The Preliminary Specification Part I

For the next few months I want to talk about the output that the community will produce for the Preliminary Specification. Although I have hesitated in the past in making any comment about what the output would consist of, it may be appropriate at this time to offer some suggestions just to get the ball rolling. I don’t wish to limit in any way what the scope of the output would look like, only to offer a few suggestions as to how I might see the output of the Preliminary Specification. These posts will be able to be aggregated under the PS-Output label of this blog.

In general the first requirement of the Preliminary Specification is that it will have no consideration of any technology. It is all about the oil and gas industry and the people that will be using the application. Consideration of the technology is not valid in this project, technology will accommodate the needs of the users when the time comes. This means that the General Ledger, the Relational Database Management System, Java etc are not pertinent to the considerations of what is required in the Preliminary Specification. (Please note however that we have selected this Oracle Stack as the base of Detailed Specification.)

Secondly we are looking at the global scope of the energy industry. Or as been stated elsewhere, the producers, services industries, society and individuals. That’s maybe a bit broad and could use a bit more detail. What is intended to be included in these classification is as follows.

Producers

• Start-ups
• Junior
• Independents
• Integrated Oil Companies
• National Oil Companies

Services Industries

• Field Services 
• Research
• Development
• Operations
• Engineering
• Project Management

Societal

• Royalty
• SEC
• Tax
• Compliance
• Environmental

Individual

• Employment
• Entrepreneurial

As we can see the functionality and process management of the application modules will include organizations and individuals outside of the producer firm. Transactions, interactions and collaborations occur outside of the producer and these are being captured by the People, Ideas & Objects application and therefore will be used within the various firms, agencies and industries noted above.

The output of the Preliminary Specification will therefore include the needs of these other organizations and people in addition to the producer firms. Their inclusion in this process is not limited to just managing transactions. A thorough review of the Research & Capabilities and Knowledge & Learning modules reflects the needs of the producer and service firms transaction management are not the only aspect that needs to be considered.

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

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

What's In a Name...

One of the fundamental underlying beliefs of People, Ideas & Objects is that for the oil and gas industry to increase its output requires that we re-organize. Adam Smith wrote in his book, The Wealth of Nations, that all economic growth was a result of the division of labor and specialization. Applying these principles have been the primary means for all economic growth since Smith wrote his book in 1776. That is to say that all economic growth has been the result of the reorganization of labor around enhanced divisions of labor and further specialization.

Professor Paul Romer of Stanford University and New York University is a proponent of what has come to be known as New Growth Theory. We have written about Romer on this blog many times before. In this Reason Magazine interview Romer talks about his People, Ideas and Things as the three underlying themes of new growth theory. I have taken these themes as the basis of our name People, Ideas & Objects and only transferred Objects for Things as we are Object based software developers.

(From Reason)

As one of the chief architects of "New Growth Theory," Paul Romer has had a massive and profound impact on modern economic thinking and policymaking. New Growth Theory shows that economic growth doesn't arise just from adding more labor to more capital, but from new and better ideas expressed as technological progress. Along the way, it transforms economics from a "dismal science" that describes a world of scarcity and diminishing returns into a discipline that reveals a path toward constant improvement and unlimited potential. Ideas, in Romer's formulation, really do have consequences. Big ones.

So what does all this mean. Simply new growth theory, and the reason it resonates here at People, Ideas & Objects is that these underlying concepts can multiply the output of industries.

(From Romer’s Paper Economic Growth)

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding: possibilities do not merely add up; they multiply.

People, Ideas & Objects provides the oil and gas industry with a means to have people, their ideas and things to be used in new and innovative ways. By having the software, and most importantly a software development capability available to accommodate the changes made from any new ideas, the industry can realize its full potential. This is what Professor Romer is talking about in New Growth Theory and what is enabled here by the software and particularly the software development capability proposed by People, Ideas & Objects.

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

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

So Much For SLA's...

Building on yesterday’s post of how the Preliminary Specification is what the software development team will be building to. In today’s post we discuss the use of Service Level Agreements (SLA’s) in the People, Ideas & Objects community. Simply SLA’s will not be used by People, Ideas & Objects in determining software definitions.

It would seem counter productive to have the community established to produce the Preliminary Specification. With the producers, users, service industry and others being a critical part of that community. And then have some producers not participating in that community because they feel they have their needs contractually agreed to through an SLA with People, Ideas & Objects. SLA’s have been the traditional manner in which firms have managed their technological needs and they will probably see no reason to change this culture. However, there will be no SLA’s here to manage the software definitions.

