People, Ideas & Objects Response to a Request for Proposal, Part X

 Our User Community & Their Service Provider Organizations

People, Ideas & Objects user community is our primary focus and priority. They are the means in which we can ensure that we’re building a quality Cloud Administration & Accounting for Oil & Gas ERP system.

The competitive advantages of our user community and service providers provide the following areas as their distinct competitive advantages. This is a fundamentally different basis of competition and one that overall provides significant value from the producer firm to the entire oil & gas economic structure. Approaching the overhead costs of the producers in a systemic and analytical manner and breaking down the individual processes into standardized, objective methods provides the industry with the overall value proposition of the Preliminary Specification. Each individual user community member will work part-time with our development team defining, designing, developing and implementing their understanding and the input of the producers into derivative products of the Preliminary Specification. They are the principal individuals of their service provider organizations that then operate the accounting or administration process on behalf of the industry. 

What you will not find here is any mention of price based competition. Service providers are setting their own prices for their services. And are provided with exclusive licenses to manage their specific process. All human endeavors are motivated by self interest and our user community and service providers are no different. However, their self interest is achieved when they focus on the task of providing the oil & gas producers with the most profitable means of oil & gas operations. And not have to concern themselves with another firm establishing a competitive service, based on price, that did none of the heavy lifting in terms of determining “how and what” was needed, and will continue to be needed, to provide the oil & gas producers with the most profitable means of oil & gas operations. The competitive basis of our user community enables them to get their head in the game and fight to ensure that producers are profitable everywhere and always by using these distinct competitive advantages. Leveraging these with their ability to exercise change in the software and methods of their process management and how they’re conducted in industry. 

The structure of the producers overhead through the reorganization to our Cloud Administration & Accounting for Oil & Gas service has turned these fixed costs variable, based on profitable production. Overhead costs will be recaptured in the current period, and therefore the cash incurred to fund overhead will be paid by the consumer and returned immediately to the producer. Replacing the twenty year process that exists today and the cause of the producers heavy reliance on investors for cash. It is these competitive advantages that provide substantial value to the producer firm. To be able to get to the root of the value generation demands deep analysis and complex work. Something that would be difficult in an environment where price competition was the primary concern.

What it is that the user community will compete upon is the following classifications of items. These will be the basis of a shared understanding between the user community that determines how one user member was able to leverage specialization to enhance productivity in their process by… When we factor in the time and sense of urgency in which this product must come to market, then this will be highly appropriate. This sharing will be collaborative and competitive. Seeking a performance and quality product on a never ending basis. This is the effective way in which the user community and their service providers have been configured in their licenses. 

The last point regarding our user community and their service provider organizations competitive advantages. Is the distinct specialization and division of labor between computers and the people involved in this community. Computers have excelled in the areas of processing and storing of data and information. People on the other hand have the distinct advantages that are listed below. This is a unique perspective in comparison to today’s oil & gas producers ERP systems implementation.

Accounting & Administration Expertise

Well trained and experienced in their fields, our user community members are providing the administrative and accounting expertise as their primary value add to the process. This applies to their service providers as well. As stated our Cloud Administration & Accounting for Oil & Gas service is a sub-industry between the technology and the greater oil & gas economy. Filling a gap that we see between the two as we feel they’re not communicating effectively. 

Analysis of Conflict & Contradictions as Analytic Tools

Conflict and contradictions indicate the source of the issue. Analysis of these two factors will help to reveal the possible alternative solutions. When we apply these in the business world the behaviors, communication methods and other factors can provide insight and understanding to issues and their resolution. These are part of the more advanced style of tools that will be needed to resolve the many exceedingly large issues the industry and our user community will encounter. 

Application of AI & ML

Artificial Intelligence is overrated in the marketplace at this time. AI is a module in the Preliminary Specification where we are able to establish effective and efficient algorithms from our user community that can be shared and are shareable across the industry. Offsetting the inordinate cost of each producer involved in the difficult business process of developing, testing and proving AI algorithms. Machine learning is a far more effective tool that will be valuable to the user community due to the unique perspectives they have on industry data. They’ll have data sets of the process they manage of the entire industry's data. This data set would be interesting to analyze from the point of view of its unknown unknowns. 

Automation

Automation will be invoked to ensure that the most effective and efficient operations are provided to those producers participating in these developments. Relieving the administrative and accounting resources to pursue higher level, value added opportunities. Reduction of costs in this sense is a worthwhile pursuit, not just from the point of view of the reduction of the costs. Reduction of costs implies high levels of automation are in play. Automation does not just reduce cost directly it does so indirectly through the reduction of error. Reduction of errors reduces time. What admittedly is becoming a more critical resource as we proceed through the 21st century economy. 

Collaboration

I noted earlier a collaborative, collegial environment would be the basis of the competitive environment between our user community and their service provider organizations. The basis of collaboration and cooperation is the importance of the work that they’re undertaking and their critical role in rebuilding the oil & gas industry. 

Compromising

Finding the solution in a world of difficult and complex issues demands that creative solutions meeting the needs of those parties are understood and accommodated. Although we are rebuilding brick by brick and stick by stick there are established industry methods, regulations and processes that need to be adopted. We need to bring about new ways of implementing them and organizing them. This demands that our user community members offer industry solutions that work for all concerned. 

Creativity & Design

It may be hard for some to imagine the concept of creativity in the field of administration and accounting. However there is nothing that will be more critical in the discovery, testing and implementation of new and innovative procedures that provide value to the oil & gas industry. We published the Preliminary Specification in August 2012 and soon after, in March 2014 began the development of our user community. As a result people within the larger oil & gas industry have had the model in the form of the Preliminary Specification and our user community vision in their minds for the better part of a decade. Understanding what their involvement could be, should they decide to join our user community based on the principles set out in these documents. Enabling them to prepare themselves, both directly and indirectly for the time when our development and implementation begin. 

Creative Destruction, Spontaneity & Serendipity

Each of these are established economic principles that have been eliminated from the business landscape of the 21st century through the development of software. The unchanging methods and procedures that software defines in organizations, and particularly the ERP systems locks organizations into unchanging and unchangeable situations that only serve the status quo. People, Ideas & Objects have established through our user community and service providers that they’re able to make the effective changes necessary to ERP systems that will be derivative of the Preliminary Specification. Establishing a permanent user community and software development capability is a necessity for businesses to continue to evolve throughout the 21st century. 

Explicit and Tacit Knowledge

Providing software in the marketplace is a small part of the solution today. What software does is capture the explicit knowledge and codifies it within the software processes management. It is the service that is affiliated with that software where the value of the software is derived. The service must include the tacit knowledge as part of the package offering, such as our Cloud Administration & Accounting for Oil & Gas. The software and service must be able to make the changes necessary to accommodate the accelerated pace of change in today’s market, and what we can only assume will be the case tomorrow. 

Ideas

The uniquely human element that will be in demand. The idea that generated a dollar today will produce a nickel tomorrow. The need to have exponential volumes of ideas will be a demand of the future in everything that we do. How these are captured and implemented in the software and the services provided here will be a necessity. And with the shared and shareable model these ideas, once proven, tested and appropriately implemented will be leveraged throughout the industry. Building value for all concerned.  

Innovation

People, Ideas & Objects at al’s Preliminary Specification and these supporting services are structured under the basis of innovation. Our research into the Preliminary Specification determined that innovation is a defined and replicable organizational process. These have been incorporated throughout this sub industry that we’re building. Importantly our user community and their service providers are able to affect the changes that are needed to facilitate the oncoming innovation in efficient and effective ways through the design of their organization.  

Integration

Integration or implementation falls under the domain of responsibility of our user community and their service providers. These are the critical components and the final steps in ensuring the quality of software and services we’ll be providing. Integration begins on day one of the development in terms of the planning and preparation of these changes. It will be our user community members who will ensure that their service providers are appropriately implementing their processes management throughout the industry. As the principal owner of the service providers they’ll be duly authorized and the responsible parties.

