The Preliminary Specification Part CCCI (PLM Part XL)

I thought that we would spend the next few days discussing the management of royalties in the Preliminary Specification. It is here in the Petroleum Lease Marketplace along with the Accounting Voucher and Partnership Accounting modules that the royalties are calculated, paid and processed. One of the key determinants of the Preliminary Specification will be the geographical scope of the application. That will determine which jurisdictions the People, Ideas & Objects application modules will calculate, pay and process royalties. If you participate in a remote area and you want all of your areas covered by the application then participation in the community is the manner in which you need to make this happen. If you have production or leases in Alaska then you should assert that Alaska be part of the scope. Don’t assume someone else will do this for you.

When we talk about royalties we have a myriad different ways in which they are calculated and processed. Although over time many have adopted what could be called generally accepted royalty principles, there are still differences that need to be accounted for. On top of these differences are the systems that are used to calculate the royalties themselves. And let’s be honest Excel does a pretty good job. But that is not the way in which many of these royalty frameworks were designed to be handled. Excel is very labor intensive. From a Gas Cost Allowance (GCA) point of view, no one has implemented an ERP process anywhere within any of the systems in the industry. These royalties are the producers largest cost items. With high commodity prices significant value can be attained by ensuring that the correct royalties are calculated and paid.

It is within the Petroleum Lease Marketplace that the Lease document is stored and therefore the royalty information is captured and stored. The jurisdiction, whether that is Crown, Federal, Freehold, Private or State will have its methods and procedures to calculate royalties on its lands. In most cases these are comprehensive and impose significant levels of Information Technologies be used. Some use the prices that were realized and some use their own pricing models. There are a variety of different ways a unit of production can attract a royalty. Nothing however that can not be handled by a software development capability like that proposed by People, Ideas & Objects. Lets also look at how that compliance is achieved.

Using the division of labor and specialization we will have within each royalty jurisdiction a royalty accounting service provider, or several providers, who specializes in the management of royalties for, in this example, the state of Texas. The only thing these people know is Texas production and Texas state royalties. They operate on behalf of the hundreds of producers that produce oil and gas in the state of Texas and pay royalties. Using specialized software developed specifically for the service provider by People, Ideas & Objects they are able to calculate the royalties and ensure that the producers pay their minimum correct royalty. The service provider is also able to keep up with the changes in the Texas royalty administration and ensure that these changes are reflected in the software at the appropriate time on behalf of their clients. Consider that there would be royalty specialist service providers located in each jurisdiction for each royalty that falls within the scope of the Preliminary and subsequent Specifications of the People, Ideas & Objects application modules.

We have certainly reduced the footprint size of the oil and gas producers square footage requirements for office space. Through the process of specialization and the division of labor we have handed off everything from an administrative basis to these service providers to increase the quality of the service, and reduce the overall costs. This is the only proven method of increasing the economic performance of the industry. The alternative is that we continue to build individual silo’s of fully capable oil and gas producers. A scenario in which only the managers will be happy, and more of a myth than reality.

Tomorrow we will continue on with the discussion of royalties and how the modules of the Preliminary Specification deals with the largest costs of the innovative oil and gas producer.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCC (PLM Part XXXIX)

This is our third post in our scenario regarding the farmin on 32,000 acres of shale formation with a 20 well drilling commitment. Today we want to discuss the AFE process and how the Petroleum Lease Marketplace of the Preliminary Specification handles the elements of that document. We will also discuss the Oracle Fusion Middleware frameworks that would be used to implement the processes, functionality and features that are discussed.

As we indicated at the beginning of this scenario, capital is king. And you have the resources available to complete the 20 well program within the next drilling season which is consistent with your partners capabilities. It's time to get to work and that involves reviewing the “Dynamic Capabilities Interface” in the Knowledge & Learning module. Which also involves the “Planning & Deployment Interface” which has as part of that interface the AFE. The variables that are used to populate the AFE are derived from the agreement and include the working interest distribution, the participants, the location and the contacts for execution. Other variables such as the budget, also prepared within the “Planning & Deployment Interface,” and are derived from the Partnership Accounting module. Preparation of an AFE therefore is the least problematic in terms of creating the document. The ability to select from pull down menus and options that automatically populate the form are necessary to make the user interface as intuitive as possible. Items such as selecting the well id should automatically populate the partners and the working interest distribution variables.

Now that the form of the AFE is complete the need to have the internal routing of the document for approval is necessary. The various departments need to sign off on all expenditures internally before the AFE is sent for external approval. The document is sent through the process of routing that is managed by the Oracle Middleware Business Process Management framework. There it is sent to the CEO, CFO, COO, Land and Legal department for digital approval. Once all approvals are complete the document will be rerouted back for external distribution. In this case it is only necessary to gain the approval of the partner that we have brought on for their capabilities as they are paying 20% of the costs. However, we are also routing the document to the farmor as the AFE will be used by them to document the 20 well commitment we have under the earning provision of the agreement. As we indicated these producers were miraculously using the same People, Ideas & Objects systems that you are using! And as such, this routing is similar to the internal routing and approval process. However, upon approval, verification of the signed AFE’s are circulated to the partners to inform them that the AFE is now a valid cost center and will begin the process of, in this case, drilling the well.

Due to the fact that you and the partner that is bringing in the shale capabilities are both actively involved in drilling these 20 wells. Both of you will be incurring costs on behalf of the joint account. This is consistent with the pooling concept that the People, Ideas & Objects software was built around. That no one producer would fulfill the operator role and that all producers would be drawn into participate in some form or fashion in order to make up for any potential resource shortfalls. Therefore each of you will be participating and incurring costs in unequal proportions to your working interests. What the People, Ideas & Objects system will do each month is conduct an equalization on the participants interests and participation rates to make each other whole during the Joint Venture Billing process. This requires that both producers in this case, however it could involve as many producers as a Joint Operating Committee has, post their costs to the AFE for the month in which they have incurred these costs. Then during the month end process the equalization will be run based on their participation and the total costs incurred by both partners that month, and either compensate them or bill them for the difference to their actual working interest share. This is of course on an AFE by AFE basis.