By contractually defining the relationship between the producer firm and PI&O within an SLA. The producer would seek to manage the specific details of the SLA and claim that we are in technical default when our main page did not load within the 0.125 seconds or other such nonsense. This is the state of vendor relationships when SLA’s get in the way.

As we stated yesterday. Our developers will be developing software that meets the needs of the producers as defined in the Preliminary Specification. If the producers do not wish to participate in the Preliminary Specification that is their choice and therefore their needs will not be specifically met. However, if they are interested in having software that meets their needs, and are willing to actively participate to define their specific, detailed needs then the community is the place for them to be. You’ll have to give up your SLA’s, but maybe those agreements have had better days.

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

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

Developing to the Preliminary Specification

Through out the course of software developments, People, Ideas & Objects (PI&O) developers will be developing software to the Preliminary Specification. That may be another obvious comment but it may not be too obvious from the point of view that I want to stress in this blog post. The possibly not-so-obvious nature of the comment is that the community is responsible for the accuracy of the application. If there is an error in the software, it will naturally translate to an error in the Preliminary Specification. Therefore the community must ensure that the Preliminary Specification, they approve, is correct.

So what does this mean? The old systems adage garbage in, garbage out. So how do we ensure the quality of the Preliminary Specification? Here are just a few of the many reasons that PI&O’s approach is different.

Users
There has never been a user focused development like PI&O. Where the responsibility and authority for quality fall exclusively within the domain of the user community. Where the user community is comprised of the producers, service providers, society and individuals as vested interests in their software.

Eyeballs
The product of the community, the Preliminary Specification, will be available on a read only wiki to everyone. Ensuring that anyone and everyone in the industry can have input through the community.

Unconstrained approach
People, Ideas & Objects approach to development is unconstrained by the demands of existing software code. And is unconstrained by the installed base of any software currently in use. It is a clean slate approach that is oil and gas industry focused, based on what is needed.

Draft Specification
Guided by an overall vision of what is possible. The Draft Specification provides an understanding of what is possible when we use the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer. Using this vision as the starting point of the community developments ensures that the Preliminary Specification will be all that it can be.

Proper Scope and Highly Engineered Solutions. 
Our budget accepts the realities of developing a solution with these aspirations. We have also provided an overall value-proposition to the producer firms that participate with PI&O. One in which producers receive highly engineered software solutions at very low costs. 

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

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

McKinsey on Big Data

In this paper McKinsey are writing about what they call “Big Data” which they define as “datasets whose size is beyond the ability of typical database software tools to capture, store and analyse.” Although their recommendations are limited to this definition I find that they apply to the growth in data in general. In particular McKinsey’s recommendations may be applicable to the data sets that are in use in business and particularly the growth of data that may occur in the very near future. Specifically in oil and gas it is anticipated that the demand for data will continue to grow. People, Ideas & Objects have anticipated this growth and based our architecture on a Technical Vision that can accommodate that growth.

McKinsey’s “Big Data” recommendations are listed here. The full report is available here. It is a comprehensive report, however I do recommend reading at least the Executive Summary.

1. Data have swept into every industry and business function and are now an important factor of production.
2. Big Data creates value in several ways.
1. creating transparency
2. enabling experimentation to discover needs, expose variability, and improve performance.
3. segmenting populations to customize actions.
4. replacing / supporting human decision making with automated algorithms.
5. innovating new business models, products and services.
3. Use of Big Data will become a key basis of competition and growth for individual firms.
4. Use of Big Data will underpin new waves of productivity growth and consumer surplus. 
5. While the use of Big Data will matter across sectors, some sectors are poised for greater gains. 
6. There will be a shortage of talent necessary for organizations to take advantages of Big Data. 
7. Several issues will have to be addressed to capture the full potential of Big Data.

To deal with the associated issues of data People, Ideas & Objects Draft Specification provides two modules. The Analytics and Statistics Module which is looking at the producer firms data and Performance Evaluation Module which looks at the Joint Operating Committee data.

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

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

McKinsey, Google's Eric Schmidt

Its the weekend and that means McKinsey. This Saturday’s post provides a video of Google’s Executive Chairman Eric Schmidt talking on business culture, technology and social issues. I find that Eric Schmidt’s video presentations are as informative and valuable as those of Apple’s Steve Jobs. As such when either make presentations on any topic they are in the must view category. This McKinsey video doesn’t disappoint, enjoy.

