A Conversation in the CEO's Office

If we had the opportunity to listen in on a conversation that may be taking place between the CEO and the CFO of the oil and gas producers. The topic of discussion would be the financial statements that have been in the process of being prepared over the past month. These will have to be reported for the 2014 calendar year in a matter of weeks and the situation is rather dire due to the losses generated from the decline in oil prices, and the continued losses on natural gas. This conversation is designed to reflect the biases in the industry and why we are in the situation we are in.

CEO: So what you're saying is if we publish these financial statements. The losses that are reported will trigger certain covenants in our banking agreements and requirements with our bondholders. 

CFO: In addition our cash flows are negative, and at these prices, we will run out of operating capital in the second half of 2015. I recommend we shut-in these properties representing 30% of our production profile to ensure that we maintain a positive cash flow for the remainder of 2015.

CEO: No we are not going to shut-in any production. We’ve worked to hard and too long to bring the company to this level of production. I don't understand why you don’t appreciate the work that has been undertaken here. Let the other producers shut-in their production. 

I also don’t understand why we have to take such a large write down. Our assets are just as good as they were in 2013. Writing off half of our assets in one year seems extreme to me. 

CFO: Its a requirement based on the prices that were realized at the end of the year. The reserves valued at the lower prices dictate the value of the company. Lower prices equals lower value. 

CEO: You’ll note that these are accounting losses and don’t affect our cash position in the announcement, right. 

CFO: We’re limited in what we can say, but I’ll see what we can do. 

CEO: And get those bankers in line. They can’t put all the producers out of business at the same time. 

And that will be the end of the discussion regarding the financial statements and strategic changes made at the oil and gas producers. Nothing. Carry on with the status quo. The one aspect of this that should be obvious is that the production profile of the firm is a technical achievement that the engineers are very proud of. And they should be. The amount of work and effort that goes into the discovery and production of one barrel of oil or gas is phenomenal. The CEO knows this. And as is typical in the oil and gas industry, the industry is operated by engineers who have limited understanding of the accounting side of the oil and gas business.

That’s not to say they are uneducated. Most have MBA’s and are able to develop strategy and implement plans and create successful operations. However their accounting understanding in oil and gas is distorted by the requirement that companies follow the Full Cost Accounting requirements dictated by the Securities and Exchange Commission. These requirements have become so polluted as to be the issue responsible for the significant write downs that we will be seeing. When everything that an oil and gas producer does is capitalized it inflates the assets of the firm to fill the void of the value of the reserves times the price of the commodity. A value that has no basis in cost or the accounting world. Secondly with everything being capitalized, little is left to be expensed so that the firm shows revenues and small costs. Or high profitability. But oil and gas hasn’t been “highly” profitable. Thats correct, however they have been using a metric that creates “easy” profitability and high asset valuations.

These high valuations and easy profits have distorted the engineers view of their own performance. It encourages them to think that they are doing better than they truly are. If you took their performance on a purely cost basis, such as successful efforts, where only successful operations are capitalized and anything unsuccessful is expensed. It imputes a more conservative frame of mind due to the lower asset value and lower profits. This however would be closer to what a traditional accounting function would replicate in other industries. What full cost accounting attempts to do is determine what a market capitalization is for the oil and gas producer. Which is not what an accounting policy should be doing. For example Apple has a market capitalization of $646 billion and a book value of $111 billion. Investors are wise enough to know what the difference is. In oil and gas the disparity between market and book is not that significant as the assets are inflated by capitalizing everything in the firm.

The accountants responsible for these accounting policies want to ensure the engineers that they are cool, hip and “with it.” So they have bought into an accounting methodology that distorts the thinking of those that are not fully trained in accounting. That do not have a conservative point of view of performance. Therefore an engineer without these perspectives sees his assets building, his profits soaring and thinks they're doing everything right. When in reality the accounting is not reflective of the performance of the firm. And the CEO is being deceived. Leading to the kind of conversation that we noted above. And to the inevitable over production that we are seeing in the commodity markets.

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

Time, Time, Ticking

And that is what I did on my Christmas vacation, Mrs Herman. All joking aside I was busy doing a review of the project from stem to stern in terms of what could be done to improve the time and speed of our delivery. As you could see I was not too concerned about our cost. We can always justify our cost if our value proposition is being met. The existing business model of the bureaucracy provides us with a baseline for our value proposition. Cost isn't the issue, it will be the time that we take to deliver our product to the market. If the bureaucracy. Scratch that. When the bureaucracy fails there will need to be an alternative in the marketplace as quickly as possible. We will need to be there before (ideally) anyone realizes there has been a wholesale failure. As it stands today that is the opportunity we currently have in hand.

In terms of making the People, Ideas & Objects organization faster and lighter, 2015’s version seems remarkably nimble and flexible. The decisions that I announced to you of the cloud computing infrastructure for the development environment and deployment to the industry may not seem that significant to you at this time. From my point of view they are significant. I was able to cross off many boxes within our organization that don’t have to be filled now. A number of them were very senior positions. Our costs in terms of time, effort and the most important commodity energy. Are saved for our primary concern, our user community. We can keep our focus more clearly on our target without the distraction of tedious physical constraints of hardware issues.

And when we go to deploy our application to the producers through our service providers. Both of those communities will experience higher levels of hardware performance as a result of Oracles significant investment in the cloud. Something that we would never have been able to match. And something that we are able to attain by simply flipping a switch. Again without the significant deployment of capital, people, physical effort and energy to setup a facility that we might have ended up failing at in the end. The decision to go to the cloud in both the development environment and our deployment were decisions that I had to consciously make. I had always personally had the vision of the physical machinery within our own domain of control and never questioned it. The speed and lightness that this decision has made on our delivery could make the difference between our ultimate success or failure and may be responsible for reducing up to a full year in terms of our delivery time.

The other major decision that was announced. I made many decisions that I did not announce, some where the impact is too minimal or of little consequence to you. The other decision was to ignore the bureaucracy. As I stated to the investors and users the impact on them is significant. The impact on People, Ideas & Objects is sizable in terms of the time that will be required for us to deliver our product into the marketplace. This too may take a full year off our delivery time. But more importantly, as I stated, it may be responsible for removing 10,000 man years of frustration and heartache from the user community in having to deal with the compromises and contradictions of dealing with the bureaucrats. What could be more valuable?

Accelerating our speed to market will be a pressure that we all will begin to feel soon. It should be something that all members of the user community should ignore and disregard. It is beyond what can be dealt with in your day to day efforts. What is important is the quality of your efforts in making sure that the oil and gas producers attain the most profitable means of oil and gas operations. I’ll take care of the time of delivery issues and how we can make sure our efforts are more efficient. Its decisions like these that can save years, frustrations and heartache that are far more effective than what you can do to “speed up” your work. You can only affect quality. And by feeling the pressure to deliver sooner you’re going to affect your quality negatively. So don't concern yourself with speed and be assured that whatever can be done about the time to delivery is being done on your behalf.