Lets not forget that part of the pooling concept involves the billing of a producers engineering and geological resources to the joint account. The concept of overhead allowances is eliminated with the operator. The ability of a producer to maintain a technical resource base, when that resource is in such high demand, requires that that base have its own source of revenue. And that is the ability to charge these resources to the joint account for services rendered. Under the terms of the agreement with these partners it is by agreement that the shale capabilities are billed by that partner in such a manner. That however, does not preclude you from doing so as well.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects.

The Preliminary Specification Part CCXCIX (PLM Part XXXVIII)

We pick up with the discussion that we started yesterday regarding the scenario where you were with a firm that was farming in on a 32,000 acre parcel of land and a 20 well commitment to drill. Today we want to discuss the elements of the agreement that has been formed and how the People, Ideas & Objects Preliminary Specifications Petroleum Lease Marketplace module will use the Oracle Fusion Middleware layer to provide the services to the partners of this agreement.

What has been executed between the three parties to the agreement, the farmor, the farmee (you) and a partner with the capabilities in the shale formations is a traditional farmin agreement complete with accounting and operating procedures. All of the variables that are defined in the agreement and these procedures need to populate the various areas within the Petroleum Lease Marketplace module. A point of interest is that operating decisions require 60% approval for passage which leaves you with de facto control of the operations prior to the point of earning. Once earning has been achieved however, this will be a difficult threshold to cross as it will require almost full consensus amongst the partners on all operations.

The manner in which these operational decisions are made is through the collaborative elements of the “Planning & Deployment Interface” in the Knowledge & Learning module. When a decision is required from the Joint Operating Committee participants, using the Collaboration Framework of Oracle Fusion Middleware as the foundation we will be able to create the necessary collaborative environment to initiate, document, discuss and record the voting of these decisions.

One area that will be new will be the area where the capabilities of the partner who was brought on to provide the experience in the shale area has to be documented. These are listed in the “Capabilities & Commitments Interface” of the Petroleum Lease Marketplace. Before the agreement was signed you had the opportunity to review with their team and look at their Research & Capabilities “Dynamic Capabilities Interface” for the shale capabilities they had and were satisfied, that when those capabilities were available to you in the Knowledge & Learning module through the Joint Operating Committee; they would be more than adequate for the farmin. It was documented in the agreement that these were being made available and that the capabilities would be part of the consideration that is paid to the producer. Some of that consideration is paid in the form of a higher working interest through earning, and established day rates for their engineering and geological staff members. It will be incumbent on the producer who is providing the capabilities to note in their “Capabilities & Commitments Interface” that they are providing these resources to the farmin and what consideration they are earning in exchange for this. These will help both producers in balancing the costs and revenues of developing their capabilities and ensure that they are not over committing their resource base in the years to come.

The agreement itself is not a static document. It might have been that the “Marketplace Interface” was used extensively during the development of the agreement. Changes to the agreement could be done using that forum again. Expanding the scope of the lands or including some equipment to deal with the production from the lands. These are all elements of how the agreement could evolve during the life of the assets. The variables that are stored within the system would change, of course, and provide raw data to most of the modules that operate in the Preliminary Specification. As the agreements are the place of origin of most of the critical data that is used within the oil and gas industry. From working interest distribution scenarios, to methods of accounting, to land and procedural requirements this is where its at.

Tomorrow we will look at the way in which AFE’s are raised and approved in the Preliminary Specification.

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

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

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCXCVIII (PLM Part XXXVII)

It is within the Petroleum Lease Marketplace that we find some of the data elements and characteristics that form the unique culture of the oil and gas industry. Things like the AFE and the working interest distribution, and many others, are a result of the culture of the Joint Operating Committee and these are stored and originated within the Petroleum Lease Marketplace module of the Preliminary Specification. The unique nature of these attributes requires that they are not dealt with by generic accounting classifications for application modules. They require specific modules like the Petroleum Lease Marketplace to be built and for that we need to drop down from the Oracle Fusion Applications to the Oracle Fusion Middleware layer.

What we should do therefore is start with the beginning of the process, a sort of asset life cycle, in the next few posts, starting with the acquisition of a petroleum lease, the development of partners and forming of an agreement, to the raising of an AFE to drill a well or some other operation to show how the People, Ideas & Objects application is different from other ERP systems.

Capital is king, the 2008 financial crisis is still felt throughout the markets. Many producers are readily available to make a deal to farmout large blocks of land in their shale positions. You negotiate a 32,000 acre 20 well deal to participate in a promising area where the farmor has shot extensive seismic. Participation is at 100% and the farmor has input as to the drilling locations. You will earn an undivided 50% working interest upon completion of the drilling of the 20 well program. You have limited shale capabilities to take on a 20 well program and have promoted another producer to join you who has extensive capabilities in the region. They will participate at 20% to earn a 12.5% interest and provide these capabilities by agreement.

Looking at this scenario from the point of view of the producers who just happen to all be using the People, Ideas & Objects application modules! The leases that are part of the deal that are with the farmor can now be, as a result of the agreement, listed in the companies that are party to the agreement, the farmees. By way of the agreement they would have registered an encumbrance against the leases and lets assume for these purposes that happens coincidental with the agreement. Under the agreement, the costs associated with the lease rentals falls to the farmees. Therefore these leases are copied from one system to the other in a data download. The service provider that we talked about yesterday who provides the lease administration services on behalf of the farmee then uploads the lease data to the farmees system and begins the process of managing those leases as part of their administration. As soon as those leases require payment of lease rentals they will be paid, and the billing for the annual services provided by the lease administration service provider will be billed. A similar process will happen for the other farmee in terms of their lease data download however, there will be no lease rental payments made and no lease administration service fees. Those will be both billed, at 20% of the total, through the joint venture billing, from the other farmee, the you in this scenario.

