The focus of each service providers specialization on the one process they manage enables them to be aware of all of the requirements that are demanded of that process. And it will be the service providers through their user community participation that will have the power and tools necessary to make the effective changes to their process to maintain the producers compliance.

Our service provider sub-industry will be made available to the oil and gas producer / investor for the cost of a monthly fee. The fee for the processes management may be pennies for the service provider to provide, however they service the entire industry and are able to as they say “make it up on volume.” What this does therefore is open the investment in oil and gas to far more than just the common stockholdings of the existing producers. Investors would be able to participate directly within a Joint Operating Committee and even if they only owned an interest in one small property they would not need to carry the multi-million dollar annual overhead burden to manage that investment. They would be able to own and operate their interest through the People, Ideas & Objects software and the service providers would prepare their accounting and administration for them. The overhead incurred for that small oil and gas property investment would be commensurate with the size of the revenues and properties configuration. The service providers being “cloud” based services requiring only the payment of a monthly fee to each service provider. I’m sure that there are bureaucrats who believe this might be a career opportunity for them as a result of each producer / investor writing checks to the service providers for each one of the properties that they own. However this is 2018 and the payment processing to the approximate 3,000 service providers each month will not be a burden to anyone other than the computers. As far as bureaucrats are concerned People, Ideas & Objects et al glow radioactive making us incompatible for any future working relationship. Therefore we consistently turn to computers to replace the bureaucrats.

People, Ideas & Objects, our user community and service providers therefore open oil and gas to a broader set of funding alternatives to raise the required capital. We also opens up a number of opportunities for the investor to participate in the industry. Opportunities like securitization could be pursued where the oil and gas asset is actively traded. Probably a good role for the oil sands projects where the ownership interest could be converted into a securitized investments that is actively traded.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

What the Plan, Where's the Strategy?

It’s one thing to be critical of the oil and gas producers, a skill and talent that I apply faithfully. To do so without offering an alternative would be futile and counter productive. My argument is only against the bureaucrats who are everybody’s favorite people and the group of individuals who are particularly responsible for the demise of the oil and gas industry. They’re also the ones that are moving rapidly towards extinction as a result of Information Technology, and are the odd man out in businesses everywhere. Maybe they’ll find some use in their next life. The ability for bureaucrats to self identify and take responsibility for their actions would be to much to ask. They’re always attempting to hide in plain sight and have defined characteristics that are obvious to those that are familiar with their breed and are able to identify them quickly. Their days are limited no matter what happens with People, Ideas & Objects, our user community and service providers. They were placed on the endangered species list many decades ago. And don’t get me wrong, I am not in any way attempting to solicit support or sympathy for them. They deserve everything they’re about to experience.

There was an article from World Oil the other day that caught my attention. “Large Investment Groups Throw Weight Behind Oil Rally.” Makes me think I might be wrong about the difficulties in the industry and the investors withholding their investment dollars. However reading through the article provides some clarity.

Duquesne also added shares in companies including Marathon Petroleum and Devon Energy last quarter.

The stake in the VanEck exchange-traded fund was valued at $44.1 million, while the Marathon Petroleum shares, its fourth-largest addition, were worth $34.8 million, according to the filing. The biggest acquisition last quarter for the family office was Facebook and Gilead Sciences.

Soros Fund Management’s biggest addition in the energy sector is Devon Energy, valued at $30.8 million. The hedge fund also bought stakes in Andeavor, RSP Permian Inc. and Kinder Morgan.

Based on these and contrary to what I’ve been saying all along about the industry heading for a very difficult time. It is relatively easy to suggest at this point that we’ve arrived. The media are putting a spin on this disaster, for whatever reason, but the facts are facts and they point to a comatose patient with no heartbeat.

So how is it that the industry can come up with a plan to deal with the situation. A plan and not an excuse to defer any and all action to some quarter in 2022. They don’t have until the end of 2018. The first thing the industry needs to do is to buy time. That requires either bank or investor money. Which demands a plan and strategy to deal with the issues and future. There’s no time to start to think about this. It should have been started many years ago, or maybe even a decade ago. It took me a long time, 10 full years of research, in order to prepare the Preliminary Specification. Producers can’t throw more people at this either. These usually have to come from one mind. Which is part of the reason that it takes a decade or more. Does anyone know of anyone who would have been fool enough to prepare a plan and strategy that deals with the issues and opportunities in oil and gas and can be implemented today? Anyone?