Issue Identification & Resolution

“Muddling through” is over. They’ll be no more ignoring the issues in oil & gas. People, Ideas & Objects are providing the tools, methods and organizational constructs in which issues are addressed and resolved. We see that software is the issue in that it is sealing organizations in concrete. Which is good from a governance perspective, however it must be innovative and capable of change in order to achieve the higher level performance trajectory of a dynamic, innovative, accountable and profitable organization in the 21 century. This will be an order of magnitude more difficult than what the culture of oil & gas is currently familiar with. As difficult as the situation in industry appears to be today. Consider how much simpler it was only a decade or two ago. What will it be in a decade from now in terms of the issues and opportunities that these firms face. To be unprepared as we are today is dangerous. 

Judgment

Not a distinct competitive advantage of computers. A uniquely human characteristic that will be the basis of understanding for the remainder of this century and as long as we choose to. Oil & gas is being seen for the value that it is in the consumer marketplace. Unfortunately for the risk of shortages and its impact on civilization. Setting the proper landscape for a more dedicated environment in which oil & gas can prosper and conduct its business operations. What is our judgment regarding the capability and capacity of the current producer organizations to realize these opportunities?

Leadership 

I expect that our user community will provide leadership in terms of the administration and accounting of North American oil & gas producers. An expectation that includes the development and evolution of the business model and “what, how and why” the industry earns its profitability. The objective and standard basis of how that is evaluated and provide the industry the tools to evolve at the speed and capacity necessary to meet its future demands. 

Negotiating

Negotiation and compromising on the basis of the interactions between producers and our user community will occur on a frequent basis. Compromises and negotiations on the Preliminary Specification however can not and will not occur. The business model is integrated and wholly dependent on that model functioning together. Changes at the Preliminary Specification level may have implications that are unknown in other areas of the system. If these changes are necessary then these can be analyzed and corrected based on the best understanding, once developed. 

Planning

Planning in a dynamic environment is a futile activity at times. It however communicates to participants the information necessary to begin the process. It is the first step. 

Quality

Define it, clarify it, communicate it and ensure that it's implemented. It used to be when you drove downtown to go to work in the morning, and when you returned at night. You would see 2 - 3 cars broken down on a 15 mile trip. This was the opportunity that Japan exploited to enter the North American auto market. They introduced reliability. Software is going through a period of higher reliability primarily due to the cloud computing era having the ability to secure the environment of software and services operations. Phones are far more sophisticated than people realize with Steve Jobs starting in the mid 1980s when he was fired from Apple. And Sun Microsystems with the commercial release of Java in 1994. Cloud Administration & Accounting for Oil & Gas, standardization, objective accounting and other methods will secure higher reliability on top of these technologies. And there is so much more that can be done by a duly authorized and capable user community. 

Research

The abundance of primary research today is as we would expect in the 21st century. We can choose to stand on the shoulders of giants, or recreate it again if we like. The amount of primary research that has been unused at this point is probably larger than what has been implemented. There is rich ground here for value generation to those that can begin to turn these ideas into reality in oil & gas. In light of all the competitive advantages listed under our user community, putting research under their domain is a natural fit. We see this as highly complementary to the research that People, Ideas & Objects have listed as part of their competitive advantages. 

Specialization & the Division of Labor

We’ve covered this extensively in all areas of this RFP Response. It is the source of all economic value generation realized since 1776. However, software disables its natural process of development by “gap-filling” when it has no capacity, and the organization has a vested interest in the status quo. Producers have relied on “cost cutting” to generate value for decades and have nothing to show for it but a fundamentally destroyed service industry. Specialization & the division of labor in terms of development of our user community and their service providers will be continual. And they will be introducing the same throughout the greater oil & gas economy.

Thinking

The contrast between “doing” and “thinking” may grow more significant as we proceed through the 21st century. Writing is thinking. Time and the speed of organizations to provide their basic functions, such as oil & gas, is in jeopardy today. “Doing” more may not resolve the issue. Getting ahead of the game may be a thing of the past and a luxury we can tell our grandchildren about. What we’re faced with today is an environment that will demand testing of hypotheses of various scenarios of possibilities and assessing the different outcomes. Determining what is right based on what will work to generate value for the firm. An environment where what the individual gets out of it will be based on the value they’ve generated. 

People, Ideas & Objects Response to a Request for Proposal, Part IX

 Competitive Advantages

We turn now to the distinct competitive advantages of the three separate and somewhat distinct elements of People, Ideas & Objects offering. These consist of three separate groups of organizations that make up this sub-industry, the sub-industry we’re creating here between the technology providers, the oil & gas and service industries. These consist of ourselves, our user community and their service provider organizations. Each providing a component of the Cloud Administration & Accounting for Oil & Gas software and service we’re offering. 

People, Ideas & Objects

The three competitive advantages that we’ve selected that match our competitive strengths are our user community, Intellectual Property and research. 

Our User Community 

Quality in a product or service, much like profitability, is hard to achieve. Implementing a tier 1 ERP system to an industry on a revolutionary, disintermediated basis is in summary ambitious. A rebuilding of a dynamic, innovative, accountable and profitable North American energy independent oil & gas industry is needed for the long term. We’re not setting out to tear down the industry to conduct this rebuilding. Officers and directors of the producer firms have done that destruction. Delivering the Preliminary Specification to all classifications of producers brings about additional challenges that have not been attempted in any industry. Now add quality. Can this be done? Not on the basis of the industry's current point of view, attitude or method of operation. In a word the cultural inertia against our success would assure us a 100% failure rate. A 100% exhaustion rate and a high probability of systemic mental health difficulties for all concerned. It would leave the producers the viable scapegoat that they’re the only solution, all else had failed. 

The point needs to be made that what has been done by the oil & gas producers doesn’t satisfy today’s market need. As with the inability of the Soviet Union to feed its people, organizations eventually exhaust their ability to meet the demands of what they’re established for. The structured hierarchy can no longer operate effectively or efficiently enough to meet the needs of any aspect of the greater oil & gas economy. The producers, service industry, and critical resources of both financial, operational and political frameworks are all structurally and financially depleted through long term unaddressed issues created by producer officers and directors. Our proposed method of rebuilding the greater oil & gas economy brick by brick and stick by stick is therefore the constructive approach. 

It is here that we can look to our user community for their leadership in terms of the business aspects of this rebuilding. People, Ideas & Objects have provided our user community with the power and control over this rebuilding process through our user community vision. There we find two distinct policies that enable them to instill the quality and leadership that such an initiative requires. 

Only user community members are authorized to prepare derivative works to the Intellectual Property of People, Ideas & Objects. 

Our development team is authorized to only look to the user community for their direction and needs. They are operating at the behest of the user community and are deaf dumb and blind to all others. 

Therefore if anyone from industry needs or desires to have any aspect of the Preliminary Specification dealt with. They will only need to speak with the appropriate user community member(s) that are responsible for that area. Providing a resource for all those in the industry to have input and a say in what it is they need to do their jobs. A resource that is permanent, along with our development capability to provide for the changes and enhancements that producers need and desire to continue to achieve the dynamic, innovative, accountable and profitable objectives they set for themselves.

I’m only briefly introducing the competitive advantages of our user community here. There is a section below detailing and describing their specific attributes and how they’re applied. 

Intellectual Property

We’ve covered this area fairly extensively in its Organizational Construct section of this document. IP forms the basis of our strategic and operational approach to the industry. We do not see IP being as much of a legal construct as it is the political and cultural foundation of how the western economy and its civilization now operates. With software dominating industries, or having the potential to do so, the underlying value and protection of that asset class is held in the IP that software is derived from. Organizations involved in this western cultural economy are law abiding citizens and uphold the rights of those claims by those software companies. This particularly is the case with software companies where the use of other firms IP is carefully managed and only used in contractual agreements. The value of Intellectual Property is best expressed in what we describe… 

it’s no longer enough to own the oil & gas asset, it’s also necessary to have access to the software that makes the oil & gas asset profitable.

While we were operating in the 1990s this was not the case. Intellectual Property was more of the wild west in terms of whoever had the largest armament had the largest opportunity. The development and respect of IP in the 21st century, particularly in the software industry, has been necessary and dramatic. It has been necessary from the point of view that the much needed innovation and development of intellectual thought and leverage of our economy can be undertaken. Much as mechanical leverage benefited society in the 20th century. 

We will continue to apply our IP in the manner that we have. It is our desire and we are pursuing the opportunity to resolve the issues in oil & gas as an operational software and service related sub-industry through our Cloud Administration & Accounting for Oil & Gas. The continued consequences of the actions of the North American producers have been highly consequential. We see the industry making a decided move towards SAP’s ERP offering as it is the only other tier 1 ERP offering in the market and doing so in order to satisfy producer investors' demands. If this scenario continues, this would preclude People, Ideas & Objects et al from continuing as an operational software organization. 

