An excellent resource that is a must read.
Technorati Tags: Innovation, Research, Langlois, Development
OUR PRELIMINARY SPECIFICATION MAKES SHALE COMMERCIAL. THROUGH AN INNOVATIVE BUSINESS MODEL SUPPORTING THE JOINT OPERATING COMMITTEE, WE PROVIDE OIL AND GAS ASSETS WITH THE MOST PROFITABLE MEANS OF OIL AND GAS OPERATIONS, EVERYWHERE AND ALWAYS. ENABLING THEM TO ACHIEVE ACCOUNTABLE AND PROFITABLE NORTH AMERICAN ENERGY INDEPENDENCE. OIL AND GAS’ VALUE PROPOSITION IS AT A MINIMUM, LEVERAGED TO THE POINT OF 10,000 MAN HOURS PER BOE. WE KNOW WE CAN, AND WE KNOW HOW TO MAKE MONEY IN THIS BUSINESS.
Posted by Paul Cox at 7:36 AM 0 comments
Labels: Capabilities, development, Governance, Innovation, Langlois, Research
1) "Contains the fixed costs of establishing and maintaining a system of property rights."Including the basic laws of the land, and the Alberta Governments royalty and mineral rights development laws and regulations, Petroleum Accountants Society of Canada, Canadian Association of Petroleum Landman, Public Petroleum Data Model and other standards bodies. The point in this categorization is to determine what the real fixed costs of establishing and maintaining the standards of operations of oil and gas are in Alberta and Canada. Needless to say many of these organizations are representative of larger global groups that have influence through out the global oil and gas industry.
2) "Contains costs that are paid periodically. These depend on time, but not on number or volume of transactions."Langlois interestingly takes this categorization and classifies items like salaries of police, costs that are a function of time, in application to oil and gas, this would include the SEC, FASB, Auditors, Engineering appraisals and other compliance costs to regulations as the variable or time dependent costs of establishing and maintaining property rights in the oil and gas industry.
3) "Contains all the costs that come with the number of transactions or volumes of transfers."The last grouping of costs Langlois sets out is the definitive variable costs of production. Based on the level of activity is the criterion that establishes the volume of costs and what Lanlois describes as "Neo-Classical T-Costs." These would include the royalties actually paid, the investment dollars spent, the costs associated with the revenue from the production of oil and gas.
"The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. ...The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information passed on and passed on only to those concerned. It is more that a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more that is reflected in the price movement." (Hayek 1945, pp. 526 - 527)The architecture of the industry is what I have asserted is broken. Represented by the hierarchy, the oil and gas industry has been able to establish the appropriate standards and therefore maintain the property rights that are so critical to the development of the oil and gas industry. What is now redundant is the level of capability that is built up within each of the producers. Hierarchies have focused on their own needs and capabilities within the firm itself. Building extensive capacities to accommodate all of the needs that are associated with the category 1) 2) and 3) cost. What is needed is to conduct the analysis on the standards such that the efficient point of each transaction becomes the point of transfer. The tools to use are contained within these two documents of Langlois, Baldwin and Clark. This in a nutshell is the purpose and desired outcome of the development of the Genesys application. A reorganization, and a re-architecture of the oil and gas industry on a global basis.
"Indeed, as the field of object-oriented programming has taught us, these hidden design parameters generally must not be communicated to others. This is the principle of encapsulation and information hiding. To allow another module knowledge of an access to one's inner workings is to invite those other modules to tinker - and thus to invite butterfly effects.""The secret life"
"With a larger extent of the market, and in the absence of any other kind of transaction costs, it starts to pay not only to subdivide tasks further but also to turn more transfers into transactions." pp. 26And provides a necessary caution;
"But this is not the same thing as saying that we should observe vertical disintegration in a growing industry. Growth takes place in disequilibrium. And disequilibrium can lead to dynamic transaction costs, especially when the increase in the extent of the market calls for a systemic reorganization of the task-and-transfer system." pp. 27As time passes, the volume of transactions increase, and the volume of dynamic transaction cost decrease. This makes inherent sense in that the ability to build an industry would require more transfers to mitigate the costs of un-standardized transaction costs. However, after time the reverse becomes the norm in that "thick markets will increasingly come to supplant management as a mechanism for buffering uncertainty". pp. 30 This phenomenon is what Langlois has called "The Vanishing Hand".