Within the Oracle Fusion Middleware suite of tools there are a variety of frameworks that will be used to make this happen. To name just the obvious ones in this the fifth pass through the Preliminary Specification might be the most efficient. And then if there is a sixth pass focused on more detailed Oracle technologies we can go deeper into these technologies then. The frameworks that we would use as a minimum for what is discussed above would include, Business Intelligence, Business Process Management, Collaboration, Content Management, Cloud Application Foundation, Data Integration, Oracle Fusion Middleware for Applications, Service Oriented Architecture, SOA Governance, and Transaction Processing.

So one can see even when we step out from the Oracle Fusion Applications we are still able to inherit substantial capabilities in terms of infrastructure from Oracle Fusion Middleware. And that is the promise of Java, building on previous efforts. Oracle has expended great effort in developing Oracle Fusion Middleware. If fact all of Oracle Fusion Applications are derivative from it.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCXCVII (PLM Part XXXVI)

If we look at the innovative oil and gas producer from the scenario of using the People, Ideas & Objects Preliminary Specification. Within the Petroleum Lease Marketplace, yesterday we noted that the focus of the producer was on building their land and asset base and having accounting, land administration and other service providers taking care of the administrative and accounting aspects of their firm. This requires the access of the People, Ideas & Objects application to be specifically developed to meet the needs of these highly specialized service providers and for very limited access to the producers data. Today, we want to talk about the billing process and how the service provider is able to earn their service fees from the producers that are their customers.

Part of the specialization and division of labor process requires that the customer and service provider are able to come to terms on price for the service. Since the service provider is able to process larger volumes, lets use the example of lease rentals for today’s purposes, of lease rentals with a fixed number of resources they are able to pass these savings on to the customer. This in turn makes it economical for the producer to use the service provider as the cost is lower and the service is higher than they can achieve on their own.

One thing the service provider doesn’t want to be doing is to going through reams of data to prepare a thousand invoices each month. And the producer doesn’t want to reward the service provider if the lease rentals are not paid. So it is agreed that the billing for the service will be automated based on the successful payment of any and all lease rentals on behalf of the producer. When a lease rental payment is processed by the service provider the billing for that service will be sent through the People, Ideas & Objects systems, which both the producer and the service provider are using for these purposes, creating an account payable for the producer and an account receivable for the service provider.

In many oil and gas producers you might have needed a whole department to process the accounts payable service fees from the service provider for lease rental payments because of the volume of lease rentals. However, with highly automated systems, and the billing being dependent on just a successful lease rental payments being made, and verified that there are no duplicates, we can be assured that the costs to maintain such a system are minimal. The efficiencies are gained by the producers, the service provider and society itself as the people are involved in more productive use of their time, like building their land and asset base.

This is also a step further then what we discussed yesterday in terms of what the service provider was using the People, Ideas & Objects applications for. Yesterday we discussed that they were being used on behalf of the producer and today we are discussing that they are being used for their own purpose. Oracle Fusion Applications and particularly Oracle Financial Management suite are designed to be used in a cloud computing configuration. Whether the service provider would also have their own accounting system is not relevant to this discussion, what is pertinent is that the billing process for the producer remains as efficient as possible and that imputes that these processes have the Oracle Financial Management suite available to the service providers.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects.

The Preliminary Specification Part CCXCVI (PLM Part XXXV)

There are many things that require transaction support in the Petroleum Lease Marketplace of the Preliminary Specification. Transactions such as lease rentals, surface rentals and bonus payments all would fall within the modules domain. In this post I want to look at the Oracle Fusion Applications Financial Management module to determine what services are available to assist in the processing of these transactions.

We once again should look to the service providers in terms of the expanded division of labor and specialization that has been enabled through the Preliminary Specification. The focus of the innovative oil and gas producer and Joint Operating Committees are on their land and asset base, and their earth science and engineering capabilities. The Research & Capabilities and Knowledge & Learning modules focus on the development and deployment of capabilities and the Petroleum Lease Marketplace module is focused on the land and asset base of the producer. Therefore to focus on those assets would require that the administrative minutiae of land administration, production and exploration administration and the accounting associated with land and assets be outsourced to specialized service providers. Enabling the producer to focus exclusively on building and maintaining the competitive and strategic land and asset base of their firm. A task that is the key to building value for the producer, and a task that is unlimited in terms of the amount of energy they could expend in pursuit of that base.

Here we have a scenario where the producer has selected the People, Ideas & Objects application modules as their ERP system. Which includes the Oracle Financials and imputes that high levels of specialization and division of labor are incorporated. Meaning that these accounting applications are primarily used by individuals who reside outside the producer firm. There will be members of the producer firm who use them as well, however, the majority will reside within the service provider firms. Thankfully we are using a cloud computing model of delivery of the systems to enable the use of these systems to be used by these other organizations. Now let's assume for a moment that there are service providers for lease payments who guarantee your surface and lease rentals will be paid on time, lawyers for maintenance of agreements and one for Crown / Federal lands, to name just a few. Each of these service providers are representing many producers with a large market share of the industry. Each have highly organized and efficient processes that require specialized software systems to meet their specific needs. People, Ideas & Objects, on behalf of the producers represented in our subscription model would need to provide access to the producers data and the development of these highly automated systems.

What processes would be adequate for one producer would be fairly simple and straightforward. In terms of a highly organized process, the ability of one producer firm to have the volume of activity to justify the systems to build the highly automated systems wouldn’t exist. In a scenario where the industry is being represented by highly specialized service providers the need for highly automated systems however is necessary. And these systems have to be an integral part of the producers system in terms of their Security & Access Control. For instance the lease rental service provider would be able to access only the tables relating to the lease rental data. Without this level of access the ability of the service provider to do their job would not exist.