Research

Our capacity and capabilities in the area of research of oil & gas administration & accounting is proven to be of value to the industry. The issues we identified in our May 2004 publication and resolved in the Preliminary Specification in August 2012 have now become the primary concerns of the industry. As we had suspected and were concerned at that time, if the issues industry was facing remained unaddressed, they would lead to an existential crisis for the industry. With devastating, fallout consequences to society due to the mechanical leverage derived from each barrel of oil. Officers and directors chose instead to continue to run their firms for their personal interests. Without concern for their fiduciary duties and greater responsibility to conduct and operate a profitable business. 

It should be noted that we were ridiculed by these individuals who said profits don’t matter. Profits always matter. Running a profitable business is fundamentally different from taking investor money and spending it. It is difficult, challenging, it takes skill, courage and fortitude to achieve, persevere and provide the necessary leadership. None of the characteristics or culture of what we’ve seen from those who stated profits didn’t matter. They’d “muddle through.”

I’ll also note that today the consequences of running a profitable operation are not within the domain of understanding or the culture of the oil & gas industry. The litany of excuses, blaming, viable scapegoats, “muddle through,” “put cash in the ground,” and other nonsense permeates the culture. A culture that has now failed to meet the market expectations of its needs. Maybe not today, Europe is our warning, but we’re headed in that direction. Running a profitable operation is the only source of capital that is unlimited. Limited only by one's imagination which answers why we’re in this existential crisis. The complaint that investors demand everything to be done in the short term quarterly reports is a viable scapegoat used by all public companies. It misunderstands that if the organization pursued profitability everywhere and always they would meet their investors demands and have the resources they needed to fulfill their market opportunities. If industry wants to do this or that, if this is the direction they want to move to then a profitable operation will provide them the opportunity to pursue those areas. If the new investments don’t turn out then they’ll pay severe consequences of diminished profitability and difficulty in moving forward with their next initiative. Such are the perils of a profitable operation. There are far more capital resources available to those that can run a truly profitable operation than any investor class. This fact is either lost in the cultural malaise, conveniently ignored through bureaucrat mismanagement or it could be they’re just busy coming up with more excuses. 

My frustration is that this societal mess we find ourselves in was unnecessary and avoidable through the adoption of the Preliminary Specification in August 2012. People, Ideas & Objects provide a mid to long term solution to the problems being experienced in the marketplace today. Those that had the responsibility and authority to act and deal with this appropriately did nothing other than to fight this initiative with underhanded, cheap tactics. It is not that they did not fully comprehend the issue or the solution that People, Ideas & Objects have been promoting. If they didn’t understand the issue or our solution why would they have undertaken these tactics towards People, Ideas & Objects? 

The results of our research today shows. Society in general does not have the time or luxury in this fast paced world to satisfy personal concerns at the cost of the fiduciary duties and fulfilling one's roles, responsibilities, authority and undertaking the appropriate accountability. People, Ideas & Objects concern is we’re well behind the time necessary to turn this around. Possibly seven years before we’ll be able to do so. Which may be more time than our issues allow. And in that seven year time frame the development and implementation of the Preliminary Specification is a small fraction of the total work and effort that will be needed to be carried out across the entire North American oil & gas industry. 

People, Ideas & Objects Response To a Request for Proposal, Part VIII

 Information Technology

Our next organizational structure that defines the way in which oil & gas producers operate in the Preliminary Specification of People, Ideas & Objects, our user community and their service provider organizations is the Information Technology environment and the revolutionary impact that these have had on business in terms of enhanced productivity, performance increases and leveraging value out of a firm's business model. The promise of additional performance and productivity enhancements are available as these technologies have matured and are more integrated to provide their consumers with substantial value. 

The key technology today and the one that we’re leveraging in this community is the establishment of cloud technologies. Introducing a shared and shareable cost model across its users. This is how People, Ideas & Objects et al sees Information Technology materially affecting the performance of producer firms. With cloud computing, instead of incurring large capital, infrastructure and operating costs to acquire their IT capabilities, users are able to access these needs as a variable monthly operating cost, variable based on usage. The shared and shareable cost model doesn’t just end there. The producer's users are provided with the most recent applications and the quality of technology service and support is enhanced through an enhanced and constantly evolving definition of specialization and division of labor. Cloud computing is expanding throughout the business community due to the capability of accessing the IT resources that businesses need and want. One that provides a lower overall cost, yet provides the full value of IT that would otherwise demand that each company invest in unique capacities and capabilities outside of their competitive advantages, and demand significant corporate resources and focus in order to build, achieve and maintain.

 People, Ideas & Objects see cloud technologies as revolutionary to oil & gas. Having oil & gas producers accessing the same state of the art IT capabilities, capacities and infrastructure at low, variable and affordable prices will enable the opportunity for producers to participate in the anticipated future performance, productivity and value enhancements that they choose to. We also see a further extension beyond the IT infrastructure, software, service and support. We have adopted the shared and shareable cost methodology of cloud computing and applied it to the oil & gas administrative and accounting processes and functionality conducted in the Preliminary Specification software, our user community and their service provider organizations. Introducing the Cloud Administrative & Accounting for Oil & Gas service to North American producers.

If we look at the difficulties of “what, how and why” producers are consistently unprofitable. We see high overhead costs incurred within each producer that are what we consider to be the secondary cause of a systemic lack of corporate profitability. Building the necessary administrative & accounting capacities and capabilities, particularly in this regulatory environment, is costly to achieve and maintain. It’s also incurred individually by each and every producer on an independent and isolated, or unshared and unshareable basis. These are not core strategic competitive advantages. We are faced with the same issues that the earth science and engineering resources are faced with as a result of their advancement of specialization and the division of labor. The need for the resources to cover each and every aspect of the corporate administrative and accounting demands has or will soon breach the commercial capacity of all producer firms. I would assert that happened decades ago. People, Ideas & Objects' multi trillion dollar value proposition should show that the need for attention in the area of managing the business more effectively and efficiently is necessary, desirable, achievable and tangibly valuable. A shared and shareable business model through our Cloud Administration & Accounting for Oil & Gas will attain variable administrative and accounting state of the art capabilities and capacities. Providing lower costs from two distinct perspectives that are unavailable in the current business model. From an overall industry and individual producer perspective, a lower cost due to the shared and shareable nature of these services. And, due to their conversion to variable nature overhead will only be incurred when profitable production is attained. These are just a few of the methods from our focus on providing oil & gas producers with the most profitable means of oil & gas operations. 

When we listen to customers who have implemented Oracle Cloud ERP applications within their organizations there are a number of consistent messages coming through that I find interesting. The first is their roles as senior management and officers of their firms change to begin dealing with the prospective changes that are coming in the quarterly release or upgrades of the Oracle Cloud ERP offering. These are now in the area of around 200 individual additions per quarter. Note, additional changes will be made when the Preliminary Specification is operational in addition to this volume of Oracle changes. 

People, Ideas & Objects would ask, based on the selection of which ERP solution is determined by the Board of Directors, how many of these quarterly changes will be the concern of the producers senior management and officers, or be handled on their behalf by our user community and their service providers. The majority of these changes would be handled by the user community under the People, Ideas & Objects et al model and implemented, maintained and supported by the service providers. With input from the producers being funneled through to the user community, consolidated and optimized from the producers point of view. Let’s call this a shared and shareable senior management and officers role. Ensuring effective and efficient management of the producer's processes, both from a time, effort and cost perspective. Which brings up an important question. Who can effect change of this entire ERP ecosystem as proposed by People, Ideas & Objects et al? It is the greater oil & gas economy and most specifically the producers who our users who have the power to make those changes will look to for input of any and all information. Our user community are deaf, dumb and blind to any others, however share my allergy to bureaucrats. Our developers are deaf, dumb and blind to all others except our user community. 