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

To The Oil & Gas Investor

As an oil and gas investor you may have some difficulties with People, Ideas & Objects. That we understand. Let me try to explain. The first issue that is of concern is the budget that we have proposed. It is significant and includes elements that may be controversial in that they involve payments of royalties for Intellectual Property and healthy margins. The royalties on the Intellectual Property that I have developed over the past decades is how I am compensated for the work that I have done. This work is how the value in our value proposition is generated and is the basis that its equity is assessed. The firms profits are a feature of any commercial software developer. I would expect that after many decades of effort you would realize that I think now is the time in which I should collect payment for my efforts. I am therefore establishing these criteria for the Intellectual Property and the profitability of People, Ideas & Objects. It is an alternative we propose in replacement to the current bureaucracy. It provides for a profitable oil and gas industry and is therefore a reasonable proposal.

Bureaucrats will never change. Until you put in place a system that replaces the current bureaucracy you will continue to receive news of record oil production in the U.S. as of January 2015. There is a well established history here. Even after five years of financial losses in Natural Gas there is record production in that commodity. They will continue to destroy the commodity markets until such time as someone such as yourself takes the keys to industry away from them. It is almost like they don’t care, isn't it? People, Ideas & Objects are providing you with a tool in which to manage your oil and gas assets once you have taken control of those assets. But the software needs to be developed first. We have kept our powder dry and our candle lit for the day in which we can begin developments and take the responsibility away from the bureaucracy. If you can't see the end of the oil and gas industry at this point, then I can’t help you.

Recently Goldman Sachs suggested that there needed to be maximum pain to be realized in the oil and gas marketplace before a turnaround would happen. The BBC was quoted as saying that the creditors of the oil and gas companies were the targets of the Saudis actions. They, the ones who loaned the shale producers the money to drill, are the ones who have to be taught that the oil and gas producers are too high of a credit risk. If its the creditors they're trying to teach a lesson that means that you, the investor have been eliminated from the landscape.

What is it that you expect to come from the situation as it stands today? What possibly positive outcome is the result of today’s oil and gas industry? I can not see a viable industry in the North American marketplace under the current management and their strategy. Their inability to produce profitably will continue as long as someone else’s money is on offer. We clearly see that everyone is on to the game and its about to be seen as the ponzi scheme that it has been. If you were a bureaucrat and you knew where all the skeletons in the industry were, what would you do? Would you stick around? Or would you have been harvesting what you could for the past few years while the going was good and make sure that the exit plan was well in place? And don't act so surprised at the thought.

What this situation requires is action. I think it has required action since the financial crisis of 2008. Which I think was a warning that our system of organization wasn’t working. Just as the former Soviet Union’s system of organization wasn’t working. We complain that there’s no growth. Bureaucracies are finished, they can no longer provide for the needs of society and the writing of that should have become more and more evident to those that are operating in the investor class. New models are needed for the oil and gas industry to deal with the issues and opportunities that it faces. The way that it is organized and the manner in which people interact can't be on the basis of hierarchies and stuffing paper into printers. There are better ways and they have been detailed here in the Preliminary Specification with our user community, and the service providers. Someone recently referenced the term “Network Society” as the direction society was moving towards. That’s where we are heading. We just need your money.

And we can wait, certainly there is nothing urgent calling us to action that brings us to a life or death situation. Unlike what the oil and gas industry is facing. We'll be here in the years to come no matter the state of the industry. But understand it will take time to develop our solution. We have received none of the industries resources from the bureaucrats. We were weaned off of oil and gas when we first came up with the idea of using the Joint Operating Committee in August of 2003. As it was clear then the bureaucracy had to get rid of us, because if you use the Joint Operating Committee it is pretty clear that you don't need a bureaucracy. That would have been the time, if I were a bureaucrat, that I would have started planning for the escape from the industry when everything inevitably fell apart.

Its easy to write this dissertation off as one looney tunes rantings. I would agree. But I would also take a good close look around this earnings season and tell me how things will improve from here. How will this ship right itself? When will the captain jump ship? And how shallow is the water? Are People, Ideas & Objects offering you the opportunity to shift the makeup of the oil and gas industry in a manner that enables you to control the industry more effectively? If so then you'll need to contact me and we can go from there.

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

To The User Community Members

It is a bit of a change of our strategic position when we state that we will no longer work with the bureaucrats. Their choice to run the industry into the ground is something that we are going to watch from the sidelines and quite frankly enjoy with popcorn and refreshments. Their inability to work with us over the past decade was a choice that they made. They may wish to make a change and start to work with us to mitigate the damages that they are causing the industry. We however are not going to cooperate or participate in anyway. There are reasons for that and one of the primary reasons is the user community.

Making a clean break with the status quo helps in many ways. It helps you the user community participant the most. No longer will you need to consider the situation that exists today, or the concerns of how things are done today. Ours will be a clean slate approach where the optimal solution can be adopted. No compromises with the ways and means of the “thats how we did it in the past” or the “but we don't do it that way” type of arguments. Those won't stand and we can move on from those and formulate new processes and new positions for the oil and gas producers based on the most profitable means of oil and gas operations.

When we take the Joint Operating Committee and make it the key organizational construct of the dynamic, innovative and profitable oil and gas producer. We introduce conflicts and contradictions between it and the bureaucracy. If we try to reconcile these conflicts and contradictions then we are moving away from the purer sense of the opportunity of what is at hand here at People, Ideas & Objects. By stating we will not be working with the bureaucrats we have eliminated the conflicts and contradictions that we would otherwise have had to reconcile. Your job in designing and developing the Preliminary Specification into the software that you will use as service providers will be able to be developed quicker and more easily with a more consistent approach to the Joint Operating Committee. The natural, cultural ways and means of the oil and gas industry.

Its when we try to add humans to the mix that the problems come into play. And we will have those problems. What we won’t have is the problems of humans that are stratified in a hierarchy with their unnecessary rules and regulations that are necessary to make that entity function. I feel it is my job to remove as many of the obstruction from your path as I possibly can. In terms of obstructions, the bureaucrats and their way of life are the biggest obstructions known to man. That we can eliminate them is cause for celebration. Everyone should get up and quietly do a happy dance.

Declaration of the death of the bureaucracy may be seen, and may come to be, premature. It will be inevitable though. Our time is coming and our patience will be rewarded. We have shaved years off of our development time today, and 10,000 man years of frustration and heartache from our user community. Bureaucracies do not change and their ability to adapt to the current environment is well beyond what their cash and capital reserves will allow. The investors have been on strike for a long time. At least as long as 2008. Bureaucrats have been living off borrowed funds since then. Banks have not been loaning any money any more as they knew the game was fixed and they were the mark. That left the junk bond market as the only place to get funds. The primary source of funds of all healthy industries. Bureaucrats used $1.2 trillion of junk bonds in the past two years. Now that path is closed as well. Therefore they are left with the money they are able to earn in the marketplace. And they will produce as much as they can to try to generate as much cash as they can before they all go broke from low commodity prices. The ultimate example of circular thinking on a grand scale.