Posted by Paul Cox at 6:34 PM 0 comments
Labels: Capabilities, development, Governance, Langlois, Research, strategy
First, yes I want an iPhone as soon as possible. The networking and Mac OS / X underpinnings will make the "tool" usable by everyone and anyone.
Secondly, yes I will develop unique applications that employ the iPhone in the many ways the oil and gas users will want. Using Cascading Style Sheets, Ajax and JavaScript limit the scope of the applications that can run on the iPhone to ones imagination.
And thirdly, yes, I want to reiterate a concern that I mentioned last summer. As with any new technology the security and access privelages are becoming much more difficult to have under even reasonable control. My concern about wifi enabled pod slurping can and will be one of the greater risks to corporate security.
Technorati Tags: Security, Software, Innovation
Photo Courtesy of Apple.
Posted by Paul Cox at 4:04 PM 0 comments
Labels: Innovation, security, software
"Where do organizations come from? A network design perspective of the theory of the firm."The article discusses transactions and transfers of value in the business setting. A rather boring topic however, I think this article is of value in defining a tool for a company such as Genesys, with the means to analyze and develop new divisions of labor in oil and gas.
"...objects that are transacted must be standardized and counted to the mutual satisfaction of the parties involved. Also in a transaction, there must be valuation on both sides and a backward, compensatory transfer - consideration paid by the buyer to the seller. Each of these activities - standardizing, counting, valuing, compensating - adds a new set of task and transfers to the overall task and transfer network. Thus it is costly to convert even the simplest transfer into a transaction."The authors provide us with an appropriate definition. I would also assert the makeup and origin of these transactions might change due to the available information technologies. Oil and gas will have new more efficient means and methods to conduct transactions, and that is where the focus and value of this blog’s concepts are concerned. Does it make sense that a "Production Accountant" focus only on their employer’s production, or would it be more valuable to have the "Production Accountant" work for a variety of Joint Operating Committee's in a specific geographical area? "What would the revised job consist of..." is how we could analyze the changes with this tool.
"The user and Producer need to deploy knowledgeable in their own domains, but each needs only a little knowledge about the other's. If labor is divided between two domains and most task-relevant information hidden with each one, then only a few, relatively simple transfers of material, energy and information need to pass between the domains." pp. 17Using the example of the "Production Accountant" we can now analyze whether the transactions of his / her efforts should be conducted at the simplest point. This is because the transactions that are involved are standardized, counted, valued and compensated on the basis of (here in Canada) the EUB, the Accounting and Operating Procedures as defined and agreed to by the Joint Operating Committee.
"Placing a transaction - a shared definition, a means of counting, and a means of payment - at the completed transfer point allows the decentralized magic of the price system to go to work." pp.22Intuitively Langlois was correct in his assertion that the decentralized production methods were more efficient then the high throughput production methods the industry is configured around. Therefore this last quotation provides a very detailed tool to determine the division of labor of the "revised" oil and gas industries. From this process the authors note:
"The most significant fact about this system, is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on..." Frederick Hayek (1945)The authors provide another definition and concept:
"Encapsulated Network in a larger system of production is to facilitate complex transfers without making all of them transactions". pp 28Which to my mind shows where the real value in this entire process is not only would the encapsulated network achieve the greatest efficiencies in the transfer and transaction. It would enable the participants to focus on their unique competitive advantages. I have suggested in previous postings and the research documents that the oil and gas industries competitive advantages lie in the oil and gas leases in which they own. The ability to find, develop and produce those reserves are the critical activity that the company is evaluated on. The producer should consider these assets and skills as the key point of where their competitive advantages are. The direct employment of production accountants within each company does not provide any value to the producer.
Posted by Paul Cox at 7:46 AM 0 comments
Labels: Capabilities, Governance, Innovation, Langlois, Research
Posted by Paul Cox at 10:00 AM 0 comments
Labels: Capabilities, Governance, Langlois, Research
"In a world of decentralized production, most costs are variable costs; so, when variations or interruptions in product flow interfere with output, costs decline more or less in line with revenues. But when high-throughput production is accomplished by means of high-fixed-cost machinery and organization, variations and interruptions leave significant overheads uncovered." pp.58
"Economic growth occurs at the hands of entrepreneurs, who bring into the system knowledge that is quantitatively new - knowledge not contained in the existing economic configuration." pp.27.