The traditional approach to having a unique ERP system that caters to the needs of a specific industry is to customize the vendor's application to do so. This is frowned upon by Oracle and recommended not to be done. People, Ideas & Objects have adopted Oracle’s policy in our user community and service provider licenses. Stating that all customizations of the application are to be avoided at all costs. This certainly seems to be at odds with what it is that we’re doing. The point is subtle and is a unique characteristic of the Oracle Fusion Applications. Other than Workday they are the most recently written applications of all ERP systems. They were the first to be written in the Java Programming Language which introduces the full object model to those applications. Providing the characteristics of inheritance, encapsulation and polymorphism. The Fusion Applications are supported by Fusion Middleware which is an enhanced Java Server with expanded function and process management that is generic and written by the Oracle Fusion developers. This is the base of the Oracle Fusion Applications. It is also the base of any “additions” that are written to provide industry specific application capabilities to the Oracle Fusion Applications. Enabling People, Ideas & Objects to embed the oil & gas industry features directly into the Oracle Fusion Applications through the Oracle Fusion Middleware as “additions.” 

This is opposed to the industry customizations which would traditionally sit on top of the ERP application. Oracle’s method avoids a key difficulty in the environment where the needs of the users are dynamic and changing. Any system changes at the Cloud ERP, or Fusion Application ERP level are therefore not going to break any of the customizations that sit on top, as there will be nothing there. The new quarterly release of Oracle features will be embedded with the “additions” from People, Ideas & Objects and therefore, as they too are Java object based, independently updated as well with their own new and unique features, unaffected (encapsulation) by them without any of our additional developer involvement. Yet, I am satisfied that our application code base is separate and distinct from the Oracle Fusion Middleware and Fusion Application code. Maintaining full control over the Intellectual Property that is a key source of People, Ideas & Objects competitive advantage. I have to mention another unique characteristic that will soon be available to the Oracle Fusion Applications and Middleware. A feature that they’re calling “Fusion - Future Zero Down Time.” Seems self explanatory. 

This next point is one of contention between the IT community and those within the business community. It is a method of implementation that is becoming increasingly the norm and the more successful method of ERP implementation. It goes by the name that I’m fond of and captures it most effectively, that is “rip and replace.” I subscribe to it simply for the time element of the roll out of the Preliminary Specification when completed in its commercial release. Please note it is the domain of our user community and service providers who will be planning and conducting the implementations for each of their individual processes themselves and of course the producer firms. At this time rip and replace is the most appropriate implementation methodology for a rebuilding process.

Time is the demand that should be focusing the minds of the producers on dealing with their shareholders issues of accounting integrity, accountability, tier 1 ERP systems use and the melting down of their financial position due to absolutely no capital structure. People, Ideas & Objects primary issue is that we are conducting this across the North American producer marketplace. Therefore the need to focus the energies of the industry on this task will need to be a priority. Both from a software development and implementation point of view. Otherwise the industry will just melt down and oil & gas will have failed in its primary role of providing affordable energy to the North American consumer. North American’s will become dependent on foreign sources of energy to meet consumers' needs. And as we’ve noted the most powerful economy in the world is also the largest consumer of energy. These foreign sources of oil may therefore deprecate us from that traditional economic role. 

People, Ideas & Objects have chosen to pursue our user community, research and Intellectual Property as the three areas of focus for our competitive advantages. Note that none of these involve the development of the software code. We’ll own and provide the software code that is derivative of the Preliminary Specification and our Intellectual Property. We have contracted all of our software developments to Oracle Corporation. Their services division are well versed in their ERP products and are ready and capable. We believe we would need to dedicate at least a half decade in order to assemble a team of the size capable to deal with this project and then an unknown amount of time necessary to turn them into a functioning capable team competent to put out the quality of software necessary. We’ve been working on the development of the user community since the first quarter of 2014. A task we’ve assigned as our priority since then and one that differentiates our product offering in terms of quality. Time is not the commodity available to the producers at this stage. The time we’ve invested in developing our Intellectual Property and most importantly our user community will offset industry needs tremendously. Contracting Oracle in this manner extends this time advantage. Focusing on the IP and our user community aspects of this project will be a better use of our time, resources and skills. It is also where we see the value in the software business. It is consistent with our belief that specialization and the division of labor will need to be applied to all aspects of the economy and by doing so we are able to do a better, more productive job.

If directors believe these ERP developments can be done within their organization then why haven’t they happened? Our scope of application development in the Preliminary Specification would be considered equal to what each and every one of the producers would need to undertake if they chose to continue to go it alone in the unshared cost model. The main difference is in terms of scale. To acquire just the depth of understanding and detail necessary of the Oracle ERP Cloud offerings would require the same costs being replicated across the industry in each and every one of the producer firms, assuming producers had a timely, oil & gas, workable, profitable business model. I could be reading things differently in terms of timing and expectation of the producer investors and bankers. 2015 was when investors began to express their discontent with the industry at large. The industries lack of performance, accountability and transparency were identified as issues by them at that time. I would never have assumed that the better part of a decade of inaction was a tolerable amount of time. 

I should state here that the bulk of this RFP Response is being written as a derivative of the one that I wrote specifically and is entitled “To the Board of Directors, Our RFP Response…” in late June and July of 2021. I raise this point as after 17 years this blog receives a high distribution across the North American producer population. Yet not one phone call or any other method of communication was used by any of the producers at that time to contact People, Ideas & Objects. A unanimous…, we all know the slang term that was implied here.

I personally have been working on bringing ERP systems to the oil & gas market for thirty years. Our first attempt in 1991 failed in 1997. This initiative began in 2003 and there have been other failures. There are few ERP providers available in the market today and nothing else that is a dedicated development towards oil & gas with a tier 1 provider. The benefit that I’ve gained from this latest initiative is that copyright law is now upheld in all marketplaces and I’ve secured what it is I’ve developed. My point in this is to suggest that oil & gas companies have mistreated the vendors of oil & gas ERP systems development in the three decades I’ve been involved. Much as it has mistreated the service industry, its investors and bankers, not saying anything about their current and former employees. The need to financially support these initiatives from the primary revenues of oil & gas sales is now a result of this mistreatment and a reality that has yet to be realized by producers. Just as there are no oil & gas producer investors, there are no investors that are interested in anything associated with oil & gas. 

To the point of Intellectual Property. It is the basis of all software. No software vendor is going to violate another's Intellectual Property. SAP or any other reputable company would adhere to those principles as that is the basis of all of the value of their firm. It does them no good to be violating others IP. Therefore the producers will be left to develop their own systems and may, or may not adhere to respecting Preliminary Specification and People, Ideas & Objects Intellectual Property. That would be their choice and we would transition from an operational software company to one in which we ensure our IP is respected. Alternatively each producer could come up with their own methods of ERP software development and fight it out amongst themselves as to who owns what. This is after the money necessary to fund all those developments has been spent and the IT resources that were consumed in the process are sent on to their next industry with all the other service industry resources to find gainful employment elsewhere. As I’ve stated, administration & accounting are not distinct competitive advantages of the producer firms. 

Although I feel highly productive today, that will not be the case in thirty years. Who’s coming into the field with the scope and scale of opportunities that are being presented in the marketplace that these producer bureaucrats have created. What Intellectual Property will those that enter in thirty years bring, and conversely after consideration of People, Ideas & Objects et al, what IP can they bring? It may be surprising for producers to learn that there are other industries that are dynamic and exciting right now. I can conclude that I am stuck with the consequences of my choices and am able to live without regrets of what I’ve done. I doubt those that follow me will feel the same after they’ve put in the three or more decades of effort necessary to generate that first penny of revenue from oil & gas producers. And that assumes People, Ideas & Objects will make it to that point. Conversely, who do I appeal to now that the Boards of Directors have failed to act and fund the Preliminary Specification? Alternatively, the better question may be who do producers go to for funding in the future when its proven directors don’t care about investing in their organizations profitability, or even oil & gas?

Throughout our writings we have alleged the accounting conducted by producers over the past four decades, and particularly the profitability reported, is specious. That overhead and other costs are handled inappropriately. Depleting cash on a chronic basis and raising serious governance issues that have now resonated throughout the investment community and elsewhere. This accounting allegation of ours is that the specious accounting methods conducted throughout the industry have been obscured through poor ERP systems that were deliberately created through producers' bureaucratic mismanagement. Governance over the quality of the accounting and the companies systems has become an issue at the level of the board of directors in the last few years. Due to a direct ask by their investment community. There are no tier 1 ERP systems providers selling oil & gas systems today and more importantly, outside of People, Ideas & Objects et al no interest. Again, SAP sells an oil & gas system to producers however it is inadequate for oil & gas. A valid question may ask, how much of these producer issues are attributable to poor SAP systems? It has not been the case that there was no opportunity for producers to participate in the development of these systems. 