My sarcasm is ripe today. The producers could collectively adopt the Preliminary Specification and proceed with that plan and strategy simply by funding our budget. Always a catch 22. That way the investors and bankers would be able to see the future of the industry and how it would be returned to a profitable industry. By implementing the decentralized production models price maker strategy the days of flooding the market everytime the oil or natural gas price rallies for two consecutive days would be at an end. That any of the investors or bankers money they did put into the industry would be returned with both the capital and earnings being competitive against other industries performance. And that performance would be based on a reasonable accounting that they could understand and trust.

I am aware that People, Ideas & Objects Preliminary Specification is not the only plan and strategy that is available in the oil and gas marketplace. There are others. Take for instance the publication of Crescent Points revised strategy yesterday. Their newly installed CEO will be cutting staff by 17% and selling assets. Which is a business model that exists in certain industries. Think of pawn brokers or scrap metal recyclers. There’s also Strategic Oil and Gas who recently published their second quarter report that looked towards a future where investor and banker support was critical to their strategic interests. Only to declare a few weeks later that a special committee of the board of directors was formed to evaluate strategic alternatives. Or in other words, they’ve all but given up. My point is that there are many plans and strategies, ours seems to be the only productive and profitable one.

In somewhat related news, the probability that we’ll be able to launch a successful ICO diminishes each month. We’re still working towards one for September 2019 however it becomes progressively more difficult as the market remains relatively immature. The ICO method of funding will be with us for the rest of the century. And it will be a significant method to fund IT related projects. The diminishing capacity that I see is that to have our funding capability from that market in September 2019 may be premature. It may be as much as five years from now before the capability and capacities will be available, which would bring our ICO into the category of a less than highly probable event. The question the producers need to ask is, does this alternative appeal in terms of timing? Even with that delay though, that’s still twice as quick as the producers coming up with their own workable plans and strategy over the next decade.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

User Community Developments, Part XXX

Since the publication of the Preliminary Specification we have worked on the development of the user community as our first priority. This continues today and I’m happy to say that it will always be our first priority. High quality software begins with the user and that is where we are, the beginning. Building something today with the scope and scale of People, Ideas & Objects Preliminary Specification without an empowered user community would be futile and wasteful. The issues and opportunities in the oil and gas marketplace at this time are too critical to be wasting time on approaches that we know will never work. It is the user community that will provide the speed of development and quality of software that are necessary at this time to deliver the software product and services the producers and industry require.

During this series discussion we have taken the time to highlight the competitive advantages that the user community and their associated service provider organizations will be providing the oil and gas producer and industry. They are significant and substantial. To simply list them is the most effective way to capture their level of competitiveness in the industry. These advantages include;

• The quality of the software and services they build. Cost is not a competitive differentiator when producers are losing so much and are facing an existential crisis.
• Specialization and the Division of Labor being applied consistently in the areas of administration and accounting. All economic value has been, and will always be generated by these two tools.
• Automation of business process. The capabilities and capacities of the user community and service providers to effect the change required within the industry. To expand oil and gas profitability and reduce costs through automation is a competitive advantage.
• Innovation based on the users accounting and administrative expertise. The Preliminary Specification lays the foundation for an innovative oil and gas industry, they will have an innovative accounting and administrative capability as well.
• Application of the new technologies as they become commercial and are proven to generate value or reduce costs. New technologies such as;
• The application of Artificial Intelligence.
• 5/G or the Internet of Things.
• Focusing the efforts on what computers do well. Storage and processing. Leaving the things to the user community that humans do well. Such as leadership, issue resolution, decision making, creativity, collaboration, research, ideas, design, planning, thinking, negotiating, compromising, innovating, sensing emotions and financing. To name a few.
• Integration of our software and services within the oil and gas, and support industries. 
• Leadership. More on this below. 

Members of the user community will hold an active and dynamic position within oil and gas and will be driven to ensure that producers achieve the most profitable means of oil and gas operations everywhere and always. Only they have control of the decentralized production models price maker strategies Intellectual Property through their user community license. Only they can solve what ails the industry today.