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

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

Revisiting our Wish List

As part of our Phase Two proposal we published our “wish list” of who we would ideally like to have subscribe to our developments. These firms and national oil companies provide the majority share of oil and gas production in the world. And as such, should we be successful in securing these producers we would have a large subscription base in which to draw our funding from. Again this would be the ideal situation for People, Ideas & Objects (PI&O).

One of the key deliverables of the Preliminary Specification is the geographic scope of the application. If we had the “wish list” as our subscribing base, then this geographic scope would replicate the geographic area of the subscribing producers. Its as simple and obvious as that, however something that maybe needs to be stated explicitly.

Once our subscribing producers have set the scope of the PI&O application during the Preliminary Specification; going back and adjusting the scope in the Detailed and Final Specification will be difficult, expensive and time consuming. In fact changing the scope of the application after the Preliminary Specification has been set is something that should not be done. Therefore the next opportunity for the community to adjust the scope of the application would be when the Final Specification is complete, and we begin the Preliminary Specification for the next iteration of development. In other words those that miss this opportunity to participate in defining the scope of the Preliminary Specification in the first iteration of development, may still participate in the community, however will have to wait to have their unique needs met in subsequent iterations of development.

Waiting has its costs, as has been stated here before, the additional costs of the late fees, and possibly the most costly aspect of missing out on the initial scope of the Preliminary Specification might be that of an outsider looking in. Some might argue that the scope of our wish list is too ambitious. An alternative scenario that I see forming is that the Preliminary Specifications scope is formed around the America’s. This being more controllable from the point of view of what is possible and probable. We have based our organization around the Houston area to deal with the determination of any scope of the application. Given time the wish list may become possible and probable, and maybe the reality of such an application won’t seem so impossible.

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

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

Phase Two Proposal

It seems odd to suggest that a start-up software company would have a multi-billion dollar capital project on hand as its first task. People, Ideas & Objects (PI&O) is such a start-up software company, however, we are also adopting many of the attributes of a project management organization. Undertaking a large project of this scale and scope is not something that is unusual for a project management office to undertake. Combining and focusing the resources of industry to build the software described in the Draft Specification therefore is not that unusual.

When we look at the task at hand from the project management perspective it doesn’t seem so out of place. Phase Two looks to build the Preliminary Specification and build the beginnings of the organizational infrastructure necessary to project manage the software development through the Detailed and Final Specifications. An organization with the people needed to carry the weight through the various phases of development and then through the subsequent iterations.

Most project management organizations are focused around an engineering task. Whether that is a building a gas plant, an offshore rig or some other asset that needs to be built to a certain specification. The project management organization is the ideal means to generate the one-off type of large scale development.

People, Ideas & Objects is engineering focused and fits this form as well. There is a few unique attributes that make this quite different from most project management organizations. The first is that there is a high level of maintenance of the software code. A large service organization will be needed to maintain the application on a day to day basis and this will be maintained by PI&O and through our proposed Hardware Policies & Procedures.

Secondly, most engineering focused projects are done for the ultimate ownership of the payor. PI&O is different as this project is initiated by myself, and therefore I have earned the Intellectual Property (IP) rights. That IP is needed to raise the fees from producers, organize the community and focus the financial resources on one solution.

Lastly ownership of PI&O has to remain third party to all of the producers. No other producer will be interested in using a solution that is owned and operated by Exxon, Shell or any other producer. This third party nature maintains an objective means in which to deal with the needs of all of the producers in a fair and equitable manner.

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

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

New Position, President

Thinking through the organizational structure of the People, Ideas & Objects management. I have come to the conclusion that with the work that we are undertaking here that it would be better to have some additional “bench strength” in the executive. That is why I am creating the position of President, a role that I was to previously fill, to help round out the team.

The position of president will be an officers position and will involve this individual providing their strengths in areas where the firm needs more resources. When we think about the type of work that we are undertaking, the probability that we are finding areas that need attention are many, and the manner of that attention is not minor in its importance. The ability to put an officer on the situation and get it up to speed quickly would be a great help to the organization.

So that is what we are going to do. The position of president of People, Ideas & Objects will be added to the list of individuals that we will be looking to add to the organization once we secure our budget. These positions are open to all that may wish to apply for them and are permanent full time, or available as secondment from our participating producers.