In terms of the Oracle Fusion Applications we will need to adopt the full suite of Financial Management modules. These include the General Ledger, Accounts Payable, Accounts Receivable, Asset Management, Payments & Collections and Cash & Expense Management. We had already adopted these in the Resource Marketplace module and therefore only have to access the specific services within those modules that we need. Such is the advantages of modularity.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects.

The Preliminary Specification Part CCXCV (PLM Part XXXIV)

Before we forget we need to pick up an important piece of technology that will work with all of the technologies in the Preliminary Specification. It's important to mention it here in the Petroleum Lease Marketplace as so many of the unique oil and gas attributes are stored within this module. The technology of course is the data model. And the data model that we are including in the Preliminary Specification is the industry standard PPDM (Professional Petroleum Data Management Association). This will provide a solid foundation for the innovative producer to base their ERP, engineering and geotechnical applications upon.

The PPDM Association defines and creates standards to help oil and gas companies manage exploration and production data. Included within the scope of their data model is the following data; general well header information, digital well log data, seismic location information, seismic data, land parcel information, reservoir field / pool information, faults and formations, geographical information, and surface grids. Although many of these data elements may seem outside of the ERP scope only seismic location information, seismic data, and faults and formations are outside. Particularly the land information, since we are in the Petroleum Lease Marketplace module, will be of significant value within an industry wide collaborative application.

The data model is currently quite large in the last upgrade PPDM suggest that just the upgrade is an addition of 500 tables. I am not a member of the association and am therefore not able to download the model and can’t tell what level of normalization the data model conforms to. Looking in the wiki however I see a number of tables with similar first names that have different second names. It would appear to me that the first name should be the table and the second name should be an attribute within that table. Therefore instead of 10 or 15 tables they would only need one table. However data models being data models it is difficult to understand them without a comprehensive look into them.

Many of the innovative oil and gas producers will already be using applications that access the PPDM data model. These would be for earth science and engineering applications primarily, and as a result we are building on the producers current infrastructure of technologies. In addition we are adding to the scope of applications that the technical staff are able to access and use their data for. Having well header information for engineering information that also references the accounting information provides real value for the engineer. I would suggest it is also something that is necessary as we get into some of the more complex accounting that we do in the Material Balance Report of the Accounting Voucher.

Data models are sophisticated architectures that reside within the Oracle database and provide a structure for the data to be stored and retrieved. The database ensures that the rules and requirements of the data are enforced so that elements of the database remain in balance and harmony. Database technology provides this value through the Oracle database and the data models that are developed. We will use the PPDM data model. Oracle will have developed their own data models for their Oracle Fusion Middleware Applications. And we will be developing our own data models for the data that is unique to the needs of the People, Ideas & Objects application modules. All of these data models will be employed by the same RDBMS (Relational Database Management System) that being the Oracle database. The size of these databases will be enormous.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCXCIV (PLM Part XXXIII)

We begin now with a look at the Oracle Fusion Application modules from the perspective of the Petroleum Lease Marketplace module of the Preliminary Specification. As I have mentioned before there will be a certain level of duplication in discussing these technologies and that is to be expected. The first technology I want to discuss will reside in the Oracle Fusion Middleware layer and be part of the user vision. It is in fact the “Marketplace Interface” that is made available through the open source Open Wonderland organization. Recall that there is only one “Marketplace Interface” that serves the three marketplace modules of Resource, Petroleum Lease and Financial Marketplace modules.

The origins of the Open Wonderland organization are of interest and pertinent to the discussion. Originally a Sun Microsystem research initiative the Project Wonderland development was open sourced and made available to the larger community. When Oracle purchased Sun Microsystems it deemed that the technology was of no commercial value to it or its customers and set the community to find a new home. Needless to say Open Wonderland has struggled since, without a major sponsor the technology has not advanced and the marketing of the technology is limited and difficult. There seems to be an inability of the community to relate the marketplace metaphor for the technology. That is what I think they need to make theirs the killer app in the commercial market space.

Open Wonderland is written in Java and therefore consistent with the Oracle Fusion Middleware server. Having this operate as a module in itself would not technically be an issue. The business risk of using the technology of a weak organization is mitigated by the fact that they have open sourced the code for the applications. If something should happen to Open Wonderland as an organization there is still an avenue to pursue with the code itself. It would be incumbent upon People, Ideas & Objects, when our revenue streams begin, to support initiatives such as Open Wonderland since we are in direct benefit of their technologies and their organization.

The “Marketplace Interface” is a place where anyone in the oil & gas or service industry is able to establish a market presence or create an avatar to collaborate with others within the industry. People, Ideas & Objects will enable these avatar’s to conduct business through the ERP service of the People, Ideas & Objects application modules and the Oracle Fusion Application modules. Interactions such as buying and selling oil and gas assets, purchasing field services, creating an AFE, making decisions within a Joint Operating Committee. Doing many of the things that can be done physically, only virtually through the use of the avatars that have been created and enabled in the “Marketplace Interface”.

Here’s why I think the “Marketplace Interface” is so critical to the innovative oil and gas producer. Phone calls can’t do it. That is to say they are usually, or preferably, with only two people. They can’t be documented and any business that arises from them has to be entered in other systems. They do have the benefit of spontaneity and are available virtually anywhere. Meetings are difficult to schedule all the participants within a reasonable time frame, no spontaneity. No virtualization. However they are easily documented and business that arises from them need to be input into other systems. Meetings can be with any number of people, however the law of diminishing returns comes into play. There has to be a compromise in terms of these two mediums of collaborations. Keep the phone calls and the meetings and add the virtual collaborations from the “Marketplace Interface”.