A purpose built oil & gas ERP system will need to be developed on a tier one systems vendors platform in order to implement a governance model that will satisfy the investment community. People, Ideas & Objects uses Oracle Cloud ERP. The unquestionable leader in ERP systems according to Gartner. With our Preliminary Specification, our user community and their service provider organizations we’ll be providing a comprehensive and complete oil & gas solution in our Cloud Administration & Accounting for Oil & Gas software and service offering. One that provides a comprehensive value proposition in the form of reducing the infrastructure, operation and maintenance of each producer's overhead costs. And turns what remains of those costs to variable, based on profitable production. 

People, Ideas & Objects Response to a Request for Proposal, Part VII

 Markets

In terms of the Preliminary Specifications marketplace modules, we have the Financial, the Petroleum Lease and Resource Marketplace modules. Each replicating the three primary markets of which a producer is actively participating on a daily basis. Seeking to profitably and innovatively apply their distinct competitive advantages of 

• coordinating the markets of earth science & engineering capabilities 
• their land & asset base. 

The Petroleum Lease Marketplace module is as one could imagine. An opportunity to post, bid, purchase, sell mineral rights and producing properties in the marketplace that exists and is replicated virtually within the Petroleum Lease Marketplace module. Everything from the opportunity to participate in a joint venture to establishing and ensuring the surface rights payments is fully supported by the Cloud Administration & Accounting for Oil & Gas of the Preliminary Specification. Our ERP product sits on top of Oracle ERP Cloud which includes their tier 1, Oracle Fusion Applications that Gartner rates as the highest quality offering. These oil & gas Marketplace modules include the data of the Federal, State, Provincial, Freehold and Offshore leases. An opportunity for industry to consolidate on a dynamic platform which uses proven tier 1 technologies with the constant support of the service providers maintaining transaction administration and accounting in a standard and objective manner. 

This will be enhanced with the constant iterative design and development being undertaken by People, Ideas & Objects user community and developers on a permanent basis and available through our Cloud Administration & Accounting for Oil & Gas service. Whereas if a jurisdiction reviewed and changed their royalty rates at some point, in terms of either the rate or method calculated, producers would not need to concern themselves with the administrative or accounting aspects of those changes. The user community, developers and service providers would have them covered and implement the necessary changes in the software and services in a timely and accurate manner. Producers would only need to deal with the issues regarding any revised royalty costs and performance consequences. 

As with the Resource Marketplace module we see many changes in this oil & gas marketplace. Which I would think producers would welcome at this point as financing is next to impossible for producers and particularly the service industry. Moving to the Joint Operating Committee as one of the Organizational constructs of the dynamic, innovative, accountable and profitable producer is achieved in the Preliminary Specification. We noted that the movement of the knowledge to where the decision rights were held, which is the Joint Operating Committee, enhances accountability. It's here that the Financial Marketplace enhances that accountability with the board of directors' interaction with their current and prospective shareholders and bankers. A review of the Financial Marketplace modules specification would be the best source of information to capture an overall understanding of the module. There is also the standard and objective nature of the accounting that is conducted throughout the Preliminary Specification and the service providers. Consider if that would satisfy some of the issues that investors and bankers have raised regarding their investments and loans in the industry? Whereas with the Preliminary Specification everything being produced is profitable and the producers are seeking to maximize their profits by shutting in unprofitable production. 

The demos for the Marketplace Interface were prepared by the underlying technologies that are available to us. These were prepared over a decade ago. Much has developed in the technological environment since. There are many points that I would argue that are different today which include.

• The work from anywhere and its enhanced productivity of employees.
• The co-mingling of professional and personal lives, the reduction of redundant travel times and archaic rituals has had a marked increase in the performance of white collar workers being engaged over a 12 to 14 hour day. 
• Zoom induced hell. (The demand to always be on camera.) 
• Turning cameras off for peace of mind is now a necessity to this ball and chain. All to satisfy one’s immediate supervisor's demand for command and control through continuous mandatory attendance.
• The lack of ERP tool support availability.
• Search, contracting, buying, selling, financing, billing, paying, marketing etc. What is currently being done in the ERP area of oil & gas vs what could be done in a hybrid ERP with a marketplace interface could not be more stark. Oil & gas is in the dark ages.
• Proliferation of bots. Both good and bad. Note, Oracle’s Cloud ERP now has “good” bots that fight the “bad” bots that may be attempting to get in. 
• “Always there” capability. 
• The establishment of permanent, virtual real estate for your bot’s and organization. 

Looking at the establishment of IT in other industries where technology has been embraced we can ask some interesting questions. Why is there such volume on the stock exchanges today? What are all those algorithms doing? It’s been more than two decades that they’ve existed. How is it that NASA, Ford and GM can all be collectively outperformed by Elon Musk? And how is it that oil & gas is generally and rightly regarded as having many of the best science and engineering Information Technology available to it. Yet its business is about to be thrown on the trash heap of history? 

The economic principles of markets and price discovery are two of the mechanisms by which North America has advanced its overall quality of life. Adoption of these within the oil & gas industry are therefore a necessity and the Preliminary Specification has done so as part of the structures that define and support these industries. Our decentralized production models price maker strategy relies on the principle of oil & gas commodities being priced based on these satisfying the economic definition of a price maker. The need for producers to produce only profitable production, after full consideration of all of their costs on a timely and accurate basis, is how they’ll operate under our ERP system and service provider offerings. Using all of the information contained within the commodity markets price, (production, inventory, consumption, reserves) to determine profitability and ultimately what will and will not be produced. It is the same mechanisms that are involved in every transaction involved in a free market. 

From the Preliminary Specifications Resource Marketplace module we quote from a paper written by Professors Richard Langlois and Nicholas J. Foss entitled “Capabilities and Governance: the Rebirth of Production in the Theory of Economic Organization.” they note.

The organizational question is whether new capabilities are best acquired through the market, through internal learning, or through some hybrid organizational form. And the answer will depend on (A) the already existing structure of capabilities and (B) the nature of the economic change involved. p. 21

And

If by contrast, the old configuration of capabilities lies within large vertically integrated organizations, creative destruction may well take the form of markets superseding firms. History offers many examples of both. p. 21”

And

Either way it boils down to the same common-sense recognition, namely that individuals - and organizations - are necessarily limited in what they know how to do well. Indeed, the main interest of capabilities view is to understand what is distinctive about firms as unitary, historical organizations of cooperating individuals. p. 17

We first need to discuss two components of how I see one of the marketplaces in oil & gas. The reliance on the field service industry providers to extend the producers capabilities and capacities into their regions of interest. For producers to own and operate their own field infrastructure would otherwise be an impossible impediment and constraint towards progress. The second component is the history of abuse and disrespect that producers have displayed and presented to the service industry over the past forty years. And particularly since 2015 when the producers recognized their financial difficulties were amplifying. The assumption that oil & gas is a boom / bust industry has been accepted over the long term by these producer bureaucrats. All other industries sought to work these issues out of their businesses and industries many years ago. It is this continuing acceptance that has left us with a legacy of maybe five good years out of the past thirty five. Officers and directors don’t understand this point as they’ve experienced thirty five years of excellent compensation. 

Producers assume the service industry needs to adjust to the boom / bust trend in lock step with the producers. There is an implied assumption that the service industry, like the oil & gas industry itself, enjoys revenues as a primary industry and therefore continues business as usual during the bust cycles. The diversity of the service industry offerings, and their coverage across the various regions of their operations throughout North America spreads them relatively thinly. As secondary industry participants they are not as resilient as the producers believe them to be. The collapse of their revenue streams into the low teens in terms of percentages has been devastating.