The business model of using other peoples money is at the end of its road. They've destroyed both commodity markets, all the credit markets and the investors faith, what else is there. They never knew how to produce a real profit. Only accounting profits based on full cost accounting where everything, including royalties apparently (remember PennWest), are capitalized. If you gave five people ten million dollars each. Where only one was a brilliant geologist who found nothing but oil and gas. And four people who knew nothing about oil and gas. When you came back a year later and looked at their financial statements they would all look the same. You would not be able to tell who was the superstar geologist from the financial statements. What kind of accounting is that? I digress. The point is that the business model was never sustainable and the day in which its reckoning is upon us. The Saudis know it, I know it, and a few more people are beginning to realize it each and every day.

People, Ideas & Objects provide a viable alternative for which we can rebuild the industry. One where we provide the producer with the most dynamic, innovative and profitable means of oil and gas operations. The user community is our focus and the key to our quality. With this decision to ignore the bureaucracy we are able to move faster with less constraints. And for that reason alone its a good decision.

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

Pick Your Fights Carefully

And that is what I have done. That is, that is what I hope I have done. Picked this fight carefully. The fight I'm talking about is with the oil and gas bureaucracy. A few weeks ago I stated that I will not work with them and that is the position that we have taken here at People, Ideas & Objects. We've picked the fight that we want to have. And we intend to win this fight to ensure that we provide the oil and gas producers with the most profitable means of oil and gas operations. And the user community remains the primary and only focus of our software development efforts today and always in the future.

Oil and gas commodity prices might be causing the bureaucrats backs to bend a bit towards working with us. I hope I've made it clear to them that they should keep a good stiff posture and ride their business model to the grave. I'm giving them no option in which to change. Its a position that we are taking that makes the oil and gas investors choice as stark as is possible. The bureaucrats and their losing ways or People, Ideas & Objects with their dedication to providing the oil and gas producers with the most profitable means of oil and gas operations. We will not be compromising with the bureaucrats to bail them out of a situation of their making. Its their bed let them lie in it.

I don’t expect that the future holds much promise for the oil and gas producers as they are currently configured. I see a series of events being triggered from these low oil and gas prices that will make the organizational performance of these firms continue to degrade permanently. First we will see the losses that prices will create. The inevitable layoffs and reorganizations that will provide no relief to the issues. The bankruptcy of a large percentage of the industry due to their binging on credit the past number of years. The concern that this will raise in the banking sector as to the viability of the oil and gas industry. Which will lead to the demand for payment of the outstanding debts at the major banks as a credit crisis is felt in oil and gas, and not the banking industry this time.

Of course the investors who are treated with such respect and concern for their investments throughout this process will be standing there looking for some scalps. By this time the bureaucrats will have hightailed it out of oil and gas and will be establishing themselves in the next great employment opportunity, whatever industry that may be. The destruction that will be left in the wake of this price collapse, that could have been dealt with by now, if only, will be one for the history books. Liz Ann Sonders who we have quoted here before thinks this is the end of the commodity super cycle. The investors should consider what the bureaucrats provided them during this commodity super cycle. I'll remind them. Nothing, absolutely nothing. They would have been better off participating in the commodity exchanges.

Or maybe I'm wrong and the sun will shine tomorrow and the natural gas price will triple with the migration of the Monarch Butterfly. Bureaucrats will be seen as the effective solution over technology throughout government and industry. And countries like Russia and Belarus will be seen as the prototypes for harmony and efficiency.

This is a fight that we can win. They have a losing hand and little to nothing to augment their position. We have speed, dynamism, innovation and profitability to offer the oil and gas investor. And a pile of future profits the size of the U.S. Federal Reserve. We don't need the bureaucrats, we don't want them and they provide no value to us, our users or the oil and gas investors. Its time to cut any possible ties to them and establish the first blow by stating their on their own. Don't look to us to bail you out. And don’t think to touch any of our Intellectual Property, again. Its not for your use or purchase. Its time to sink or swim and there are no life rafts, preservers or help from us. Goodbye!

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

Budgetary Changes

One of the things that I did during the time that I was off was I took a sharp pencil to the proposed organizational makeup of People, Ideas & Objects. To see if there was any way that we could make the organization perform better in the future to meet the needs of the user community and the oil and gas industry. What a difference. The question that I asked myself is if we were such big believers in cloud computing why were we not implementing these technologies within our own organization at every turn. To date we have implemented them and have benefited greatly from them. One look at our budget however and you can see that we took the mindset that was very typical of the 20th century bureaucrat. We had allocated $200 million to build our own cloud computing facility to host the People, Ideas & Objects application when it was complete. The question was, was this the appropriate direction?

This questioning also involved our software development environment. Many services are springing up that provide the horsepower necessary to host a software development environment that would meet the needs of a development environment that People, Ideas & Objects requires. What we would need is an excessive amount of computing power for those times in which we would build elements of the application. Oracle is now one of these firms offering these software development hosting services. This removes a significant amount of capital from our development budget but it also reduces our organizational overhead in many ways. We don't have to concern ourselves with the minutiae of keeping servers up and running and backing up everything as many times as possible. These services will be provided to us by using Oracle services. Providing us with lower costs, easier administration but most importantly the speed of our development team will be enhanced and our focus sharpened.

Offering our application in a cloud computing configuration to the dynamic, innovative and profitable oil and gas producer was always the consideration. Under the decentralized production model, when we move the administrative and accounting resources to the service providers, why would we leave the IT staff at the oil and gas producer? We wouldn’t. The point is instead of providing that service ourselves by buying Oracle hardware and running it ourselves, we will be purchasing Oracle cloud computing services to run our application on their servers and deliver our applications in that manner. The oil and gas producers won't know the difference. Other than the fact that Oracle will have sizably larger facilities and therefore much higher performance than what we would have been able to provide. We will save the $200 million in capital that we allocated to build the facility. Reduce our overhead and organizational complexity by the costs of maintaining that facility. And most importantly again pick up a factor of speed in which we are able to deliver our product to the marketplace, and sharpen our focus. We are not currently hardware experts. We were going to have to become hardware experts. Now we have Oracle, who are hardware experts, now we don't have to be hardware experts. Speed to deliver the application in terms of time of this type is an important point. We may have been able to deliver the world’s best application and failed to deliver it due to our inability to get the hardware right. This is a critical change in our makeup, our strategy, organization and time to deliver. It also reduces substantially our technical risk.

And look at that change in our budget. Some might think that reduces our budget by $400 million! And some would be wrong. I have reallocated these funds across the Oracle budget categories to enhance the work that they will be doing for us. This is in order to recognize the cost of the rental of the computer time for the cloud computing services of the development environment and application delivery. A $100 million boost to the Oracle Developers category to shore up the number of people we are able to access from the mother ship. And an overall loosening of the budget constraints of the other categories. What we are approaching in the oil and gas industry is unique and necessary. Our success is critical to the success of the profitable oil and gas producer. Our value proposition dictates that this money won't be missed. Therefore we are deploying it to the areas that will increase the probability of our success.