The “Marketplace Interface” will provide the spontaneity of the phone call and the ability of people from far distances to meet up in no time. Documentation of the business can be comprehensive and include video of the simulation and copies of the documents. Any business that is generated during the meetings can be dealt with through the “Marketplace Interface” by selecting the appropriate ERP related option-command sub-menu. Productivity would be the result. Attendance at these virtual meetings could increase and the travelling time would be substantially reduced. The follow-on business associated with meetings would be initiated during the meeting and things would get done. Not so much a fancy technology but a real productivity enhancing business tool.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCXCIII (PLM Part XXXIII)

We turn now to the Petroleum Lease Marketplace (PLM) in this our fifth pass through the Preliminary Specification. It has been a long time since we discussed anything regarding the PLM and therefore it is appropriate that we review what we have in the module to date. It is our second marketplace module and it is here that we resurrected the “Marketplace Interface” that includes the somewhat controversial user vision. It was in the previous pass that I described a scenario that a user would come across with the “Marketplace Interface” and for purposes of refreshing our memories...

Lastly a scenario, users need a window in which to view the marketplace. In the Petroleum Lease Marketplace is the “Marketplace Interface” which captures elements of the user vision. Consider a user was viewing a Google Earth representation of the Unit that they are a member of the Joint Operating Committee. While viewing, contextual tiles of agreements, leases and other data are populated with the properties information. If the user wants to click on those and query the information it is there as well as historical accounting data. If users from another firm are also viewing the property, they can be seen and engaged in a collaboration, and immediately contextual tiles of information about the person are available to you, and any previous correspondence and outstanding matters appear on your screen. Meanwhile you click on the newly drilled well that you heard was performing beyond expectations to get an update of its actual production. You also notice that the adjoining lands have just been posted for bid by a producer firm who is not a member of your Joint Operating Committee. You are able to call on the other producers in the Unit within the Petroleum Lease Marketplace within ten minutes of that discovery, and set in motion a plan to deal with newly posted lands. This meeting is recorded and the video can be shared by other members of the Joint Operating Committee.

The Marketplace Interface is one of many interfaces that were developed in the Petroleum Lease Marketplace module. The others, with a brief description are as follows.

Capabilities & Commitments Interface

An interface that details the capabilities, that are by agreement with partnership companies, either acquired or committed to.

Long Term Capital Program Interface

Aggregates the information contained within the firms reserve and long term budgeting reports. Scrubs the data of any proprietary information. Details the information for geographic region and account detail. Publishes it in aggregate with other producers data to the service industry for their use in determining long range plans.

Marginal Production Threshold Interface

A collaborative interface where the partnership represented in the Joint Operating Committee determines the thresholds at which marginal production will be shut-in. Based on commodity price or volume, the Marginal Production Threshold Interface will have input into the production operations to cease production at certain thresholds when obtained.

Revenue Per Employee Interface

Public detailed calculations on Revenue Per Employee for each member of the oil and gas producer community. Private detailed calculations of Revenue Per Employee for each Joint Operating Committee you participate in. Details include trajectories for each variable. Variables include price, volume and number of employees.

Strategy Interface

A summary of the strategy for each Joint Operating Committee that you participate in. As each JOC has its own strategy this central location provides all of the pertinent information for the user to interact, collaborate and affect change within the Joint Operating Committees strategy.


Its in the calculations of Revenue Per Employee that can discern which producers are innovating and which are moving backwards. In a previous post I summarized what I thought the value might be in the following...

So what have we got. We have run some elaborate calculations that “might” prove that one producer is innovative. What does that prove. That depends on what is imputed by being innovative. Professor Dosi states “In very general terms, technological innovation involves or is the solution to problems.” Dosi goes on to further define this as “In other words, an innovative solution to a certain problem involves “discovery” (of the problem) and “creation” since no general algorithm can be derived from the information about the problems. Solutions to technological problems involve the use of information derived from experience and formal knowledge. It is the specific and un-codified capabilities, or tacit-ness” as Professor Dosi describes “on the part of the inventors who discover the creative solution.”

We also applied the division of labor and specialization to the work that was done in Land and Land Administration, as well as a few of the other departments that worked through the Petroleum Lease Marketplace. Having the service providers focus on specific processes on behalf of the industry would be the most efficient way in which to organize this work. Making the producers focus within the Petroleum Lease Marketplace around their core competitive advantages of their land and asset base.

The choice of production allocation methodology is an option in the Petroleum Lease Marketplace module. The choices are based on the chemical realities of the situation which is consistent with how many of the smaller gas plants are operated. Or alternatively they can be based on the Construction, Ownership & Operation (CO&O) agreements which are as a result of the agreements that are made between the ownership groups. The latter being a more sophisticated way than any other ERP system provides product allocations.

Lastly the Petroleum Lease Marketplace participates actively in ensuring the producer and Joint Operating Committee move from the “High Production Model” to the “Decentralized Production Model”. Where the costs of production and overhead match the revenues. So that when the wells are shut in through the “Marginal Production Threshold Interface” the costs associated with production and revenue accounting, to name just a few, are not incurred.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects.

The Preliminary Specification Part CCXCII (RM Part XLV)

In previous passes through the Preliminary Specification we have discussed the Purchase Order system that is part of the various modules. In the Resource Marketplace module, access to the service industry is one of the key attributes of the module and therefore the Purchase Order system will be an inherent part of that module. Thankfully Oracle have a suite of modules called Procurement in the Oracle Fusion Applications. Within that suite includes the following modules Purchasing, Self-Service Procurement, Sourcing, Procurement Contracts, Supplier Portal and Spend & Performance Analysis. All of these modules within the Procurement suite will be adopted within the Preliminary Specification as they bring substantial value to the innovative oil and gas producer.

There is also a suite of Supply Chain Management modules that I have not placed within the Preliminary Specification. Oil and gas doesn’t need supply chain management tools it needs good old fashioned purchasing tools. Supply chain tools are for retail stores like WalMart and manufacturers like Ford, not oil and gas operations like upstream innovative oil and gas producers. There may be some demand for supply chain tools if the producers of the oil sands plants decide to join the People, Ideas & Objects Preliminary Specification, and there is no reason that they couldn’t. They would however need to indicate so before the scope of the Preliminary Specification was set, so that it included heavy oil operations.