Posted by Paul Cox at 1:15 PM 0 comments
Labels: Call to action, Capabilities, development, Governance, Langlois, Research, strategy
Posted by Paul Cox at 7:32 AM 0 comments
Labels: Call to action, Capabilities, Governance, Langlois, Military Command, Research
New Idea Engineering publish a monthly newsletter that discusses the difficult topic of enterprise search and security. They have recently published a series of articles under the heading "Enterprise Search: Mapping Security Requirements to Enterprise Search." The three articles are available here, here and here.
In terms of the technology used in this application, I have stated the architecture that will be used here. Two major additions being added to the Genesys architecture are;
Posted by Paul Cox at 10:33 AM 0 comments
Labels: cluster, development, Search, security, software, strategy
During December of 2006 I added the books that I have found of interest and feel provide some value to the readers who may share my passion for this topic. Another area that I think I will add some value for the reader is a listing and my justification for readers to go out and secure documents that are published in a variety of journals.
There are three authors that provide the stimulation for many of the ideas here. They are Dr. Paul Romer at Stanford, Dr. Giovanni Dosi at the Sant'Anna School of Advanced Studies and Dr. Carlota Perez who is a guest researcher at Cambridge University. These three have formed a topic that is of much interest to me and I would like to point out the individual documents that are currently being research by myself.
In the past I would post many of their thoughts and ideas, however, I believe that to be a violation of their Copyright. I therefore will only point them out and suggest that many of the documents are hard to source and in most cases, require access to the major academic database services.
So for this first installment I want to highlight three documents that combine to form a series of discussions about the changes that are happening in the business and technical worlds. They reflect the changes will be some of the most radical that we have faced in many years and will be difficult for people and organizations to adapt. Much of the writing notes a transition to a different time where the fundamental basis of the economy has changed. We are in this period now and it seems timely to review these three documents.
Posted by Paul Cox at 8:36 AM 2 comments
It seems somewhat appropriate at the beginning of the new year to discuss what might be a good measurement of innovation in oil and gas. What criteria can an oil and gas company use to determine their level of innovation year over year, and in comparison to other producers. To me innovations purpose is to enhance the productivity of the oil and gas worker. Therefore, understanding there are reasonable exceptions, I would propose we use annual revenue per employee.
I have seen companies that have been able to achieve high metrics in terms of their productive capacity per employee. Mapped over a period of many years, revenue per employee would reflect on the producers ability to secure land, find commercial reserves and produce them profitably. Reflecting on the entire history of the facilities and fields the company owns and operates. Comments?
Technorati Tags: Innovation, Measurement, Strategy
Posted by Paul Cox at 9:15 AM 0 comments
Labels: Innovation, measurement, strategy
Posted by Paul Cox at 6:40 AM 0 comments
It was December 29 last year that I started writing this blog. It was at the prompting from a friend that I write about the things that I was researching. Write about the things I was passionate about, to write about innovation in the oil and gas industry. I thank him for pointing out this opportunity to me. I started this blog with several specific objectives in mind;
Posted by Paul Cox at 2:26 PM 0 comments
Labels: Innovation, Massachusetts Enertech Cluster, Proposal, summary
Dr. Charles M. Vest provides an interesting discussion regarding the teaching and developmental challenges that the engineering disciplines will go through in the next 14 years.
At around the 35 minute point, Dr. Vest states their is a parallel to the current issues the energy industry faces, with the issues the auto industry faced in the 1970's. An interesting and accurate analogy.
During the Q and A Dr. Vest makes the point that at a diner with Secretary Rice, regarding the changes at the State Department, Newt Gingrich made it very clear, we have something that was built for a different era, that science and technology in industry have to re-organize to meet the challenges of today.
Technorati Tags: MIT-Video, MIT, Engineering, Innovation
Posted by Paul Cox at 9:33 PM 0 comments
Labels: Engineering, Innovation, Massachusetts Enertech Cluster, MIT, Video
Dr. Robert Metcalfe is a major force in the technology world. He is the inventor of Ethernet which is the basic underlying infrastructure of the Internet. Based on Ethernet, Metcalfe founded 3Com which was an integral part of the building of the Internet. A man of great ideas, and a man who has the ability to make those ideas operate in the real world.