We see the user community is configured differently with competitive advantages and tools like the Intellectual Property that make it capable of undertaking the tasks ahead. As I’ve described, the work that will be done on behalf of the oil and gas industry will be different than anything else the user community member may have approached before. It will be a dynamic and exciting role in a very difficult period for the industry. The key attribute of the user community member will be their leadership capabilities. Dispatching 3,000 leaders to solve the many areas at issue is the only way this will be done. Leadership has been defined as simply as the readiness, willingness and ability. Joseph Schumpeter said of leadership “Fixers and troubleshooters rather than production man.” Four specific behaviours are responsible for 89% of the effectiveness of leaders. These four are 1) being supportive, 2) operating with a strong results orientation, 3) seek different perspectives, 4) solve problems effectively. If you find this work as I’ve described in this series interesting the industry needs you. The issues don’t seem to be going away on their own do they.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

User Community Developments, Part XIX

As a user community member you may already know and understand that People, Ideas & Objects will be using Oracle Fusion Middleware and Oracle Fusion Applications as the base of the ERP system we will be providing to the oil and gas producers. These Oracle products have now been conveniently repackaged within a new offering called Oracle ERP Cloud. It will be this base of functionality that Oracle provides in which we will build the Preliminary Specification modules off of. Everyone being clearly aware of these applications and are good at seeing what the Preliminary Specification vision is as it is expressed today will be able to imagine in their own minds what it is they’re building. I’m being facetious of course. Nothing of the sort is expected, it would be a fundamental failure from the word go. What the user community must have from the first day of their development is a useable demonstration of the People, Ideas & Objects software in its initial development stage of being only the Oracle ERP Cloud. And each and every iteration of the development of the software. Then they can see the areas that they can use to bring about their ideas and weave their needs into the Oracle ERP Cloud and Preliminary Specification through our software developers. A constant, iterative approach.

As I mentioned this demonstration facility will be provided on the first day of development and be available to all of the users within the user community 7/24. Users will be able to generate generic data that can be used and reused to test the features that are being developed while the user is working to get the software right. As mentioned earlier, the use of an Integrated Development Environment (IDE) will allow user interaction with the software developer, review of the code, the ability to implement changes and run the code. Choosing an IDE is more of a personal preference. Google “Integrated Development Environment” and you’ll be provided with a wealth of information, videos and offerings. As an enterprise builder we would be somewhat limited to the Netbeans, Eclipse, IntelliJ and Oracle JDeveloper offerings.

Software development has changed from what most people understand. There will be times when a user community member may experience changes to the software their working with on a daily basis or even more frequently. Software is no longer released once a year based on a long list of changes that are opaque to the users. Small changes done incrementally over time is the superior method of building software today. When the user is driving those changes and is able to check the results of those changes against a working demo of the application there are few bugs that see the light of day in a commercial release of software. When we are discussing the development of the Preliminary Specifications on top of Oracle ERP Cloud we are discussing a well defined application scope and scale with an overall vision that is understood by each and every user member. There is no reason for People, Ideas & Objects to be releasing a buggy, poorly defined and slapped together hodge podge of an oil and gas application. We will have the resources, tools and methods to overcome the niggling details that the devil puts in our way.

Since People, Ideas & Objects will be a cloud provider of its software. And Oracle is providing their software on the cloud today. Members of our user community during our initial software developments will be able to access the work they’re doing and have done on most devices. Therefore demonstrating the work that they’ve done will be able to be presented to the producers as soon as the first week of our developments. The producers would then be able to participate through the user community member and have their specific needs and desires met in that way. Although it would be logistically difficult to have 3,000 user community members participating in this way, with 200 or so producers, more efficient ways of doing the same will be able to be discovered.

I’ve mentioned this next point a few times before and it’s just as valid today as it was then. I can’t necessarily peg the work that we’re doing here at People, Ideas & Objects as exclusively software development. That is our role and that is what we are focusing on. My point is that the cross between a software development / custom Integration will be hard to discern at times. Particularly for the user community member who will be undertaking the integration of the software through their service provider offering at some point in time. This is a result of the high levels of participation of the user community, possibly the producers tagging along too, and the developers all working to solve the issues the oil and gas industry is facing. To say that one day we will move from a decidedly software development phase to an integration phase in my mind will never happen. Integration should be one of the key issues that the user community member should be considering at all times and asking themselves, how can I speed up the implementation / integration of this feature within industry? Which raises the question when is it that the user community member begins the development of their service provider offering? Even without an assigned service provider process is there work that can and should be done by the producers in anticipation of the integration.