There will be a variety of People, Ideas & Objects modules that access Oracle Fusion Application Procurement modules during their operation. Within the Preliminary Specification we have employed modularity theory in both the technology and the organizational design. From a technological point of view modularity provides us with the ability to access the services of a module without having to delve too deeply into the code of the module we want to access. In a paper entitled “Oracle Fusion Applications: The New Standard for Business” Oracle describes the benefits of modularity in the following fashion.

The maximum benefits of SOA can only be gained by placing services at the heart of an application that takes a modular approach to module and process design. That way, processes can be reconfigured to meet the evolving requirements of the business at a detailed level. Any extensions can be developed as additional services, without touching the source code of the core application.  

So when the Resource Marketplace module wants the “Marketplace Interface” to generate a Purchase Order with a new supplier then the service is populated within the interface from the Purchasing module in the Oracle Fusion Application Procurement Suite. These are some of the benefits that we gain from modularity in terms of the technologies. What the primary benefit of modularity is in organizations is the further division of labor and specialization.

Purchasing activities may be limited to those producers that are undertaking large and complex projects. However, I think that any and all producers can benefit from having these services available to them. Even though a project may not be big in terms of some of the other projects that are undertaken in the industry, they are material to the producer firm or Joint Operating Committee conducting them. And as such would benefit by having a Purchase Order system and related facilities provided to help manage the contract, transaction and relationship with the service industry provider.

Tomorrow we will begin our fifth pass through the Petroleum Lease Marketplace module.

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

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

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects.

The Preliminary Specification Part CCXCI (RM Part XLIV)

In all of the modules of the Preliminary Specification we have defined high levels of collaboration. Whether it is here in the Resource Marketplace modules Actionable Information Interface,
Supplier Collaborative Interface or the Gap Filing Interface. Collaboration within the producer, Joint Operating Committee, oil and gas industry and service industry is robust. Now some of those collaborations, like those in the Supplier Collaborative Interface are for public consumption. And others are for a limited viewing audience. How can users be assured that their collaborations are held in the confidence they are intended to be. And what form will these collaborations take, and what systems are used in order to conduct these interactions. These are all valid questions that will be answered by this post.

Today’s collaborations take on much more than just textual interactions. There is video, chat, social media and images. Within the Preliminary Specification I would like to see the ability to capture a video meeting of the Joint Operating Committee and record the participants and their votes for further reference. This way members could be situated where ever they may be at the time of the meeting and still participate through their computer or an iPad. Being presented with a menu of items in which the voting on different decisions that are being made. Their votes being logged and the outcome of the votes setting in motion the activity that was decided upon.

Oracle through their Fusion Applications provides these level of collaborative services as part of the ERP software offerings. It will not be necessary for the members of the Joint Operating Committee to go outside of the People, Ideas & Objects application modules to gain this level of collaboration. It will be available as a result of the application itself. The following quotations come from a white paper entitled “Oracle Fusion Application Overview”

Web 2.0 Collaboration

Today’s workforce relies on on-line collaboration to get their work done. Whether they use chat, discussion forums or web conferencing to communicate and come to decisions, Web 2.0 collaboration technologies have previously been disconnected from enterprise applications. Integrating Web 2.0 Collaboration directly within the application has several benefits:

• Productivity: Instead of searching for the relevant employee in a separate on-line directory, initiating a session through a separate Web 2.0 application, a Web 2.0-aware enterprise application can provide a direct link to the other participants in the decision, and single-click access to on-line communications with them.
• Context: A Web 2.0-aware application can integrate the business context with the discussion, and capture the decision details for future reference.
• Security: The channels that the application offers directly are sanctioned and secure, in contrast to the third-party programs that employees commonly use for non-professional communications.

It is within this area of collaborations that innovations will begin. In our review of Professor Giovanni Dosi we learned that technical trajectories were influenced by commodities that were abundant and affordable. It is People, Ideas & Objects assertion that the two commodities that affect the technical trajectories in oil and gas are knowledge and collaborations. Having an ERP system that provides this level of collaboration will enhance the innovativeness of the oil and gas producer.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCXC (RM Part XLIII)

One module that the oil and gas producer and the Joint Operating Committee won’t have much use for is the Oracle Fusion Customer Relationship Management Suite or CRM. That doesn’t mean that we won’t host the applications as the benefits of doing so would be the better service the service industry could provide the producers and JOC’s by having access to those application modules. Customers are a bit of a foreign concept in oil and gas, not so in the service industry, and the ability to have access to the Oracle Fusion Customer Relationship Management Suite would provide real value for both the service and the oil and gas industry.

Included in the suite are the following modules. Customer Master, Sales, Marketing, Incentive Compensation, Mobile & Outlook Integration and Territory and Quota Management. These applications help to manage the customer, that being the oil and gas producer and Joint Operating Committee, with their needs for the service industries products and services. Applications such as Oracle Fusion Product Catalog allow service industry marketing personnel to start the process of selling and promoting their products on the web. From there they are able to capture the sales leads and track down sales calls to make the sale with the information that is captured by their team within the Oracle Fusion CRM Suite.

Providing these products in the Preliminary Specification is a must have and therefore I have included them in the Resource Marketplace module. The service industry needs are a critical component of the success of the innovative oil and gas producers. Although we are not as confident in terms of understanding their business. And their businesses are far more diverse in terms of the industry definitions that define them. We need to provide the best software services that we can to the services industry. This if from a reasonableness and competitiveness point of view, but also to mitigate the conflict that has arisen between the producers and service industry representative in terms of costs and performance.