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

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

Summary of our Budget Discussions

So ends our quick discussion on some of the points of our budget. Large in size though our budget may be, I think we can all agree that the scope and scale of the People, Ideas & Objects (PI&O) application, along with the need for that application in the marketplace, are needed today. Anyone proposing to build an application that begins to solve the problems that the industry faces will need to address the budget requirements that are of this scale.

People, Ideas & Objects have proposed a reasonable Revenue Model to raise the financial resources to meet these budget requirements. It is a fair and equitable model that provides benefits to those that participate early. After all early participation is where the real benefits lay.

We have shown how the copyright has the ability to ensure success of this project by ensuring that there will be no knock-off software developments siphoning financial resources off of this development. That the copyright enables the industry to focus all of its resources on this one software development and ensure that it is a highly engineered and focused on delivering a successful application.

How unique attributes of geographic regions, like Canadian royalty and oil sands requirements, can still be handled through the Preliminary Specification. That large software development costs for unique areas does not necessarily preclude producers from participating in the PI&O software development activities.

People, Ideas & Objects have benefited from the maturation in Information Technology and will continue to do so. The revolution in development tools and methodologies have brought our cost estimates in line with what is possible, our delivery times into the realm of truly surprising and the quality of our deliverables into the surreal. We stand at a very important point in time.

Lastly the time is now for the community to form and begin the Preliminary Specification. Our time-lines, start and finish dates depend on securing our budget for the Preliminary Specification. We have budgeted $100 million for this task and expect that the community will have significant influence in the determination of their time-lines. More patience is what is needed, but the time for everyone to act is now.

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

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

Time-lines, Start and Finish Dates

Time-line's, start and finish dates are things that we can only dream about now, but are still something that should be discussed. None of these things can begin until the money has been secured. And as of today we have received no commitments from industry whatsoever. This software development project will not be funded on a pay as you go basis. Each of the next three phases of the development will need to have the commitments from industry secured before each phase of development begins.

It is at this time that I do not have the resources to even begin the campaigning to raise the money for the Preliminary Specification. So if there is a producer that wants to begin this process, please step up. Any support would be appreciated.

How long will the Preliminary Specification take. There is no time limit set at this time for the community to complete the Preliminary Specification. It is something that will need to take the input of the necessary parties to gather and codify the work of thousands of people. Removing duplications and ensuring complete coverage will require many eyeballs. And that is not something that can be completed based on a deadline that I can specify at this time. Nor will I be the one to specify the deadline.

One thing for certain is that the Preliminary Specification can’t be rushed. It will take the time for people to think what it is that they want and need in their applications. The Draft Specification provides an overall vision or beginning, but there is so much more that is possible when people get together.

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

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

McKinsey on Governing Joint Ventures

As I promised yesterday, this McKinsey article on governing joint ventures has to reside in any one's top ten list of favorites. The work that we are doing in People, Ideas & Objects (PI&O) is moving the compliance and governance frameworks of the hierarchy into alignment with the Joint Operating Committee’s legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. To do so provides us with greater speed and accountability from an organizational point of view. This has been difficult to tangibly quantify and qualify. That is until this McKinsey article.

Comparing the governance of both the standard corporate model and a generic joint venture. McKinsey provides a strong contrast of the opportunities and issues that we face in aligning the innovative oil and gas producers nine frameworks under the PI&O software. Noting in the paper that we not only attain greater speed and accountability but;

Despite the differences between wholly owned businesses and joint ventures, many of the basic tenets of good corporate governance can—and should—be applied to both. The principles discussed here might be seen as the minimum needed to promote accountability, speed, transparency, and, ultimately, performance.

The article recommends specific actions be taken to enhance the governance of joint ventures. These include;

• Appoint at least one outside director.
• Designate lead directors or a strong chairperson.
• Review and reward the performance of board members.
• Sponsor an external audit.
• Create a real challenge process. (Rigorous reporting and review process.)
• Let the ventures CEO run the business.

These are all excellent points of discussion on how the governance of the Joint Operating Committee could be handled in the Preliminary Specification. The community will need to take recommendations like these and determine what specific actions and processes need to be included in the specification. I could see the governance model being somewhat of a checklist of functionality and process management that the partners could agree upon. The PI&O software then providing that level of governance for the JOC. These are the decisions that the community has to make and why the producers are such a critical part of the discussion.