Dr. Metcalfe has been affiliated with MIT through out the years, and works with Polaris Partnerships, a venture capital firm he owns, and has recently guest blogged on VCMike's Blog, a silicon valley early stage venture capitalist. Click on the title of this entry to review Metcalfe's ideas.
Metcalfe's ideas are that the greater Boston area holds 10 first class research universities and over 100 universities in total. This is the place that he proposes to house the "Massachusetts Enertech Cluster"(MEC). He proposes the MEC to be modeled on the Silicon Valley Cluster, the area of MEC's focus will be on innovation in oil and gas, and I can not agree with him more.
Metcalfe's interest from a venture capital perspective are listed in this blog entry and include: Ember, Scicortex, and Greenfuel.
"Ember is a networking company that delivers tiny radio semiconductors and protocol software. Ember’s aim is to network all the world’s embedded micro-controllers, of which, according to IDC (another Massachusetts company) there will be 10 billion new ones shipped next year. Ember’s go-to-market focus is home and building control. And what do you think the principal benefits of home and building control are? By wirelessly controlling lights, heating, ventilation, and air conditioning, many of Ember’s early customers are conserving energy. By wirelessly reading meters, many of Ember’s early customers better measure the energy they are saving"
"SiCortex is a computer systems company, so why is it an example of Massachusetts enertech? First, SiCortex has just launched open-source software Linux superclusters that improve by factors of 10 delivered computational performance per dollar, per foot, and, yes, per watt. Because they each consume two factors of 10 fewer watts than the PC microprocessors on our desks, SiCortex fits six 64-bit microprocessors on a chip and therefore 5,832 in a single cabinet, cooled by air, saving energy on running the computers and even more on cooling them. That’s enertech. And second, SiCortex is enertech because its superclusters are designed for high-performance computing applications, prominent among which are seismic data analysis for oil exploration, climate modeling, fluid dynamics, reactor simulations, quantum chromo dynamics — enertech. No wonder the lead in SiCortex’s recent $21M venture financing was Chevron."
"GreenFuel is now working with huge electric power plants in the Arizona desert to scale up its enertech. GreenFuel pipes CO2-laden flue gases through algae slurries circulating in solar bioreactors. GreenFuel algae use photosynthesis in enertech greenhouses to remove greenhouse gases (CO2 and NOx) from the flue gases before release into the atmosphere. And then, get this, the rapidly thickening algal slurry is harvested several times per day to produce lipids, starches, and proteins for extraction into substantial quantities of, respectively, biodiesel, ethanol, and feed. GreenFuel algae-solar bioreactors do require acreage, water, and electricity, but junk land, dirty water, and single-digit percentages of parasitic power. GreenFuel treats CO2 as a valuable plant food and, rather than try to sequester it expensively, GreenFuel recycles CO2, cleaning the atmosphere while producing cheap and clean energy"Out of these I would particularly like to point out the business of Ember. Building the network for all the worlds embedded network microcontrollers. Metcalfe defines the market as being 10 billion devices that will be shipped in 2007. IPv6 will provide the unique addressing of each of these devices, wirelessly. This is exactly the reason why IPv6 and WiMax reside in my Technical Vision.
Posted by Paul Cox at 3:17 PM 0 comments
Labels: cluster, Innovation, Massachusetts Enertech Cluster, Metcalfe, MIT
John Hagel III has written a fascinating series of articles on what is being called the "Attention Economy". His comments are located here, here and here. I highly recommend my readers to view these articles thoroughly. Hagel picks up from the quotation of Professor Herbert Simon, Nobel Laureates quote,
"...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of the information sources that might consume it."I think that Hagel is picking up where Simon's comment left off and introduces some current research that Michael Goldhaber is doing in this area. Goldhaber's best articles are here, here and here. Attention is not a commodity, in that it is fixed and Hagel discusses both the scope of your own attention and the attention that ideas can garner and sustain. I wanted to comment on the important impact of this thinking and relate the significance of what I think is being said.