Customer Relationship Management applications have become one of the killer apps of the last decade in terms of their impact on business. Bringing a level of intelligence to the marketing of products and services to the firms that are able to exploit the technologies.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCLXXXIX (RM Part XLII)

Within the Resource Marketplace module of the Preliminary Specification there is a need to provide the service industry participants with software solutions that interact with the producers and Joint Operating Committees. In the area of Human Capital Management, a part of the Resource Marketplace module which the Military Command & Control Metaphor will fall under. Where members of the service industry firms participate in field operations conducted by the Joint Operating Committees. They need to have the ability to participate and fall-in within the chain of command that is established within the temporary organization that is established for the operation being conducted. Therefore the need to access some of the modules of the Oracle Fusion HCM Suite, as well as others, will be part of the Preliminary Specifications offering as well.

And there will be other aspects of the service industry representatives business that will need to be included in the Preliminary Specification. Looking at Oracle’s Fusion Financials and Oracle Accounting Hub there are services that are provided for just this purpose. Recall that we have some unique aspects of the Resource Marketplace module that involve the service industry. And one of those is the ability to design transactions. Therefore the need to have these software services operational in the cloud and accessible by the service industry representatives is critical.

It is not to suggest that we are providing the full accounting services that we are providing to the producer firm and Joint Operating Committees. We are not that familiar with the service industry to provide that level of service. However, Oracle Fusion Accounting Hub provides the means in which they can interface their accounting systems with the People, Ideas & Objects systems. That way they can utilize the services we provide and fully integrate their systems to service and support the innovative oil and gas producer and Joint Operating Committee in its needs.

Modules of the Oracle Fusion Financials include General Ledger, Accounts Payable, Accounts Receivable, Payments & Collections, Cash & Expense Management and Asset Management. These are your generic financial applications and will of course be included in the Preliminary Specification. Where they reside within the specification is not material to the discussion as they will be separate modules much like the eleven modules in the Draft Specification. By using modular theory we gain the full use of these Oracle Fusion applications without the complexity of integrating them within any specific module itself.

The days in which we could generate excitement over charts of accounts and journal entries is probably behind us. The ability to deal with the unique needs of the Preliminary Specification is something that I am confident that Oracle Fusion Financials can handle. Based on the Oracle Database, which is by far the leading technical database and market leader. And the result of what Oracle claim to have now invested in Fusion technologies since 2005 of over $20 billion. And based on Java, the leading programming language, and as of this date no other major ERP vendors system is based upon. In terms of technological architecture this will provide a foundation for the innovative oil and gas producer through the next several generations or iterations of the inevitable IT churn.

The user base for People, Ideas & Objects needs to be as broad as is possible. What is clear in this post is the role that the service industry providers have in making this application so much more valuable through their interaction. So whether it is a producer, service industry representative or participant in a Joint Operating Committee, a geologist, engineer or accountant, everyone and everybody needs to be included in making the People, Ideas & Objects Preliminary Specification theirs.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for People, Ideas & Objects products remains at the sole discretion of People, Ideas & Objects. 

The Preliminary Specification Part CCLXXXVIII (RM Part XLI)

We continue with our discussion of the Oracle paper “HR in the Cloud: Bringing Clarity to SaaS Myths and Manifestos”. Today we touch on some of the bigger issues of the “cloud” and although we are dealing briefly with them here, we will be discussing them more at length as we make our way through this the fifth pass through the Preliminary Specification. Needless to say they’re large technical issues and there will be those that won’t be satisfied with the solutions no matter what the outcome of the Preliminary Specification. It is important to note that many of these features are available only as a result of providing People, Ideas & Objects as a “single-tenant” solution. This is the superior methodology and is the manner in which we are able to provide much of the customization of the Oracle technologies.

Integration of software is where many of the problems show up. We need to maintain a focus on the user to ensure that we are meeting their needs. And to continue to develop the Community of Independent Service Providers that are there to service and support the People, Ideas & Objects software for the producers. Oracle suggests that developing on open standards like Java and Oracle Fusion Middleware allows for further upgrade of the technology even if there are customizations. This little bit of magic will be discussed further as we proceed through the Preliminary Specification. It is however as a result of everything that is contained within the Oracle Fusion Applications are derived from the Oracle Fusion Middleware layer.

Customizations of applications are a fact of life. Not everyone can fit within the standard configuration of what an application should be. The reliance on users helps to keep the focus of where the needs are, and customizations through a dedicated software development capability like that proposed by People, Ideas & Objects are necessary. In addition each producer is unique. The need to have each producer run their own version of the Oracle stack of technologies and the People, Ideas & Objects software in their own virtualized instance on the cloud computer is necessary. This is what is called “single-tenant”. Then each producer is running their own version of the software and their domain is somewhat under their control.

Through the use of Oracle Fusion Middleware these customizations, if done appropriately, will survive the upgrade process. Therefore the ability to have the regular software upgrades of the underlying Oracle technologies will not disrupt the People, Ideas & Objects modules or customizations. Speaking of upgrades the need to manage the upgrade process for cloud computing applications takes on a new priority. Making sure that the appropriate change management procedures and policies are in place, the appropriate testing, that training of the user base and a host of other related issues need to be considered before the technologies are upgraded. It will be easier to upgrade the technologies once, however it must be done with much forethought and consideration of the producers and users needs and understanding of the use of the application modules.

When it comes to performance and reliability the cloud computing architecture is a simple matter of applying the proven rules of specialization and the division of labor. It is far more efficient and effective to have the technologies for hundreds of producers handled by the specialized skills of Database Administrators, Network Specialists and the like then having each of those producers provide support for their technical architecture with one general support person.

One of the key outputs of the Preliminary Specification is the initial geographical scope of the People, Ideas & Objects application modules. This will involve which jurisdictions it will calculate royalties for, which jurisdictions it will meet for securities purposes, and what currencies it will recognize etc. In essence determining the minimum level of functionality to meet the users requirements in the first commercial iteration of the application. Oracle Fusion Applications are global in their scope. Providing the producer with a strong base of functionality in which to determine what is the initial scope of the Preliminary Specification.