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

The Product Owner in our Leadership Team Part III

We have been discussing the Product Owner position in detail this past week. This position is a key part of our leadership team that we are currently recruiting. If you have an interest in the Product Owner position for one of our modules or technologies please contact me below. In the last post we discussed the Leader and Team Player attributes of the position. Today we continue with several other attributes of the Product Owner. Quotations are from the book “Agile Product Management with Scrum: Creating Products that Customers Love” by Roman Pichler.

People, Ideas & Objects state that we are filling a “gap” between the oil and gas, and Information Technology industries. Creating a sub-industry where nothing exists today. This “gap” exists as the technologies have become too specialized and as a result technology firms are unable to fully understand the needs of its customers, the oil and gas firms. What we are doing in filling this “gap” is providing a means of communication between the oil and gas and Information Technology industries so that they operate more effectively. In the book Roman Pichler states that the Product Owner is an effective communicator and negotiator that operates to “communicate with and aligns different parties, including customers, users, development and engineering, marketing, sales, service, operations, and management. The Product Owner is the voice of the customer, communicating customer needs and requirements and bridging the gap between ‘the suits’ and ‘the techies.’” It is this role as communicator and negotiator that we are placing so much emphasis on the Product Owner role within our leadership team of the user community.

The next two attributes that an effective Product Owner requires are to be empowered and committed. The ability to present new projects for development, and the ability to cancel poorly performing ones are necessary for the continuous improvement of the modules. The Product Owner also needs to have budgetary control of the module they are responsible for. These attributes impute a senior level of responsibility, especially considering the size of the user community budget for each module. Therefore an executive level of commitment is expected in return and as the book states “A successful Product Owner is confident, enthusiastic, energetic, and trustworthy.”

The physical location of the Product Owners matters. Our development team will be based in Houston. Therefore the Product Owners will be based in Houston. The need to have the Product Owners interact with the development team for their individual modules on a regular basis is a necessity. And this requirement would mean a minimum of two days per week. The offices of the Product Owners and user community resources will be located with the development team, therefore this will not be an issue.

Another key role in the development team is what is called the ScrumMaster. “The ScrumMaster supports the Product Owner and the development team, protects the team and the process, and intervenes appropriately when required to ensure that the pace of work is sustainable, that the team stays healthy and motivated, and that no technical debt is incurred.” And “The Product Owner is primarily responsible for the “what” -- creating the right product. The ScrumMaster is primarily responsible for the “how” -- using Scrum the right way. Only when the right product is created with the right process is enduring success achieved.”

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

Not Your Normal Business Operation

The number of times that I've thought that this project should be funded and proceed is beyond my capacity to count. What we have in our value proposition is evidence that the bureaucracy will never act, ever. It is reasonable to assume at this stage that producers are paying capital derived in some form in order to produce oil and gas. That is to say the industry is generating negative cash flows. Their argument of course is that the commodity prices could be just as far on the beneficial side of industry. And of course their correct, when you sit and wait for events to happen to you there are good and bad things that can happen. That however doesn’t mitigate the losses that they are incurring currently. I think what they, the bureaucrats, have to look at is how seriously they have put their firms and the industry in North America in jeopardy of significant failure. And unnecessarily so.

What we propose in the Preliminary Specification, the user community and our service providers is a radically different way in which to operate the industry. One that has a value proposition that is approximately $350 billion greater than the bureaucrats for 2015. The cost of doing this is incidental in terms of the value that is generated. However the cost is still $4 billion and we are a start up. The chances of that happening on a sunny day are approximately one in one zillion years. The thing is its not very sunny in oil and gas and the way that the industry is headed seems to be one of those times when action needs to be taken.

Now I could say that I could do this for $5 and some of the bureaucrats would find that attractive because they would know that it would be impossible. And hence they get to stay in power a little longer and we would be destined to fail. Or I can choose to be open about what the costs are and expect that the situation be evaluated on the cold hard facts of the situation. I’m not the one who is bringing the problem to the investors, we are the ones that are bringing the solution.

We are most certainly thankful for the situation in the commodity marketplace today. It makes our job much easier. And this situation may come and go over the next few years as producers muddle along. The appearance of shale gas on the market is the guarantee that we will have pricing issues for the next 40 years if the bureaucrats are kept in place. The nature of the reserves bring a new dynamic and characteristic that the bureaucrats have proven themselves to be unable to deal with. Without the decentralized production model as provided by People, Ideas & Objects et al there is no alternative to the price maker strategy. And we are protected by copyright.

To make the decision to proceed with People, Ideas & Objects et al would be something unique, one of a kind decision and dependent on the situation. Its not subject to the normal business rules of what a business does and how it generates its business. We are adversaries of the people we want to replace, our current customers! However, if I were failing in such a wholesale manner as the bureaucracy is today, I would hope that there was someone holding me to account. And in that sense the market seems to be working. However, on a much larger scale than what we have seen in the last hundred years.

Information Technology is providing us with opportunities to conduct our business in different ways. The thing that is stopping us from making these changes is the way that we do things today. The problem is that its not only getting in the way its also dragging us down and we need to break away from it as quickly as we can. People, Ideas & Objects seems radical but its also what we need right now.

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

The Product Owner in our Leadership Team Part II

Our second installment of the Product Owner positions series begins to look at the desirable characteristics of the individuals in these roles. I will be quoting heavily from the book “Agile Product Management with Scrum: Creating Products that Customers Love” by Roman Pichler. As Product Owners I want them to be the individuals that are responsible for the success of the module that they work with. That their user community is how they achieve that success and they hold our development team to be accountable to the needs of the user community. In order to achieve the oil and gas industry wide software development capability that I think is necessary. One that identifies and overcomes the industries issues and implements its opportunities on a real time basis. I think this is what will be required on a minimum basis.

I have always classified the world into two types of people. Thinkers and doers. I'm a thinker and thankfully there are few of us. The rest are doers. And the book by Roman Pichler says that the Product Owner needs to be a visionary and a doer. I don't think I've personally met anyone with those qualifications but we'll take his word. He defines the Product Owner as an “entrepreneur, the product owner facilitates creativity; encourages innovation; and is comfortable with change, ambiguity, debate, conflict, playfulness, experimentation, and informed risk taking.” All attributes that everyone would encourage.

The next attributes that are highlighted are “Leader and Team Player” and the author has highlighted a phenomenal quotation that I've quoted below.

The Entrepreneurial Team 

We sometimes focus on an individual as the amazing entrepreneur or the outstanding leader -- thinking of Bill Gates, Steve Jobs, and other celebrity leaders. In reality, very few innovations are a stroke of genius attained by one person. And even if the product owner is Mrs. or Mr. Innovation, the individual still needs a team to bring the product to life. No entrepreneurial genius can make all the right decisions. In fact, neuroscientific research reveals that even the best qualified person in the right job at the right place can make wrong decisions -- if that person decides alone. Finkelstein and his coauthors attribute this to the way human cognition works (2009). They recommend using at least one other person as a sounding board. A team provides plenty of sparring partners to test ideas and arrive at the right decision. Ed Catmull, president of Pixar (2008, 68), says this: 

… if you give a mediocre idea to a great team, they will either fix it or throw it away and come up with something that works. 