Posted by Paul Cox at 11:30 AM 0 comments
Labels: Attention Economy, Brown, Genesys, Hagel, Research, strategy, summary, Sun
104 Titles of some of the best books that I found.
The Strategy of Conflict
Thomas C. Schelling
Classical and nonclassical logics : an introduction to the mathematics of propositions
Schechter, Eric, 1950-
Winning at collaboration commerce : the next competitive advantage
Collins, Heidi.; Gordon, Cindy.; Terra, Jose Claudio Cyrineu.
August 23, 2005
Computational Economics
David A. Kendrick, P. Ruben Mercado, Hans M. Amman
December 15, 2005
The Constitution of Society: Outline of the Theory of Structuration
Anthony Giddens
January 11, 1986
Execution: The Discipline of Getting Things Done
Larry Bossidy, Ram Charan, Charles Burck
June 15, 2002
Extreme Competition: Innovation And the Great 21st Century Business Reformation
Peter Fingar
January 31, 2006
The fast forward MBA in project management
Verzuh, Eric.
Freakonomics : a rogue economist explores the hidden side of everything
Levitt, Steven D.; Dubner, Stephen J.
The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life
Thomas W. Malone
April 2, 2004
Genome
Matt Ridley
October 3, 2000
Happy Lives and the Highest Good : An Essay on Aristotle's "Nicomachean Ethics"
Gabriel Richardson Lear
January 5, 2004
Human accomplishment : the pursuit of excellence in the arts and sciences, 800 BC to 1950
Murray, Charles A.
Ideas Have Consequences
Richard M. Weaver
September 15, 1984
Income Distribution in Macroeconomic Models
Giuseppe Bertola, Reto Foellmi, Josef Zweimuller
December 1, 2005
Innovation, Organization and Economic Dynamics: Selected Essays
Giovanni Dosi
September 23, 2001
It's About Time : Understanding Einstein's Relativity
N. David Mermin
November 1, 2005
The Java programming language
Arnold, Ken, 1958-; Gosling, James.; Holmes, David (David Colin)
Java: An Eventful Approach
Kim Bruce, Andrea Danyluk, Thomas Murtagh
July 29, 2005
Leading with questions : how leaders find the right solutions by knowing what to ask
Marquardt, Michael J.
Learning the bash Shell
Newham, Cameron.; Rosenblatt, Bill.
Lecture Notes in Microeconomic Theory : The Economic Agent
Ariel Rubinstein
December 16, 2005
Max Plus at work : modeling and analysis of synchronized systems : a course on Max-Plus algebra and its applications
Heidergott, Bernd.; Olsder, Geert Jan.; Woude, J. W. van der.
On Adam Smith's Wealth of nations : a philosophical companion
Fleischacker, Samuel.
The only sustainable edge : why business strategy depends on productive friction and dynamic specialization
Hagel, John.; Brown, John Seely.
Philosophy as a Humanistic Discipline
Bernard Williams, A. W. Moore
January 2, 2006
Politics and Vision : Continuity and Innovation in Western Political Thought
Sheldon S. Wolin
May 3, 2004
The Politics of Good Intentions : History, Fear and Hypocrisy in the New World Order
David Runciman
May 5, 2006
Producing security : multinational corporations, globalization, and the changing calculus of conflict
Brooks, Stephen G., 1971-
Radical evolution : the promise and peril of enhancing our minds, our bodies--and what it means to be human
Garreau, Joel.
The Singularity Is Near : When Humans Transcend Biology
Ray Kurzweil
September 22, 2005
The State of Democratic Theory
Ian Shapiro
August 18, 2003
The Strategy of Conflict
Thomas C. Schelling
June 26, 2003
The Success of Open Source
Steve Weber
Swarm creativity : competitive advantage through collaborative innovation networks
Gloor, Peter A. (Peter Andreas), 1961-
The Theory of Corporate Finance
Jean Tirole
December 15, 2005
Understanding institutional diversity
Ostrom, Elinor.
The West's last chance : will we win the clash of civilizations?
Blankley, Tony.
Wicked cool Java : code bits, open-source libraries, and project ideas
Eubanks, Brian D.
Winning at collaboration commerce : the next competitive advantage
Collins, Heidi.; Gordon, Cindy.; Terra, Jos©♭ Cl©Łudio Cyrineu.