Now the consequences of this downturn have destroyed much of the service industries capacities and capabilities that were once available to producers. This decline in support since 2015 on top of the cumulative difficulties administered the many decades prior by oil & gas producers has created the situation where it will be difficult for many of them to survive. The largest service industry providers have left the continent as a result of the abusive treatment they’ve received. Therefore working out the boom / bust cycle through our price maker strategy will go a long way to rectifying this issue in the long run by providing a stable environment, or constant level of demand for which the service industry can prosper. However, investors in the service industry have had it for the remainder of this millennium. They invested in good faith and were abused by the producer firms. They’ve witnessed the equipment they invested in being cut up for scrap metal to pay the light bill and taxes on the shop. This was primarily due to the producer bureaucrats determining they could get away with leveraging additional field activity by not paying their bills for 18 months after the jobs were completed. As their last source of capital necessary to keep the show continuing. The dilemma today is who’s going to provide the financial resources for the service industry to recapitalize itself and reestablish the capacities and capabilities that will be necessary for a self-sufficient and profitable oil & gas industry? The Resource Marketplace module engages the producers and service industry participants in constructive discussions regarding the business of the business of the oil & gas and service industry business. 

This is what’s known and understood in the market today, it’s not news. Producers will expect the service industry to dance for their dollars just as they’ve always done. If People, Ideas & Objects are correct and no one’s going to play that game, what would be the result. I would point to the example of the history of the ERP providers in oil & gas over more than the past three decades. I can report there is still no consideration whatsoever of a second chance these first tier ERP providers will be riding to the rescue of the producer firms. Why, they feel the industry is too complex, too costly and there are not enough producers to be able to negotiate their sales prices fairly. The last two tier 1 ERP providers left in 2000 and 2005, as documented on page 17 of our White Paper, due to the inability of producer bureaucrats to pay for their software development in advance. Producers have never paid for any ERP systems anyways, so why start? 

Producers have had over a decade to invest in the Preliminary Specification to make their organizations profitable and to avoid this inevitable, predictable and disastrous outcome but didn’t. Not a penny has been spent on People, Ideas & Objects at any point. Therefore producers will be paying for all of the costs of the Preliminary Specifications development and user community in advance. The need for skin in the game is the apt approach when so many ERP providers and their investors have been betrayed so comprehensively. This will be the necessary approach throughout the oil & gas producers industry-rebuilding process.

As the producers sit upon the primary industries revenues they so enjoy. (And mostly for enhanced, innovative, executive compensation. I do question what's in those capitalized overhead accounts we never see.) Officers' and directors' inactions have consequences which have been wholly detrimental to everyone else in the industry. They will no doubt argue, rightly, this does not remind them of what markets and price discovery should look like. Correct, it's what’s necessary after the destruction of the markets they’ve caused. It is the rebuilding process. These facts on the ground are what bureaucrats refuse to consider or admit. Until they do the industry will be plagued with problems. And they’ll never admit this, what they will do instead is they’ll just leave which is the historical action other bureaucrats have taken in other industries since 1929. Which is possibly what they’re doing in their transition to clean energy. Taking the oil & gas revenues with them. These issues need to be dealt with and I am unaware of any other solution. The need to rebuild these industries brick by brick and stick by stick must be financed by the only means available. The primary industry revenues of the oil & gas industry. Facilitated through the Preliminary Specifications decentralized production models price maker strategy and active participation in the development of the industries that support the Primary industry of oil & gas. Or in other words, ultimately the consumers. Granted there will be those within the service industry that will continue to scrounge for the pennies falling from the bureaucrats pockets. However, that does not create the dynamic, innovative, accountable, profitable and energy independent oil & gas industry that we need.

People, Ideas & Objects Response to a Request for Proposal, Part VI

 Innovation

The reason People, Ideas & Objects et al needs to be concerned about the startup to junior sector as much as any other classification is purely for the fact the industry’s rebuilding will be done on an innovative basis. Innovation is the basis of the Preliminary Specification. It enables People, Ideas & Objects, our user community and their service providers to achieve our two opposing objectives of providing oil & gas producers with the most profitable means of oil & gas production everywhere and always, and providing consumers with the lowest possible cost of an abundant energy supply. We do this with our decentralized production models price maker strategy that ensures all production is produced profitably. Including Exxon’s, Shell’s and that startup oil & gas firm that began this morning. And to do so innovatively to ensure that the ever escalating costs of oil & gas remain affordable to consumers and the commodities production profile and reserves continue to expand. Achieving profitable, North American energy independence.

Enter two variables that were not available in prior decades and centuries. The cloud computing era with the maturation of the overall technological infrastructure that is best represented by the Internet. We are at the infancy of what the Internet can provide. And the second variable being the “service” aspect of our user communities service providers. It was discovered in our research that the level of innovation that is attributable to the small and medium sectors of an industry were as substantial as the larger sectors. Although the larger sectors contributed large amounts in total spend it was no greater than the effect of what the other sectors contributed. Professor Giovanni Dosi was one of the key sources of research that we used to determine the framework necessary for an innovative oil & gas industry. Innovation within a science and engineering based business is therefore an inherent part of both these demands for profitable operations and consumer affordability. 

Professor Giovanni Dosi was one of our sources of primary research in the area of innovation. His paper “Sources, Procedures, and Microeconomic Effects of Innovation” September 1988, discusses and asks what are “the sources of innovations opportunities, what are the roles of markets in allocating resources to the exploration of these opportunities”?

People, Ideas & Objects research in oil and gas focused on these points: 

• The main characteristics of the innovation process. 
• The factors that are conducive to or hinder the development of new processes of production and new products.
• The processes that determine the selection of particular innovations and their effects on industrial structures.  (p. 1121). 

There are two major issues identified by Professor Dosi: 

• The first issue is the characterization in general of the innovative process.
• And second, the interpretation of the factors that account for observed differences in the modes of innovative search and in the rates of innovation between different sectors and firms, and over time. (p. 1121). 

Professor Dosi then makes the statements that, 

• The search, development and adoption of new processes and products  in market economies are the outcome of the interaction between: 
• Capabilities and stimuli generated with each firm and within the industry of which they compete. (p. 1121). 

The purpose of People, Ideas & Objects research in oil and gas was to focus on the organizational capability of the firm. It was also emphasized that innovations are based on both the firm and the industry. Coordination of the capabilities and stimuli of both the firm and the industry would therefore need to be advanced through changes in the organizational structure of both.

• Broader causes external to the individual industries, such as the state of science in different branches, the facilities for the communication of knowledge, the supply of technical capabilities, skills, engineers, and so on;  (p. 1121). 

Additional issues include 

• the conditions controlling occupational and geo - graphical mobility and or consumer promptness / resistance to change, market conditions, financial facilities and capabilities and the criteria used to allocate funds. Microeconomic trends in the effects on changes in relative prices of inputs and outputs, including public policy. (regulations, tax codes, patent and trademark laws and public procurement.) (p. 1121) 

As People, Ideas & Objects would suggest these define an organizational construct that innovation demands in order to either flounder or foster. As both an organizational construct in itself, and as we defined in the Joint Operating Committee as a framework of that construct. What we can impute from this definition of innovation is that it is a defined and replicable process that can be established through organizational design. And this design can be part of the organization's ERP software that identifies and supports that organization and its industry, such as the Preliminary Specification is configured to do. 

Our second source of primary research material came from Professor Richard N. Langlois. Throughout our review of his work we were able to determine the appropriate nature of the organizational design of the producer firm and the oil & gas industry itself. Selecting specific areas of the firm or market as to which the process and its management should fall under. Where the capabilities should reside. By fully implementing the Internet and using Professor Langlois research, which included Professor Carliss Baldwin determination of where exactly that transfer between firm and market should occur. We were able to design the appropriate software tools, such as our task and transfer system that will enable our user community to define which processes to undertake and manage in their service provider operations. Introducing enhanced efficiency in the manner in which the administration and accounting is conducted in oil & gas. 

And building on the other innovations that are rapidly providing value generation such as cloud computing. People, Ideas & Objects, our user community and service provider organizations are able to undertake this through the introduction of our Cloud Administration & Accounting for Oil & Gas. A service that turns the fixed producer overhead into a variable industry based overhead that can be provided to any producer no matter what their size or production profile. Enabling producers to shut-in unprofitable production, and therefore incur a null operation, and only produce profitable properties to maximize shareholder value. A substantial portion of our published value proposition of $25.7 to $45.7 trillion over the next 25 years is attributable to introducing this production discipline to eliminate the damage and destruction that has been caused by overproduction.