The wisdom of many is preferable to the brilliance of one.

Which says all there really needs to be said about what we are trying to achieve here at People, Ideas & Objects. The user community is the key to the success of the oil and gas industry in terms of its abilities and capabilities. Software defines and supports organizations. The user community defines the software. Therefore a great team positioned in the user community would be the objective that we should all be pursuing to ensure a successful oil and gas industry. And the Product Owner has an interesting view of these events.

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

A Choice for the Oil and Gas Investor

Commodity prices are not behaving as the bureaucracy would want or expect them to. It would seem to me at this stage in the oil and gas industries development that we would have figured out that if we were going to produce oil and gas that it would at least be profitable. It seems rather wasteful to be taking the commodity that is irretrievably lost once its used and dispose of it with a handful of financial losses with it. The value that the oil and gas industry provides other industries and consumers doesn’t seem to earn the respect of the bureaucrats who just produce oil and gas no matter the consequences. I'm pretty sure we'll look back on this era as a time when we'll regret our waste and the havoc that has been caused in the financial markets. But please note the important criteria that none of the bureaucrats jobs have been lost in this effort, nor have any pension funds been un-vested with any of their pensions, if un-vested is a term. And if things do get bad for them they do have other choices in other industries.

Why should the industry be focused on profits? The simple answer is that we have a lot of work to do. We can't rely on the capital markets forever. This is a mature business, which would indicate that it provides for its investors and has some control over its day to day. Neither can be stated to be the case in oil and gas today. The investors are unhappy, and only the bureaucrats are happy that they have construction for the cabin’s expansion underway this winter. Oil and gas is sold at whatever price is available today. And don't ask them about the cost of what that property is. That only makes the bureaucrats blush. All this talk that it takes $50 oil for shale to make money is what the analysts are determining. Not the producers.

People, Ideas & Objects offers the oil and gas investors a fundamentally different business model that we call the decentralized production model. It is part of our Preliminary Specification. It provides the dynamic, innovative and profitable oil and gas producer with the capability to employ the “price maker” strategy for their oil and gas production. Simply if the property can be produced at a profit then it is placed on production. If not, it is shut-in and worked on by the geologists and engineers to determine how to make it produce profitably at the commodity prices in the marketplace. And when the Preliminary Specification determines the profits it will be the actual profits of the property. The revenue less royalties less operating costs less accounting and administration costs that are incurred by the property. The actual costs, not estimates or accruals, actual costs.

The advantages of doing this are simple however significant. Based on the decentralized production model we have calculated our value proposition in the trillions of dollars. When a property is shut-in it keeps the reserves that would otherwise incur a financial loss and be wasted. And saves them for a time when they can be produced profitably. The producer will increase their profits during the financial period as a result of shutting-in unprofitable production. Even though their production profile will be lower their profits will be higher as they will not be carrying any unprofitable properties. And the best part is that the commodity markets have less oil or gas in the marketplace placing upward pressure on the commodities prices. Moving the commodity markets to the marginal costs. The key to our value propositions creation of value. As evidence by today’s market prices, and actions by the bureaucracy which shows they can’t, won’t, don’t, will not do this, ever. Bureaucracies do not change, ever. People, Ideas & Objects is offering a choice as the only alternative to this insanity in the marketplace.

If this seems logical and simple to you go ask a bureaucrat why they don't implement it. Watch them explode. The net effect of implementing the Preliminary Specification is that the bureaucrats are put out to pasture permanently. They're not needed and will be rendered useless in no short order. Much like the record store manager was by Apple iTunes. This is why the bureaucrats are being careful what they say. Making sure they don't get caught in a trap they can’t get themselves out of. Like saying they can cut back on production. Which of course they can't because they're just not built that way.

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

The Product Owner in our Leadership Team Part I

Something people have to keep in mind about People, Ideas & Objects is that we are currently in development. By focusing on developing the user community, this is a key part of the software development and the software development capability that we will be providing to the industry. It may seem to the casual reader that things are static at this point, however, as this year develops we will see that this development in the user community will bring about many of the desired outcomes that we anticipate. Stay tuned, I promise this will be an interesting year.

One of the things that we are experiencing is that with the Internet and cloud computing our progress is able to move at the speed at which change is happening. We are not being constrained by the traditional resources of a software developer. Everything is virtual at this point and as a result is able to accommodate the needs of the people we are appealing to and the oil and gas industry. We have a lightweight footprint that is unconstrained by the physical world.

One of our objectives is to recruit the user communities leadership team and have them represent the user community to the oil and gas investors. This was to secure the funding necessary to develop the Preliminary Specification and have the user community and service providers developed. I recently changed my mind on this point. We will continue to recruit these positions, however, we are not going to expose any of these individuals to the antics of the bureaucracies vindictive ways. There is no reason that these people need to take on any career risk by being named here. Therefore from the point of view of what will be expressed to the investors, what you currently see, is what you get.

I am therefore going to begin to detail the specific positions that we are looking to fill in the leadership team and what those positions will be doing. The first position I want to discuss is the Product Owner positions of the user community. We expect that there may be upwards of 20 out of the total of 30 leadership team positions being Product Owners. Starting today I want to begin a discussion of that role and what they provide to the user community, the development team and to the software quality.

The quotations that I will be making are from the book, “Agile Product Management with Scrum: Creating Products that Customers Love” by Roman Pichler. What he suggests as the reason that the Product Owner role exists is to solve the issue of having too many cooks spoiling the soup. Having a single individual leading the development of the product from beginning to end provides this solution. Making one person responsible for ensuring its success and ensuring that everyone involved has a shared vision of the product is the Product Owner role in the development. In the broad scope and scale of the Preliminary Specification I am more or less its Product Owner. But each Product Owner in the leadership team will be either responsible for one module of the Preliminary Specification or some element of the technology. For example the data model, the user interface etc. So for example we will have a very senior individual who will be the Product Owner for the Partnership Accounting Module, and they will have the authority and responsibility for that module.

In the book the Product Owner role is defined as,

The Product Owner is the one and only person responsible for the managing the Product Backlog and ensuring the value of the work the team performs. This person maintains the Product Backlog and ensures that it is visible to everyone. 

If we think for a minute we may have 250 to 300 users in the Partnership Accounting module. This being a simple mathematical representation of the total of 3,000 people in the user population. There may be a need for far more people, especially considering the Material Balance Report which is a critical part of the module. The scope of the module is very broad, however it is consistent in terms of the type of work that is being done and therefore can be handled by one leader or Product Owner. Ensuring that the user community has considered the differences present in the People, Ideas & Objects Preliminary Specification. Having adopted those differences in their input and their analysis of what is required in their systems. It is then the responsibility of the Product Owner to ensure that the development team delivers that product to the user community.