Winning the Knowledge Transfer Race
Michael J. English, William H. Baker
October 25, 2005
The World Is Flat: A Brief History of the Twenty-first Century
Thomas L. Friedman
April 5, 2005
Infrastructure: A Field Guide to the Industrial Landscape
Brian Hayes
September 26, 2005
It's Not What You Say...It's What You Do: How Following Through at Every Level Can Make or Break Your Company
Laurence Houghton, Laurence Haughton
December 28, 2004
Knowledge Accumulation and Industry Evolution : The Case of Pharma-Biotech
Mariana Mazzucato, Giovanni Dosi
March 9, 2006
The Nature and Dynamics of Organizational Capabilities
Giovanni Dosi, Richard R. Nelson, Sidney G. Winter
January 15, 2001
Technology, Organization, and Competitiveness : Perspectives on Industrial and Corporate Change
Giovanni Dosi, David J. Teece, Josef Chytry
May 21, 1998
Technology and Enterprise in Historical Perspective
Giovanni Dosi, Renato Giannetti, Pier Angelo Toninelli
August 1, 1992
The Economics of Technical Change and International Trade
Giovanni Dosi, Keith Pavitt, Luc Soete
March 23, 1991
Technical Change and Economic Theory (Ifias Research Series, Number 6)
Giovanni Dosi
October 23, 1990
Technical Change and Industrial Transformation
Giovanni Dosi
August 23, 1984
Technical change and survival: Europe's semiconductor industry (Industrial adjustment and policy)
Giovanni Dosi
February 23, 1981
Sisomo: The Future on Screen
Kevin Roberts
November 15, 2005
An Army of Davids : How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths
Glenn Reynolds
March 7, 2006
The Prepared Mind of a Leader : Eight Skills Leaders Use to Innovate, Make Decisions, and Solve Problems
Bill Welter, Jean Egmon
October 24, 2005
License to Harass : Law, Hierarchy, and Offensive Public Speech (The Cultural Lives of Law)
Laura Beth Nielsen
August 30, 2004
Plato's Fable : On the Mortal Condition in Shadowy Times (New Forum Books)
Joshua Mitchell
March 3, 2006
China the Balance Sheet: What the World Needs to Know about the Emerging Superpower
Institute for International Economics, Center for Strategic & International Stu
April 10, 2006
A Machine to Make a Future : Biotech Chronicles
Paul Rabinow, Talia Dan-Cohen
April 7, 2006
Dynamic Models in Biology
Stephen P. Ellner, John Guckenheimer
March 31, 2006
Information Science
David G. Luenberger
February 15, 2006
Information Revolution : Using the Information Evolution Model to Grow Your Business
Jim Davis, Gloria E. Miller, Allan Russell
January 9, 2006
Managing in the Next Society
Peter F. Drucker
July 24, 2002
The Long Tail : Why the Future of Business Is Selling Less of More
Chris Anderson
July 11, 2006
A New Kind of Science
Stephen Wolfram
May 14, 2002
The Second Cycle: Winning the War Against Bureaucracy
Lars Kolind
April 24, 2006
Competing on the Edge : Strategy as Structured Chaos
Shona L. Brown, Kathleen M. Eisenhardt
April 15, 1998
The Innovation Killer: How What We Know Limits What We Can Imagine... And What Smart Companies Are Doing About It
Cynthia Barton Rabe
June 30, 2006
A Whole New Mind: Moving from the Information Age to the Conceptual Age
Daniel H. Pink
March 24, 2005
Schumpeter on the Economics of Innovation And the Development of Capitalism
Arnold Heertje, Jan Middendorp
March 24, 2006
Infrastructure: A Field Guide to the Industrial Landscape
Brian Hayes
September 18, 2006
Choice and Consequence
Thomas C. Schelling
April 4, 2006
Micromotives and Macrobehavior (Fels Lectures on Public Policy Analysis)
Thomas C. Schelling
October 23, 1978
Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
Carlota Perez
April 23, 2003
Innovation, Organization and Economic Dynamics: Selected Essays
Giovanni Dosi
September 23, 2001
Evolutionary Economics and Creative Destruction (Graz Schumpeter Lectures, 1)
J. Metcalfe
January 28, 1998
Knowledge, Institutions and Evolution in Economics (The Graz Schumpeter Lectures)
Brian Loasby
September 23, 2002
Schumpeter and the Endogeneity of Technology : Some American Perspectives
N. Rosenberg
June 23, 2000
Joseph Alois Schumpeter
Wolfgang F. Stolper
August 8, 1994
Democracy, Education, and Equality: Graz-Schumpeter Lectures (Econometric Society Monographs)
John E. Roemer
January 9, 2006
Invisible Engines: How Software Platforms Drive Innovation and Transform Industries
David S. Evans, Andrei Hagiu, Richard Schmalensee
October 1, 2006
Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy
Matthew R. Simmons
June 10, 2005
iWoz: From Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It
Steve Wozniak, Gina Smith
September 25, 2006
Mavericks at Work: Why the Most Original Minds in Business Win
William C. Taylor, Polly G. LaBarre
October 2, 2006
America Alone: The End of the World as We Know It
Mark Steyn
September 16, 2006
Power, Speed, and Form: Engineers and the Making of the Twentieth Century
David P. Billington, David P. Billington Jr.