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

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

The Preliminary Specification Part CCLXXXVII (RM Part XL)

Oracle has published a paper entitled “HR in the Cloud: Bringing Clarity to SaaS Myths and Manifestos” that I want to review today and tomorrow. It deals with the issues around hosting the Oracle Human Capital Management Suite of applications in a “cloud computing” environment. Since all of Oracle applications are deployable to the cloud, and People, Ideas & Objects will be hosting the Preliminary Specification in that environment, review of this paper will bring some insight into the needs of our software. It's important to note that Oracle is the world's second largest SaaS (Software as a Service) provider, with 5.5 million users worldwide.

It is proposed in the Hardware Policies & Procedures for People Ideas & Objects that the application derived from the Preliminary Specification will be run on a “Private Cloud”. The ownership and management of this organization is subject to the industries input for the purposes of their compliance to SEC and other regulations. Having the application served as a SaaS, as single-tenant, and on a Private Cloud denotes most of the architecture that the application will have to consider.

In a survey Oracle identified that the two most common business processes run on private clouds are Financial / Accounting @ 20%, and Human Resources / Benefits @ 19%. I think the Financial / Accounting category was largely underreported in the survey as there was also Home Grown Applications @ 16%, Inventory / Shipping @ 10%, and Procurement / Purchasing @ 11%. All three of these are probably or traditionally accounting related applications. Making for a total of 76% of the total of all cloud based applications. Clearly the cloud is being used for the purposes that People, Ideas & Objects is planning to use them for.

It is too early to evaluate the proposed People, Ideas & Objects solution on the basis of Total Cost of Ownership from the perspective of a producer. There are not enough facts available to make any decisions or valuable information that would hold up under scrutiny. The oil and gas producer is in a capital intensive business where the costs of ERP systems are not material to the bottom line of the enterprise. The value proposition that is offered in our Revenue Model provides for a radical cost savings of the software costs to the producer firm. The real value is the software identifies and supports an innovative and dynamic producer that is able to compete in the 21st century.

We have looked at the Oracle identity management and security offerings and included them within the Security & Access Control module of the Preliminary Specification. From a SaaS perspective these tools also provide further value in that privacy laws in the EU and other areas outside of the U.S. are covered by Oracle’s database, identity management and security solutions.

Tomorrow we will continue with the discussion of cloud computing and the various aspects that impact the innovative oil and gas producer.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.

The Preliminary Specification Part CCLXXXVI (RM Part XXXIX)

I’m intrigued by a grouping of modules within the Oracle Human Capital Management Suite (Oracle HCM Suite) that are somewhat new and provide the innovative oil and gas user with some unique value. Oracle calls this group of modules Oracle Fusion Talent Management which includes the following modules from the Oracle HCM Suite. Compensation Management, Incentive Compensation, Performance Management, Goal Management, Workforce Directory Management, Network at Work and Talent Review. I think that it is worthwhile to place the entire Oracle HCM Suite within the Resource Marketplace module of the Preliminary Specification. That way producers, Joint Operating Committees and service industry participants will be able to use the modules that they find meets their needs in the most appropriate manner. Recall that People, Ideas & Objects will be providing the software in a “cloud computing” environment which is consistent with the architecture that Oracle has developed their Fusion Applications under. Tomorrow we will be discussing the Oracle HCM Suite in a “cloud computing” specific environment.

The purpose in having a Talent Management grouping of applications should be obvious. In oil and gas we have a particular issue with the earth science and engineering resources that are the critical resource of the industry. The expected retirements over the next 20 years, the ability to train new recruits within that time, the increasing requirement of geology and engineering in each barrel of oil, and the expected demand for energy all make these people part of the key competitive advantages of an innovative oil and gas producer. Having software that focused on developing and maintaining these resources would be of great assistance, so lets have a quick look at what Oracle has prepared in terms of Oracle Fusion Talent Management.

First of all it is an assumption that the majority of these resources will be directly employed by the producers themselves. They will be seconded to the individual Joint Operating Committees by the producers that employ them, much as they do today. The employment contract will in all likelihood be comprehensive and include incentive and bonus compensation based on performance. With that said Oracle has three specific compensation related modules in their Talent Management group, Compensation Management, Incentive Compensation and Performance Management. These applications allow the producer to look at the compensation from the global and strategic perspective and from the competitive landscape. Particularly within the geographic region in which they are competing. In areas such as Performance Management the employee has tools in which to guide them through what is expected of them to keep them on course and attaining their goals.

Speaking of goals there is Oracle Goal Management for the producer to establish goals for the organization and individuals within that organization. In a top down manner the goals of the organization can be pushed down to the individual units and groups, and finally to the individuals to achieve within the appropriate time frame. There is also a capability in which employees are able to document their career development.

Oracle Network at Work is a tool that establishes a social network within the confines of the organization. I would think this might be of value if we had it for the entire oil & gas and service industries. Then the whole industry could collaborate and share the information they would share within a social network. The feature that this would have is that it would be dedicated to oil and gas as opposed to facebook which is unfocused.

How about a software tool to evaluate and prepare for the employee review process. In addition this is in a collaborative environment so that the input of the people who are responsible for the individuals performance have input into that process. The Oracle Fusion Talent Review does this and helps you develop the right talent for the right jobs.

The Oracle Fusion Workforce Directory Management provides a graphical representation of the organization chart. This is something that we need for the Military Command & Control Metaphor. The need to extend this beyond the individual organization to include members of the Joint Operating Committees participating producers and service industry representatives would be necessary. The tool provides basic information, including the role the individual holds, their supervisor etc. Exactly what we need in order to begin to impose a chain of command within the temporary organization that is established for operational excellence in the Joint Operating Committee.

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 (private circle, accessible by members only) and begin building the community for the development of the Preliminary Specification.