The background of the Product Owners for People, Ideas & Objects purposes is from the business domain. Although a key member of the development team, their understanding of the business domain is what is required. Particularly with respect to the manner in which their understanding of these critical oil and gas processes are handled. It can take years, and sometimes decades before people are fully aware of the total scope of the processes under management in modules such as the Partnership Accounting module. A technological focus is not what we need to ensure product quality or to represent the user community. There will be significant developer and user collaborations and interactions throughout the course of product design and development. And the developers will have time to understand the nuances of the particular parts of the module from individual users, however there is the bigger picture that needs to be captured as well. And from a business perspective, that needs to be provided from the Product Owner.

We'll be discussing the Product Owner position in more detail in the next few days. If you have an interest in these positions, or any of our leadership teams positions please contact me.

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

A Quick Review of Our Plan

I made the statement last week that I would not work with the bureaucracy in the development of this software, its user community or the service providers. Seeing how they had chosen to concern themselves only with their interests when they had the opportunity to work with us for the past decade. That we were providing them with the opportunity to expand the oil and gas industries output through specialization and the division of labor and provide higher profitability through the “price maker” strategy that we enable in the decentralized production model. Their choice was to take what we had developed and attempt to eliminate it without any compensation towards us. Now that they have caused the oil and gas producers to lose money at a remarkable rate we don't need them and we certainly don't want to emulate their way of doing business. So why exactly do we want to work with them?

Our budget. The producers are the source of the financial resources that are necessary to make this community operate. One thing I can assure you is that the feeling of not working together is mutually held by the bureaucrats. And if the bureaucracy was concerned about the loses that the producers were incurring, don’t you think they would have begun the search for solutions to solve the problem? Maybe even five years ago when the natural gas prices declined. The only reason that they have the ability to stay in power in terms of the administration of the oil and gas industry is that there is no alternative for the oil and gas investor to turn too. And that is point that we have to make in this next year. That the failure of the bureaucracy will continue until an alternative is put in place. And we are that alternative. All that is necessary for this community to begin the transition is for our budget to be funded.

In order to do that we need to be prepared to provide that solution to the marketplace. We have detailed a vision that is complete within the Preliminary Specification. A method of how the oil and gas producer and their assets will be managed through the user community and service providers. We began January 1, 2014 in the development of the user community. This is the hard, expensive and time consuming work that most ERP systems skip. We have defined a leadership team for the user community and began recruiting for the 30 or so positions that make up that team.

Our plan is simple. Present our leadership team, the Preliminary Specification and our method of management to the investors in the oil and gas industry and have them fund these. I don't expect the investors to fund us directly from their pockets. I expect them to direct the oil and gas producers to do so.

As unreasonable and difficult as this appears in terms of it occurring. It is the best hope that we have of ever being funded. The bureaucrats will never fund a competing solution to their franchise. It is the equivalent of suicide to them. They intend to stay in power as long as possible and will not concede anything to anyone. For five years they have allowed significant losses to occur in the natural gas business without a word of discussion about what to do about it. Do you hear any discussion today about what they will be doing to “fix” the solution in terms of the losses that oil and gas companies are incurring today? And you won’t, ever.

Offering an alternative to the status quo is the best that we can do at this time. It is also what is being done in most industries by Information Technology. Some industries are far ahead in terms of the changes that are realized through technology. Some are far behind. Oil and gas needs to change now because of the difficulties that the bureaucracy are proving incapable of and too self interested to deal with.

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

No Posting Today

In recognition of the U.S. Martin Luther King Jr. day.

A Brand New Sandbox

Anyone who reads the Preliminary Specification can see that it is fundamentally different from anything that is available in the marketplace today. This difference can be attributable to many things which include use of the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. When we make this change there is nothing within the oil and gas producer or the oil and gas industry that doesn't change from the point of view of what exists today. It is a mindset change where we stop working against the culture of the industry, the Joint Operating Committee, and adopt the natural flows of its legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. In order to complete this mindset change we need to make some changes to the way that both producers and the industry are structured. We discussed some of these point here on Monday and Wednesday of this week when we commenced the second year of development of our user community.

Now if we take the discussion that we have had in those days regarding the changes of the user community participant and their roles in the user community and as a service provider. (This discussion included the user community participant as the service provider founder. The size of the both the user community and service providers in terms of people and revenues.) Both of these roles are unique to the industry and to what a prototypical producer employs today. If we build systems for today’s bureaucrats we will just be endorsing their ways of losing money. Don't we want to break the industry of that habit? Producers today have thousands of people supported by systems and procedures that can’t be changed by anyone. They're on autopilot and the plane is in a steep dive. Nothing can be done. Why would we want to model systems to emulate that situation? We need to come to the table with a new vision of how the world will work. A new business model for the 21st century. One that is profitable and provides for societies needs. The Preliminary Specification.

Our user community participants need to therefore determine what it is that they need in this new world where we will provide oil and gas producers with the most profitable means of oil and gas operations. Who else is going to be able to make the changes necessary to the business models of the industry when the time comes. As we see with the bureaucrats, no one has control of the plane. We're all just passengers on a mindless adventure. That is until it ends tragically. In the future, the user community participant needs to be mindful of the dangers ahead and implement the solutions needed for the industry and the producers to avoid any pitfalls that might occur in our business models. We are providing the industry, and the producers, with the software, the software development capability, the user community and the service providers in order to ensure that they have the overall capability to avoid the death of their industry. The future may hold much more in terms of difficulties than we think. To lock ourselves into one software configuration is the lesson that we should be learning from the bureaucracies inability to change from the current status quo.

The other thing we need to be learning is this is a fresh approach. Don't bring your legacy thinking to this project and have it weigh down our approach. This is a brand new sandbox delivered last night while we were sleeping. It’s big, its wide and its deep. Plenty of room for everyone and their toys. So join me and lets have some fun.

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

Losses are Completely Unncessary

Those unnecessary losses of course being those that have been incurred in the past five years in the natural gas side of the business. And the losses that we anticipate will be incurred on a go forward basis on both the oil and gas sides of the business. What everyone knows inherently about the oil and gas business is that the commodities are highly inelastic in terms of the supply and demand curve. I know we all learned this economic principle in university so I won't go into too much detail. But the long and short of it is. Removing a small portion of the current oil or gas production from the marketplace, in an inelastic supply and demand situation, leads to large impacts in the prices of oil and gas. The reverse, or what we are experiencing today, where a small volume of excess production hits the market has significant downward pressure on the prices. Its good to see we all agree on these fundamental economic principles. Excuse my condescending tone, however there is a purpose.

As we indicated the other day, the bureaucrats who have been educated in the economic principles of specialization and the division of labor, have refused to deal with the issues of low natural gas prices for the past five years. This is with knowledge of the Preliminary Specification and decentralized production models availability in the marketplace. We know they know about our product because of their antics regarding our Intellectual Property. We also know that they know the principles of inelasticity. So why has nothing been done? I'm at a loss to understand how the custodians of an industry could have brought it to the brink of total destruction knowing what we know they knew.