It’s within this post that we see the dynamic and critical role that is undertaken by the user community member. Without them nothing is going to happen, and nothing will happen unless its an idea or thought of the users first. Such is the interesting nature of this work and this time we find ourselves in. It should be clear that this is not your grandfather's user community.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

Labor Day

Third Friday

User Community Developments, Part XXVIII

When we understand the power of Intellectual Property (IP) and the means in which to deploy it competitively we begin to see new opportunities in the marketplace. Publishing the Preliminary Specification has been an effective competitive weapon for People, Ideas & Objects. It has helped to recruit and establish the user community, and through our user community vision, secure their foundation with the power and control to make the needed changes in the oil and gas industry. These competitive advantages will soon be in the hands of the user community. IP is the only means of competitive value that I feel is worth having in the 21st century. You either own IP, you have a license to IP or you will work for a firm that has access to IP. These will be the only manner in which people will be able to work in the future. Software, which is one of the strongest forms of IP is in my opinion the only business that will exist in 2050. No other industry will still be around. Such as it’s not enough to own the oil and gas asset any longer, it's also necessary to have access to the software that makes the oil and gas asset profitable. Therefore as a potential user community participant with a license to this IP you have a choice to invest in the user community or you could buy a producing oil well. Where’s the value? It’s your choice to determine how you’ll operate in this century. Our user community will need to learn and understand how to effectively use this new tool they will soon have.

We have three general methods in which to organize the user community. The work will initially be highly collaborative between other users within the community. Then in addition to collaborating within the community it will also be collaborative with our software developers. Users will at times need to be physically in front of our developers to ensure that their needs are met. They will need to be speaking to producers to relate what they’re doing and what the producers needs are. And they will be collaborating amongst themselves all over the continent. Therefore do we establish office space in Houston and designate private offices for each user community participant? Or we could do the open area concept and crowd everyone into a third of the space. The final method that we could use is to have the user community participant do this critical work in distributed teams. In any one of these three methods the use of video conferencing and one to one video communications would be more than adequate for the majority of the work that needs to be done.

I read an interesting article the other day in TechCrunch regarding the use of distributed teams. The key finding was that in order to make up for the lack of face-to-face communications the demand falls to each participant having to use their writing skills to overcome the distance. Therefore reading and writing become the primary means and mode of communication. Alleviating the office politics and increasing the documentary value of the users contributions. What we need to do, as I stated earlier, is capture the ideas that have already formed in people's subconscious, verify it, codify it, collaborate with others to validate its authenticity and merge with the other ideas from other users. Doing this in text is more precise and thoughtful, is easily searched and reviewed. Capturing ideas and who specifically contributed the ideas within conversations in an open office area becomes much less efficient in contrast. To house people in individual offices in order to write these submissions seems contrary to efficiency and redundant when the Internet is at least 24 years of age. Therefore distributed teams is the method that we will be employing throughout the user community on a permanent basis.

In terms of how People, Ideas & Objects will determine the allocation of specific service provider licenses to which member of the user community. The contributions that are made during the development process will be the determining factor. No one is going to go through all the submissions and be able to allocate the appropriate license to the right individual. That would be a superhuman exercise and not possible. It is however well within the scope of what Artificial Intelligence is able to determine. The AI algorithm would review the Final Specification and determine the key attributes of the system. This may involve some help from us humanoids. It would then be able to go back and determine the first mention of these key ideas and the individual who originated it. It would then review the sum of all of the users contributions, compare those with the other users and their areas of specific idea generation. Then apply the known processes under management within the Final Specification and award the licenses for the management of those processes to the highest contributor of each individual process in terms of the ideas and contributions that were made. It sounds easy when I put it like this, however, we will have a budget set aside for the development of this algorithm the moment we are funded. That way by the time we have to apply the AI to the situation it will be tested and the bugs worked out. These AI recommendations would also be subject to the final approval of the user community.

We are capturing the user communities contributions in Google Docs and a Wiki based on Google Sites. We are using Google GSuite for our collaborative environment. It is by far the best in terms of determining who generated what idea when. All that users will have to do to secure their thoughts is to prepare their initial submission in a Google Doc (Word) document and then copy and paste that to the Wiki. The AI algorithm will be able to see the Google Doc was where the original thought came from, who wrote it and at what time. If we used Microsoft Office Word and Excel these applications are still unable to consolidate the contributions of many contributors to a document into one file. Usually someone has to babysit the consolidation to ensure everything is captured and hence losing the originators time stamp and contributions. In this sense Google is light years ahead of Microsoft. People, Ideas & Objects software code itself will be stored in GitLabs and be available for the user community member to review through an Integrated Development Environment (IDE). This will be read only access and will probably remain that way for the foreseeable future. Review of the code is something that will be expected of the user community member as a final verification that what they are expecting is what in fact being conducted.