Speaking of value propositions that are priced in the trillions of dollars People, Ideas & Objects have started a definitive trend. ARK Investment CEO Cathie Wood suggests that innovation makes up $8 trillion of the current global public equity markets. She also suggests that this will grow exponentially to over $200 trillion in value in the next 8 - 10 years. Moving from a 10% valuation of the total equity markets today to what she believes to be 60% of the global equity markets. All as a result of the effect of technology, its capacity to disintermediate and the introduction of revolutionary business models that will “disrupt the traditional world order.” People, Ideas & Objects published our value proposition in 2012 and have held to those numbers. These same trends are now being seen throughout the greater economy and being quoted by established money managers on Wall Street. What I would suggest regarding the oil & gas industry is that the $8 trillion of Ms. Wood’s estimate doesn’t include any of the innovative values of the producers today. There is none, all the innovation is done in the service industry. And it is undetermined at this point if any of the $200 trillion estimate from innovation will be realized in North American oil & gas. 

Let's set the tone from the point of view of what will be the demands in terms of engineering and geological needs. People, Ideas & Objects have identified substantial capital cost structures that include the costs of:

• Recovery of the past property, plant and equipment account balances, or as we describe them, the unrecognized capital cost of prior production. Whereas if recognized today and these costs were passed to the consumer, would provide incremental cash flow to provide dividends in compensation for the past excessive reliance on investors.
• The refurbishment of the infrastructure as it stands today. 
• The rebuilding and expansion of the infrastructure and production deliverability to attain and maintain energy independence. 
• And finally the looming and escalating reclamation costs of the industries past. 

All of these costs have been and will be incurred by producers as a result of providing for the consumers energy needs. Without a means of passing these capital costs on to the consumers, such as the Preliminary Specification does, they will bankrupt the industry, or their investors under the officers and directors current business model of “building balance sheets” and “putting cash in the ground.” Methods which we believe will be recaptured in any developments done if the industry officers and directors choose to move to SAP or other alternative ERP systems. Taking on the expansion of the infrastructure and production deliverability will be the largest of these costs, and I would suggest the greatest opportunity for all concerned in a dynamic, innovative, accountable and profitable, primary oil & gas industry, and most specifically their associated secondary and tertiary industries. Having the business model and means to deal with these costs needs to be an urgent priority.

The Preliminary Specification has captured this understanding of innovation and incorporated it within the innovations framework of the Joint Operating Committee and Innovations Organizational Constructs. Each of the thirteen modules of the Preliminary Specification are materially affected when we identify the Joint Operating Committee as the key organization construct. That provided us with an opportunity to incorporate this understanding of innovation in the design and reorganization of the oil & gas producer firm and industry. These can be identified by several major processes of innovation within the Preliminary Specification. One of these ensures that innovation and its underlying processes are not repeated by separate and distinct areas of the organization, each year. Attempting the same failed “ideas” repeatedly is not innovation. Another major process of innovation is to enhance the scientific basis of the producer firms and industry as a whole. Moving forward on the basis that an idea that generates a dollar today will only produce ten cents tomorrow. We therefore must increase the volume of ideas generated and incorporated in our work processes to continue increasing our value. Various other processes of innovation have been incorporated throughout the Preliminary Specification based on the primary research conducted by Professors Giovanni Dosi and Richard N. Langlois. Enabling producers to earn the unquantifiable trillions of dollars of increased value that may occur in the decades to come.

People, Ideas & Objects Response to a Request for Proposal, Part V

 Intellectual Property

People, Ideas & Objects are establishing the need to rebuild the oil & gas industry and producer firms as a result of the damage and destruction that has been caused by officers and directors of the producers. Their “muddle along” strategy has instilled a “do nothing” culture that provides a status quo existence that has not and will never show any capacity to change. Even the event of 2015 and all subsequent years in which investors have refused to participate further in the industry has not prompted a response or action. Where does the motivation arise from this environment in order to efficiently and effectively conduct this rebuild? Oil & gas is one of the most advanced science and technologically based industries. One that demands innovation and iterative development of those sciences in order to ensure adequate reserves and production is provided by a dynamic, innovative, accountable and profitable oil & gas and service industry. And to ensure that it always meets the conflicting objective of ensuring consumers are provided with abundant, long term supplies of reliable and affordable oil & gas. 

The importance of Intellectual Property in the oil & gas industry is it will organize innovation. The most productive innovation is when it’s organized under a structure that provides for the market to focus on its development. The North American marketplace established IP centuries ago and we have reaped its benefits. The United States included copyright in its Constitution. Copyright has to be published in order to be earned. Exposing it to the marketplace of ideas where it can be built upon and enhanced by others. It reduces the “me-too” phenomenon that the oil & gas bureaucrats have created and benefited from in order to generate price competition in the service industry, elsewhere and to ensure everyone was rendered “blind sleepwalking agents of whomever would feed them.” Is this the method that an innovative industry is built upon? With bureaucrats sitting on top of the primary industry of oil & gas and using its revenues to endow their favors with the rewards of a penny or two here and there? 

The organizational structure of the new oil and gas industry People, Ideas & Objects et al will be building has Intellectual Property and innovation structured and based on the laws of the land. It will be these laws that define what innovation is undertaken and what is not. The violation of another's copyright or other IP is not allowable under the law so there would be no violators. A self policing mechanism reducing the overall costs of unnecessary duplication of innovation in the industry. Focusing the energy and resources on the development of profitable new products and services. Providing the incentive and motivation for those with the ideas to do the subsequent hard work of making those developments. Fully protected from the IP poaching that’s occurred so often and actively sponsored by the producers officers and directors and which is culturally ingrained in oil & gas today. Not just for today, but for always and everywhere. 

These copyrighted publications also enable an understanding of how things are done. Providing the means of which to build upon that understanding with additional innovations. Intellectual Property therefore provides us with a strong legal structure that encourages innovation, eliminates the costly redundancy of duplication of efforts, educates and provides the necessary legal protection to enable the motivation for the individual to do the difficult and challenging work we can all agree is the foundation of the industry. This applies across the greater oil and gas economic structure which includes all of the secondary and tertiary industries. The 21st century will be known for the leverage of Intellectual Property. Much as last century has leveraged mechanical effort. For officers and directors to be avoiding this or attempting to opt out is foolhardy in the extreme.

What is the motivation for people to develop their “ideas?” Are they not, just as the bureaucrats, in it for themselves and looking to siphon off what they can from the industry? Self interest is a part of every human endeavor. It comes down to whether or not it builds value. Self interested officers and directors have been well compensated while the industry has been destroyed. A contrast due to the fact they’ve not been motivated by the discovery of ways in which they can build value. Intellectual Property is therefore not only a structural organizational component that can enable the means to control the innovation process throughout the industry. The motivation behind the participants is purely from the point of view of building value through the establishment of incremental profitability, reduction of cost, enhanced production deliverability or the expansion of reserves. It is the law, and most importantly of all, proven. The reason the United States dominates in the manner that it does is due to the fact the Intellectual Property laws provide the motivational and organizational principles of how their economy and society operate. It assumes people are Intelligent beings, not serfs like the bureaucrats. It is productive, constructive, focused on generating value and is an overall benefit to society. Otherwise why would individuals do the hard work that’s necessary? By bureaucratic command? As a science and technology business, that is refuted to be second only to the space industry in terms of complexity. What has and what have these bureaucracies been doing under their business model?

Difficult work needs to be undertaken in a complex science and technology based industry in a 21st century business environment. Oil & gas is a critical necessity for the health and prosperity of our economy and way of life. One in which the environment and organizations we are presented with today can be assessed as wholly inadequate to meet those needs both today and the future. And what is potentially more difficult is they’ve shown no propensity to even recognize any of its issues or the need to make any changes. There is a need for significant development in all aspects of the greater oil & gas economy during this rebuilding period. A method of organization will be the first element necessary for a solution. However we have to address the issue of how that organization is formed and the subsequent pieces are put in place. The need to understand “how” those that are involved in this rebuilding will be motivated to do this hard work and where they can fit in is addressed in the Preliminary Specification. This is accomplished through the adoption of Intellectual Property as an organization construct that is defined and supported by the software and services People Ideas & Objects et al propose in this response to an RFP.