What is currently being discussed in the industry regarding low oil and gas prices? I don't hear anything. Why is that? The bureaucrats have nothing to lose therefore what is there specifically to discuss? If everything fell apart tomorrow they would be faced with the fact that the cottages gardening could be expanded substantially to take up most of their time and energy. What exactly is the issue? Certainly there will be difficulty keeping occupied in the winter but that is why they moved the cottage to Costa Rica! If there is a need to keep working there are other industries outside of oil and gas. Clearly the perception of an issue being at hand is that which is held by a small group of concerned, self interested loonies.

And I have been called worse by our friends the bureaucrats for many years. There strategy of waiting this out and having the oil and gas prices eventually recover is valid. The trouble is that with natural gas reserves being as they are today, they will never recover without the ability to implement some form of production discipline in the marketplace. This is because of the new element of shale reserves in the marketplace. Show me a producer who doesn't have a trillion cubic feet of gas and I'll show you a start up. And as obvious as that is on the natural gas side of the business, it is the complete opposite on the oil side. Natural gas reserves from shale could last 50 to 60 years. On oil they may last 10 at current production volumes. And at the rate they are developing them they could have them exhausted far earlier. Under either scenario, its the prolific nature of the flush production that dictates the price destroying characteristics in the marketplace. Its not that these producers are playing with matches, they’re playing with dynamite. And they need a method of production discipline to ensure that they don't destroy the marketplace every time they drill a well. The decentralized production model provides production discipline and the “price maker” strategy in the Preliminary Specification but that requires the bureaucrats will need to first work to build the software and then be forced into retirement by the software’s existence.

I’d rather be a loon than someone who consistently detonates their business interests. And so unnecessarily. I’d like to think there is some intelligence in the oil and gas business. An expectation that provides proof once again that I am a loonie.

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

This is How it Will Work

If you've worked in oil and gas accounting or administration, the earth science or engineering disciplines and have some ideas on how things could be improved. If the Preliminary Specification resonates with your understanding of how the industry should operate. Maybe you should be part of the user community and become one of the many participants that will work with our developers to provide the most profitable means of oil and gas operations. This would be a business decision on your behalf. After People, Ideas & Objects budget is funded a significant portion of our development costs are used to support the people who are involved in the user community. The revenues you would earn from being a user community participant would provide you with a good foundation for a new future in the oil and gas industry.

Consider for a moment that the industry would be changing structurally and substantially when we proceed. The producer itself would no longer directly employ any of the people involved in any of the administrative or accounting areas. This is a substantial reallocation of the General & Administrative costs of the industry to the service providers that as of today do not exist. And People, Ideas & Objects will be looking exclusively to the user community participants to form these new firms and establish these services for the producers. It is the user community participant who will be designing a new oil and gas industry, and the way that they will interact and engage with industry from a commercial point of view.

These services that provide the process management that the user community participant defines will make up the majority of the revenues that are earned by the user community participant / service provider in the new oil and gas industry. And they will be sizable. Depending on the process that is managed and the number of people that are employed by the service provider they will share in the “new” service provider “sub-industry” that they are creating that replaces the G&A costs of the producer firm. These are estimated currently to be in the region of $40 - 60 billion per annum in the North American oil and gas industry.

On a day to day basis as a service provider you'll be responsible for managing the process on behalf of your clients, the oil and gas producers. This will involve mostly automated processes that People, Ideas & Objects software and your staff will conduct to ensure that the producer maintains the most profitable means of oil and gas operations. The other half of your organization will be in a constant state of review of your processes and determining the ways in which they can be improved in terms of the efficiencies and costs to the producers, but also the quality of the products that are delivered. It will be this work that will involve the developers of People, Ideas & Objects in which you make the necessary changes in the software to increase the specialization and division of labor, incorporate new business models or provide business changes from the environment the producers operate within. This area of the service providers business will be very advanced and scientific in terms of the type of work that is undertaken. Providing much of the real value add in you firm.

This should help to further define the type of people that we are looking for to make up the user community participant. The number of service providers will be very large as the size of this industry is significant, as is the number of processes under management. If this appeals to you and you think that this is the future of how work will be undertaken in the oil and gas industry you should think about the future here. There is much to do in preparation. Preparation that needs to be undertaken for any future, such as the augmenting your technology skills with those Java and Relational Database courses. Risk? Sure there is risk, but the risk that the bureaucrats further destroy the industry is much higher in my opinion.

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

It's Time For Change

People, Ideas & Objects is looking forwards to a very active year in 2015. With the decline in the oil prices in the last quarter of 2014. And the further decline in natural gas prices in the month of December, our time has come. The Preliminary Specification decentralized production model deals specifically with the commodity prices and enables the producers to enact “price maker” strategies. Nothing could be more timely. But its not just the decentralized production model that we provide as solutions for the industry. By using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. We are able to provide solutions to the current and future issues and opportunities of the producers administrative, accounting and operational domains. That is the real value of the Preliminary Specification, beyond how it resolves today’s problems.

However today’s problems are problematic for all producers. Year end has now begun for the majority of producers based on the oil and gas prices that were in play at the end of the year. Operational losses of material scope will be announced in the next few months. Additional write downs of assets to the commodity prices will also be carried out by the audit firms. This is perceived by many in the industry as being of a non cash item and therefore not of concern. Producers would be wise to remember that this was your investors money and is evidence that it is worth less than what it was when it was given to you. I expect to see a bloodbath.

Its not that there has been any real discussion of the issue of how the industry will deal with low commodity prices. Any strategic or tactical plans, or any discussion at all, appears to be missing from the discussion of lower oil and gas prices. CEO’s and CFO’s seem to have their heads firmly placed in the sand and are unavailable for comment. In consideration of their situation, its not that they can do anything about it. Their business model is completely inflexible in terms of its operating strategy and full production is the only methodology. Their only alternative was to talk to me and adopt the Preliminary Specification with its decentralized production model as an alternative operating model.

That was yesterday. Review of this blog’s calendar feature shows that we began writing this in late 2005. We published the proposal for the Preliminary Research Report which offered to research the idea of using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer in August of 2003. If you look at anyone of the entries in this blog it is regarding how we can build systems for oil and gas based on the Joint Operating Committee. At anytime during this eleven and half years you would have thought this research and discussion would have obtained an audience. I can tell you that it certainly has. And the bureaucracy has engaged me at every opportunity that they could. The highlights were on three occasions where they hired three other groups in attempts to steal the Intellectual Property that makes up either the Preliminary Specification or earlier work. This was, in my opinion, so that they could lay claim to it and shut it down, not to use it for its appropriate purpose of building something constructive.

It has been throughout this past decade that there has been a theme in all of my writing. That is that all economic growth can be attributed to enhanced organization through specialization and the division of labor. Our society today requires software to define and support any enhanced version of specialization and division of labor. People, Ideas & Objects software and our software development capabilities are therefore critical capabilities of the oil and gas industries future growth. Some of these attributes were discovered in the Preliminary Research Report and published in May 2004. The bureaucracy have twisted this to their benefit by never acting to change their systems, therefore their franchise will never be challenged. Understanding that economic benefits were at stake their franchise was more important. This was in addition to the value that was available from the decentralized production model in the last five years from low natural gas prices. The bureaucracy therefore can not be trusted. They have refused to deal with me and therefore have proven unable and unwilling to use these tools to the betterment of society. Now with losses growing in a material way its time for change and I am unwilling to work with them.