Establishing the development environment in this manner provides significant value to the dynamic, innovative, accountable and profitable oil and gas producer. The desire to get things down quickly will be the motivation of the user community member initially. Providing a base for discussion and collaboration within the community in a short period of time. It will also provide somewhat of a competitive spirit between user community participants that will keep the pace of contributions high. Competitive, yet each user community members license guarantees each user community member will be provided with a service provider organization, after all that is the grand prize in this process. Therefore collaborative, competitive and civil all at the same time. With AI providing the recommendations of which user community member to be assigned to which process the user community member knows that the work that they do, the area that they know the best will lead to their recognition in terms of the allocation of service providers. Enabling them to specialize on a process and work hard to earn it. The last point to make is that user community members may have an interest in one service provider or in many service providers. Their total interest in many service providers not exceeding, or falling below 100%. (For example if the user had an interest in three service providers they may have 40%, 40% and 20% interests.)

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.

User Community Developments, Part XXVII

We touched on some of the detailed work that needed to be done by the user community during our software developments. This of course could only occur once the user community had fully formed. Which would be difficult when we don’t have any office space in which to house them. Bringing up the issue of our budget, which needs to be fully in place before the user community participants are going to fully commit to this project. They can’t risk their careers by having the bureaucrats cut the funding half way through leaving those individuals without the opportunity of user community participation and establishing a service provider. Restarting the project after a budget cut and pause would be impossible. Which is why we need the full funding in place. Otherwise the bureaucrats will only create a failure to prove the Preliminary Specification is unworkable and establish themselves as the only solution for oil and gas management. Casting the user community participant to the catacombs as punishment for participation.

Nonetheless the time travelled in the first paragraph of this post is seemingly years and we still haven’t hired one developer. It appears that the time that we deliver commercial software to the marketplace will be at least a decade from here. This post will dispel this timeline with the facts of how we we’ll be approaching these developments within a far more reasonable time frame and deliver software on a much more timely basis. What delays our commercial release date at this point is the formation of the user community. We have been undertaking this task for five years and are continuing with that work. Therefore, in my opinion, our date for commercial release has been fixed in time for these past five years and will remain fixed as we continue to work on developing the user community. One of the primary reasons that user community developments in oil and gas ERP systems have never been successful is that the budget and time commitment to them are inadequate for the users to consider them. User community commitment is not something that people will review and in the following week commit too. They’d like to see the details of the plan. How will it work, what’s their role and how do they fit in. These are detailed in the user community vision. A vision that endows them with the power and control to effectively deal with the changes that need to be made. Users also need to see the budget and commitment of the producers, in this case, in order that they can rely on more than just empty promises. Right now they don’t see the commitment from industry only the need for action. These take substantial amounts of time for people to consider. They have to consider the opportunity and what it will cost them if they make the change and what will it cost if they don’t make the change.

Three thousand individuals, the size of the user community we believe we need for the Preliminary Specification, which is a substantial amount of people. Identifying the scope and scale of the community helps people to realize their role is probable and possible to be contributing to a successful venture. If we’re looking for a hundred people to undertake the scope and scale of the Preliminary Specification people would know intuitively that that’s not enough people to do the job and failure would be the outcome. I believe generally in my discussions with potential members of the user community that we’ve struck the right balance in terms of scope and scale of the tasks ahead of us. As the issue of oil and gas profitability becomes more evident to more people each day there is a greater realization of the need. Overall a large number of people within oil and gas have read the Preliminary Specification in its entirety. I know, I’ve been told a million times only put your ideas down in a half dozen points on a presentation because no one reads anything. What I’ve found since my first publication in 1996 is that people read.

People, Ideas & Objects competitive strategy at this point in time is the cognitive dissonance created in the potential user community participant who has read the Preliminary Specification. They know of a different and, I’ll state for marketing purposes, a better way. They can see the logic and integrated nature of how the Preliminary Specification functions. And they also need to function in the day-to-day of the existing environment that is not functioning profitably, which is being gracious, and are forced to use systems that are inadequate. This cognitive dissonance is the motivation that the user community participant will likely use to act when the budget is secured. The motivation being their own sanity. To continue without the hope of the change is too difficult for them to even contemplate. Therefore they may have already made the conscious decision with their families and are making tactical changes to their situation to accommodate the pending change. This is how you develop a user community.

So in terms of time I don’t see a decade passing before the user community is formed and we release commercial software. We’ll discuss tomorrow the “how” aspect of the user communities method of operation. Then we’ll be able to know the time necessary to do this work that has already passed. That is, the work has already been done in the subconscious minds of the people who are the potential user community participants. Now we only have to capture it in textual form.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.