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

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

Comments From Shell's CEO Peter Voser

The Financial Times were reporting on Shell’s quarterly earnings which were robust to say the least. They noted a comment from Shell’s CEO Peter Voser that I found resonates with the work that we are doing here at People, Ideas and Objects.

The time of low-cost oil and gas is at an end and the world is entering a stage where finding resources will be more “complex” and require more money and investment, according to the head of Europe’s biggest oil company. 

Peter Voser, chief executive of Royal Dutch Shell, said the longer-term trend was for higher costs. “In the longer-term, you will clearly need higher oil and gas prices, or energy prices.”

I believe the transition from the low cost era to this new “complex” era is a fundamental change in the oil and gas business. One that requires we reorganize to focus our efforts on the difficult aspects of finding and producing oil and gas. This change demands that we look at the business and determine the best way in which to organize it for this new challenge. To suggest that the ways and means that provided profitable operations during the low cost era will serve us during the complex era is incorrect.

People, Ideas & Objects suggests we build the systems that identify and support the industry standard Joint Operating Committee. By doing so we are able to align the hierarchies compliance and governance frameworks with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. This alignment provides an enhanced speed, accountability and innovativeness that is necessary in this new “complex” oil and gas era.

Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

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

Budgets, Technology and Leverage

In businesses such as People, Ideas & Objects we have three main risk categories to deal with. We have financial, market and technical risks that must be addressed in order to succeed. This post is going to briefly address some of the technical risk that we face and how that risk impacts our budget needs. Embarking on a multi-billion dollar project without addressing these technical risks would be like bungee-jumping without the rope.

Firstly we should point out a decision that we made a few years ago that mitigates much of our technical risk. That is, the use of Oracle Fusion as the base ERP application at the core of People, Ideas & Objects (PI&O) applications. Our products will be built on Oracle's RDBMS, Java and Fusion Middleware which provide us with further ability to mitigate our technical risk by using best of breed in those product categories. The costs of these Oracle products are incremental to the software development budget we have been discussing in this and recent posts.

People, Ideas & Objects is based on a Technical Vision that uses existing technologies in ways that the oil and gas industry will need to implement them. One that sees technology being ubiquitous, always on, secure, asynchronous and dynamic. An environment where the oil and gas industry is supported by a software development capability in addition to the People, Ideas & Objects applications that will be provided. This environment has to be purpose built and that is what PI&O is setting out to do. The technical risks of bringing this environment to the producers that subscribe to this community are mitigated through the ability of controlling the various technical, financial and market risks through the Intellectual Property that holds these disparate parts together.

At the same time we are not pushing the technical envelope. All of the technologies and their proposed deployment are proven time and again capable of the job that we are asking of them. There is a maturation of the technologies in the past ten years that provides an assurance that they are up to the task. I also expect that in the next ten years they will continue to provide greater levels of confidence and assurance of their capabilities.

What can only be described as a revolution in development tools and methodologies has occurred in the past decade. These tools and methodologies have reduced the time and budget requirements of software development projects, while at the same time increased the quality of the deliverables. People, Ideas & Objects have adopted these tools and methodologies and will implement them to reduce the time required for developments, the budget for developments and increase the quality of our developments. Ten years ago when compilers had to be purchased for several thousands of dollars per developer; have now been replaced by free IDE’s that exponentially accelerate the developers productivity. Methodologies who’s user focus is a religion. And build on frameworks and middleware (like Oracle Fusion Middleware) that provide an architecture and building block of work already done. Developers today are far more productive which reduces our risk.

Our approach to developments also mitigates much of the technical risks associated with a project of this size and type. The Draft Specifications use of the Joint Operating Committee imputes a scope of operations that involves the entire producer firm. Little of the unique characteristics of the applications Marketplaces and MCCM exist in current legacy systems. Therefore we are limiting the involvement of legacy system requirements to data only. As such we are unconstrained by existing requirements of systems limitations based on prior technologies. Ours is more of an engineering approach of identifying and resolving problems.

Transitions, accounting integrations, training, and the variety of tasks related to software’s use are not part of People, Ideas & Objects business model. We are focused on software development. We defer the remaining businesses and opportunities to the Community of Independent Service Providers to fulfill the needs of the producers in these areas. This is the only reasonable means in which to approach the hands-on and large scale necessary to complete these activities.

It is these opportunities that I see mitigating the technical risks that we face in this software development project. Although our budget is large, it would have been impossible only a few short years ago. The technologies are sound and capable, ready to carry the load. We have only our imaginations holding us back in terms of how this industry could be managed more efficiently.