Did Steve Jobs need the assistance of the record store managers in the development of iTunes? He offered a clear alternative without the legacy constraints of the past. I don't want to compromise with the bureaucracy on their legacy needs and losing ways. We offer a viable alternative with the Preliminary Specification, our software development capability, our user community and service providers. This is a remove and replace strategy based on the greater force of economic change, creative destruction. The bureaucracy have begun their role in this process, its time the investors find the will to step up and direct the payments be made to us to begin these developments and for us to begin our work.

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

Our Focus

We enter 2015 as the beginning of our second full year of user community developments. These developments are the primary focus at People, Ideas & Objects. Being user community based software developments is the only software that is useful and worthwhile, in my opinion. There is too much that the user is involved in that is not captured in most ERP systems that render them ineffective in today’s environment. I think that software in the future will be much different. If it is not crafted by the user for the user, it will not be used. Therefore we have set about making our priority the developments of our user community. A step that in most ERP integrations is skipped due to the time and costs of having the user involved in the developments, and is therefore the first thing that is cut. People, Ideas & Objects however have the time and have made the budget commitments to their development.

The scope and scale of the Preliminary Specification involves the entire oil and gas industry. Within this specification there are thousands of individual jobs that take months to learn. This learning is based on years of experience, education, knowledge and understanding. Turning to our software developers they will be very good but to assimilate that knowledge and understanding without access to the people that make up those thousands of positions. Garbage in, garbage out. That is why we have budgeted 2,000 man years of user community time in determining what is required to make the Preliminary Specification exactly what you need. We expect to access this information from a population of approximately 3,000 users. None of this is permanent full time work for any of the users, however there are significant opportunities for users in the People, Ideas & Objects environment.

Specifically user community participants are those that we look too to form the service provider firms that will manage the administrative and accounting processes on behalf of the oil and gas producers. In the decentralized production model all the administrative and accounting resources of the producer are stripped out and reorganized into service providers who are focused on one process and bill the individual Joint Operating Committees for their services. It will be these service providers that will replace the G&A expenses that are currently incurred by the oil and gas producers. Creating a revenue stream for the service providers in the range of $40 to 60 billion for the North American marketplace. A significant business opportunity for the user community participant. The ability of the service provider / user community participant to then have changes to the process that they manage can be easily accommodated through the software development capability provided by People, Ideas & Objects. Providing a constantly improving process based on improved specialization and division of labor efficiency, changes to the underlying business model, or other necessary business changes to the software. Providing the oil and gas producer with the most profitable means of oil and gas operations.

It is the user community participant that is the source of the quality of our software offering and the services that are provided. We are all focused on providing the producer firm with the most profitable means of oil and gas operations as our key competitive advantage. A stark contrast to the current regimes chronic losses and self interested, self dealing. If this business opportunity is of interest to you then you should read our user community vision and follow the processes that are provided there.

Information Technology is disintermediating all industries. We are the oil and gas solution. The bureaucracy will be around for a while longer and will provide its own opportunities. If your comfortable there and you have plans to retire, or technology is not your cup of tea, then we might be the wrong choice for you. In fact I know we will. We expect that our users will all have high levels of Information Technology education that includes up to five or six university level course in Java and Relational Databases. If you don't have those, now is the time to register as there is plenty of time to get these behind you. You'll need them no matter what you do in the future. Its just becoming a different world in which to work.

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

Where we Stand Today

We're heading into the Christmas season and a new year will be upon us soon. Its time to look back on 2014 and see what it is that we have accomplished, where it is that we are headed and what our plans are for 2015. Final editing of the Preliminary Specification was completed on December 20, 2013 so it is timely to say happy first birthday to our completed product. We started first thing in January of 2014 to begin the development of our user community. Therefore it is reasonable to state that we have now completed the first year of our three year plan to put the user community in place for the development of the Preliminary Specification. People, Ideas & Objects are committed to user based software developments. This commitment should be starting to show.

With respect to the development of the user community we were able to specify and publish our development budget. Although the budget details a range of what our costs will be. It has been determined that we will only commence developments with the full budget of $4 billion in place. It terms of the character of the user community we were able to determine a variety of specific positions within our leadership team. These positions number upwards of thirty and we have been actively recruiting for these positions throughout the year. Stay tuned for more information on these. If you have an interest in any of these positions please contact me through any of the contact information below. We have also seen a number of people that are interested in participating in the user community begin to make their presence known. These people do not have the desire to be part of the leadership team, however are interested in the work that we are doing and / or are interested in the work of the service providers. Lastly we were able to publish a user community vision that identifies the reason that this user community is not what has typically been a software development user community. And we will continue to build on these developments throughout 2015.

These efforts have to be undertaken and would be our priority even if we had the development resources in place. Our approach is different and therefore we have to educate the market to this difference. Therefore we are already incurring time and energy in efforts that would need to be incurred during our development. And as a result we are not wasting anytime as long as we stay focused and committed to our primary objective of developing the user community. It is important to note that we are not constrained in the development of our software deliverables by physics or anything tangible. It is the development of the user community and the ideas that will be generated within that domain that are our primary constraint. The abilities and capabilities of the user community are the constraints that we must live within. And those constraints are limited in the physical world by the speed of electrons. Therefore the need to start this work now is critical to the success of our entire initiative. Since we are working on that, it is therefore reasonable to state that we are in development.

People, Ideas & Objects have become very lucky as our decentralized production model has driven our value proposition into the stratosphere. And that was before Opec stepped in. I’ll be recalculating our value proposition in the new year but its probably safe to just start saying that its valued in the trillions. The downside of this is its just one issue. We provide so much more value for the dynamic, innovative and profitable oil and gas producer beyond just enabling them to be price makers. On top of all that the Preliminary Specification does do. We enable them to become organizationally flexible to address the future issues that will need to be addressed in similar ways through organizational changes in either the industry, producer or Joint Operating Committee. Something that they will be able to address through participation in the user community and its vision.

As we have discussed we'll be looking in early 2015 to the possibility that we can get some attention in terms of our solution in the marketplace. Attention that could enable our budget to be funded by the investors in the oil and gas industry directing their producer firms to fund our budget. This is an opportunity as the short, medium and long term commodity prices look terrible in North America and the bureaucrats think they are in the catbird seat. We need to at least get the attention of these investors to let them know that there are alternatives to the bureaucrats and they don't necessarily have to take the continued losses that they provide. This opportunity might provide us with the ability to reduce our development time by one year. Therefore it is something that we will make a reasonable attempt at. Otherwise we are sticking with our plan of developing the user community up to January 2017. At which time expect that the user community leadership team will be able to prove to the investors that we offer a viable alternative to the existing bureaucracy and our budget can be funded at that time.

In an earlier posting I noted that I would be taking six weeks off returning January 12, 2015. 2014 was a very good year for us. I think 2015 will be even better, so we'll see you then.

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

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