People, Ideas & Objects, our user community and their service provider organizations focus on providing all North American oil & gas producers with Cloud Administration & Accounting for Oil & Gas. Including the startup, small and junior oil & gas producers to ensure they’re provided with the full capacities and capabilities of the Preliminary Specification. This is due to the critical role and nature of their existence in terms of their dynamism and innovativeness. Currently we have a market in oil & gas where the officers and directors point to the startup to junior producers as causing the difficulties we’ve seen in the industry. In fact they may have become the officers and directors most recent, viable scapegoat! Our focus is appropriate, and we’re able to ensure these producers are able to enter the industry with far less barriers to entry by establishing all producers with the means to generate a second source of permanent revenues from day one. A ready market where the demand for earth science and engineering resources will be made available through the Preliminary Specifications Work Order, Resource Marketplace, Research & Capabilities and Knowledge & Learning modules. Providing them with the cash necessary to pay their mortgage, their Internet, to work from home and skip past the dog food aisle for their families nutrition. Introducing them and their experience, skills, knowledge, and ideas that form their capabilities to the broader oil & gas marketplace. We also eliminate that impossible wall of never ending overhead costs that consumed investors dollars year after year as the base of fixed overhead of the small to junior producer. Which is and has been the cause of their demise today. It didn’t matter how good their technical skills were, that’s not what determined their success or failure as a startup oil & gas producer, it was if they could get past that wall of base overhead costs. 

Officers and directors have known the Preliminary Specification establishes a strong foundation for which the Intellectual Property of individuals within the industry. This value becomes available to those original authors, innovators and entrepreneurs which is in turn marketed to the oil & gas producer firms whose distinct competitive advantages include the coordination of the markets earth science and engineering capabilities and their land & asset base. This is provided through the Preliminary Specifications Resource Marketplace, Research & Capabilities and Knowledge & Learning modules that were published in final form in August 2012. From the Resource Marketplace module I summarized the point as.

Another key point is the tearing down of the basis of Intellectual Property (IP). An industry such as oil & gas which is based on its earth science and engineering needs. After all, it is a business based on science. If we are to expand the capabilities in science and innovation in the industry. We are going to need to solve many very difficult problems. And as we progress, the volume of ideas needed will be an order of magnitude of what is required today. These problems cannot be solved in an environment where there is no upside for the individuals to solve them. Addressing the motivation to solve these problems and enabling the people to earn the rights to the Intellectual Property within the People, Ideas & Objects application modules is the first step in making the necessary industry wide changes. This therefore will turn the oil & gas industry into a far more dynamic business.

With the oil & gas industry fundamentally destroyed as it is, its IP is also in disarray. The capabilities and capacities that are derived from it are deteriorating as we speak. Making this an IP gold rush in the industry, to save it from the bureaucrats. However, check your employment contracts they may have clauses that state while working for them all of yours is all of theirs. Consolidated producers' difficulty is that none of this is published and the act of publishing is how the copyright is earned. Patents and trademarks are defensive, in that they protect what is known of your IP at a point in time. Copyright is offensive and allows expansion of one's Intellectual Property through the creation of derivative works. Copyright does not secure for you the rights to an idea. It only provides you with the monopoly rights to the expression of that idea. Implying it must be pursued and maintained much in the manner that I do here. 

The point of individuals earning the Intellectual Property rights is of particular interest in an industry that has its earth science and engineering capabilities, and land and asset base as its distinct competitive advantage. These seem diametrically opposed in terms of how they would function. What People, Ideas & Objects are suggesting is that there is no need and no benefit in having the producer firms own any of the Intellectual Property that supports “what, how and why” the industry operates. We need to address the motivation of how the industry progresses, how science and technology progresses innovatively and quickly. And address why this hasn’t been the case. 

This Intellectual Property section of our RFP Response is ripe with conflict and contradiction. We stated earlier that the science and technology of shale was the most advanced, yet belittle the development of it over the past years. The contradiction is that I’m only suggesting oil & gas producers are in a static state. The development and implementation of shale technology would have been introduced decades earlier if the producers were able to keep up with the progress that was being made in the service industry. It is there, in the service industry where all the innovation and development has occurred. There is no benefit in a producer owning any IP on a drill bit. And we are extending the deployment of IP more broadly to the sciences of geology and engineering. What have been the bottlenecks to the further development of the industry these past many decades. 

Business is changing quickly. Intels dominance in the market is now a constraint that is causing them to lag the market in consequential ways. As the dominant manufacturer of processors, theirs has been deemed a redundant business model. The business value is no longer in the manufacture of processors, it's in the design of them. Contract manufacturing is a commodity business where others are finding profits and opportunities in that area where Intel can not compete. In terms of design being the value, that is now the case and people should read the summary of Ampere Computing’s Leadership Team that now has one of the most powerful processors available. Oracle (a major shareholder) has declared they’re moving their cloud offering to Ampere processors, which Oracle’s Cloud is offering today. 

This is the new business world and there are new business models. It comes down to one word, the individual. To organize society today, with its global reach, can no longer be done in a spontaneous manner. There is no serendipity when individual A meets individual B 1,000 miles away on the Internet through software providing them the means to conduct their business. Software defines and supports this style of organization. Without People, Ideas & Objects none of this oil & gas vision will come about by sitting and waiting for the phone to ring. At least it hasn’t happened yet.

The question also needs to be asked: why is it that Apple continues to innovate consistently? Although their products are more costly, they earn in excess of 80% of the profits of the mobile phone industry, they bring incremental value to their customers through the innovativeness they provide. They too rely on Intellectual Property as the basis of their value. They in fact consider themselves a software company that sells hardware in order to bring about that customer value. Again, software defines and supports their organization. Who would run a company that sources their handful of products from a number of countries that total in excess of 3.5 billion in population? And then have the gall to snap their fingers and say “now innovate.” It doesn’t happen without software.

For producers to be doubling and tripling down on their failed vision is the method chosen to resolve the oil & gas industry and producer issues by the current officers and directors. Raising the viable scapegoat that it's the small producers who are overproducing in order to meet their bank payments causing the disaster in the industry today. When officers and directors raise this argument we see the source of their own future demise. For them to admit the overproduction issue is attributable to their own actions would never cross their minds. Everything is always someone else's fault. Should they be successful in implementing SAP or other means to secure their method of organization and management this will most certainly continue.

We’ve defined our alternative vision in the Preliminary Specification and would note that it’s in stark contrast to the clean energy vision that producers and SAP are attempting to transition to. Disintermediation is best defined as the removal of the bureaucracy and red tape that is rendered redundant through the use of the Internet. Although the world is unaware of “how” and “what” the producers current consolidation driven vision will operate as, or any details, we can only speculate as to why it’s being done when all other industries are, and not by choice, finding efficiency in the decentralized methods of organization and disintermediation through technology. People, Ideas & Objects have repeatedly stated the fact that each boe provides 10 to 25 thousand man hours of equivalent labor, or 28 to 71 times the entire global population. Officers and directors capitulation of shale resources for clean energy should be seen as irresponsible when we understand that it’s the world's most powerful economy that is the largest consumer of energy. Why aren’t the officers and directors seeking to make shale profitable? 

Due to the demands for earth science and engineering resources in the near future. We’ve discussed how specialization and the division of labor are being used in the Preliminary Specification to deal with these associated resource demand issues. Conceptually we have implemented the pooling concept where the ability to have the Joint Operating Committee assigned with the available technical resources of each of the producer firms would be how the property was managed from an earth science and engineering perspective. The pooling concept being the replacement of the operator role. Establishing the second source of revenue for the producer and its supporting administrative infrastructure in the Preliminary Specification. We have also implemented the necessary governance model to support these resources with the appropriate organizational structure to ensure effective operations across the producer and each of their Joint Operating Committees. 

Two other interesting aspects of Intellectual Property are first, what’s known as the safe harbor provisions. Why don't producers turn around and launch a lawsuit against these copyright holders? This would be an unfortunate world where “big” ruled the earth and we serfs would be the drones who were forced to cooperate with their every command. The safe harbor provision states that you can not launch a lawsuit against the copyright holder. Secondly, the division of tacit and explicit knowledge. Tacit knowledge can not possibly be captured or written down. Only explicit knowledge can. Therefore it is up to people to take the explicit knowledge they have and apply their tacit knowledge as a service to support their IP and generate their value. These are as important as the IP itself. Just as People, Ideas & Objects user communities service provider organizations deliver our software and their tacit knowledge to the producer firms.