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

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

Budgets and Canadians

I’ve titled this post “Budget and Canadians” because it is the best example of this unique budget situation that I can highlight. The situation may occur in other jurisdictions, I an not aware of any other specific cases, and those cases will be a determination of the community through the development of the Preliminary Specification. This specific Canadian situation is something that I am intimately aware of and generally am able to predict the outcome of what will happen. Therefore I am writing about what I know and am reasonably sure what the community will decide in developing the Preliminary Specification.

There are two unique development requirements that are required for the Canadian marketplace. The first is a unique royalty regime and the second is the oil-sands developments. If we assume these two unique software developments cost in the area of ~ $100 million. And the Canadian marketplace produces approximately ~ 3.5 million barrels of oil per day. As a result of these facts, when the time comes for the community to decide the geographic scope of the People, Ideas & Objects application (a deliverable of the Preliminary Specification) Canada’s unique development needs will be an issue that needs to be resolved.

Looking at the issue critically from the communities point of view. $100 million in development costs divided by 3.5 million barrels per day is $28.57 / boe of a subsidy that Canadian producers would receive from the general development “pool” in order to meet these unique Canadian software development needs.

What I think needs to happen is the Canadian producers need to pay the basic fees that all producers are assessed in order to participate in the community. Then in order to ensure that the decision is made to include Canada as part of the geographical scope of the People, Ideas & Objects Preliminary Specification. Pay the additional $100 million in additional software development costs allocated over the base of subscribing Canadian producers. That is the Canadian producers, assuming you could achieve 100% subscription rates, would provide an additional $28.57 per barrel of oil equivalent in additional fees to offset these unique Canadian development costs.

Another alternative would be for Canadian producers to discuss with the Alberta and other governments to fund the costs of their unique royalty requirements. I have had discussions with the Alberta government on this point and I wish the industry luck in this endeavour.

It may be considered unreasonable for the community to undertake the unique development costs of any jurisdiction during the Preliminary Specification. As we can see these costs skew the total development costs materially, and as such will need to be addressed separately. I believe jurisdictions like Canada need to address this point prior to subscribing to the Preliminary Specification and have the commitments in hand to fund the unique development costs before they begin their participation. Otherwise they may be surprised at the decisions regarding the geographic scope of the application by the community.

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

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

Budgets, Fees and Penalties

Part of our fee structure may not be obvious to most producers on first glance. People, Ideas & Objects Draft Specification was completed in 2008 and the majority of the discussion around its use was conducted in 2009 and the first half of 2010. It was at that point in 2010 that we determined the developments off the Draft Specification were ready to commence. And therefore, started the “clock ticking” at that time, January 1, 2010.

One of the fundamental aspects of our revenue model is that we don’t become “blind sleep walking agents of whom ever will feed us”. Systems development can be easily controlled by closing off the budget during critical points in the development. With an application such as People, Ideas & Objects we need a Revenue Model that deals with this reality and provides us with a means to control the development by controlling the means of production, or budget. Review of the discussion of the Revenue Model will help to provide a better understanding of our point of view.

By starting the clock ticking on January 1, 2010 we have begun “controlling the means of production” by raising the budget for developments. Although the point in time when we have generated revenues has not yet happened. We have pending revenues from the industry when the time comes that the overall proposed solution becomes compelling enough for industry to act. Another aspect of this “controlling the means of production” is the 300% late penalties that we assess for any late payments past March 31, of the assessment year. Producers that take issue with the penalty scheme have two alternatives, to not participate in the community, or pay their fees in a timely manner.

Non-payment of the fees carries the additional penalties of non-use of the software and non-participation in the communities. If in 2015 a producer decides to begin using the software they will face the same fees and penalty structure from 2010 onward. However, the probable steeper penalty will be the inability to have had their organization represented in the community during development. This participation is not a one way participation where the producer tells the developers what their needs are. It is a creative and collaborative process that will involve many decisions and developments that will create solutions that might look foreign to an outsider looking in. I think these points eliminate the motivation for a producer to become a “Free Rider” on the People, Ideas & Objects software developments.

But there’s more. Those producers that are willing to participate early are able to earn what we call the “Participation Bonus”. This bonus is earned when other producers who may have been free riders subsequently decide to join, and pay the fees and penalties back to 2010, offsetting the current years budget, relieving the earlier subscribing producers some of their costs of development.

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

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