October 2, 2006
Painting outside the Lines: Patterns of Creativity in Modern Art
David W. Galenson
January 18, 2002
Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity
David W. Galenson
December 27, 2005
Capitalism and Freedom: Fortieth Anniversary Edition
Milton Friedman
November 15, 2002
The Road to Serfdom Fiftieth Anniversary Edition
F. A. Hayek, Milton Friedman
October 15, 1994
The Constitution of Liberty
F. A. Hayek
October 15, 1978
Law, Legislation and Liberty, Volume 1: Rules and Order
F. A. Hayek
February 15, 1978
Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice
F. A. Hayek
October 15, 1978
Law, Legislation and Liberty, Volume 3: The Political Order of a Free People
F. A. Hayek
March 15, 1981
Individualism and Economic Order
F. A. Hayek
June 1, 1996
Capitalism and Freedom: Fortieth Anniversary Edition
Milton Friedman
November 15, 2002
Free to Choose: A Personal Statement
Milton Friedman, Rose Friedman
November 18, 1990
A New Kind of Science
Stephen Wolfram
May 14, 2002
The Emotion Machine: Commonsense Thinking, Artificial Intelligence, and the Future of the Human Mind
Marvin Minsky
November 7, 2006
Organizations,
James G. March
June 5, 1958
Lectures on Economic Growth
Robert E., Jr. Lucas
February 15, 2002
The Attention Economy : Understanding the New Currency of Business
Thomas H. Davenport, John C. Beck
June 6, 2001
Change or Die: How to Transform Your Organization from the Inside Out
M. David Dealy, Andrew R. Thomas
November 30, 2005
Technorati Tags: Books,, Innovation
Posted by Paul Cox at 10:57 PM 0 comments
I enjoyed writing what I have called the final research report, it tops out at a little over 23,000 words and is the culmination of many of the ideas and issues regarding the oil and gas industry. One thing that I have learned, and enjoy about the skill of writing, is that generally the author does not know what he / she is writing about until such time as the work is completed in their mind, and they sit down and read it from cover to cover, literally for the first time.
I have experienced this phenomenon before in my writing. I thoroughly enjoy the final reading as there is some almost secret point that has been hidden deep in the subconscious that is being said in the words. I know I will be the first to see what that is, and it will be I who will be the most excited to discover it. This proposal did not disappoint.
The idea that came to the forefront is the copyright itself, and specifically, its application in what would be considered a unique way. The copyright has become a major sticking point with the industry and is deemed by myself to be of extremely high value. The point about ideas is that good ideas take an immense amount of intellectual effort to complete. The copyright is a monopoly granted to the writer for the lifetime of the writer + 70 years after death.
The point that I understood from my writing about the copyright is this. The copyright is far more valuable to industry then it is to me. My desire to keep it in tact and close care of it is also in the best interests of the industry. Why, for 2 reasons for sure, and their may be more, however, what I've learned in the development and writing of this proposal are these:
Posted by Paul Cox at 8:57 PM 0 comments
Labels: development, Genesys, Pluraltiy, software, summary, writing
This survey is reported by Dr. Nicholas Carr on his Rough Type web log. (Click on the title of this entry to go there.) Noting that large percentages (61%) of companies in North America are on the verge of adopting SaaS (Software as a Service). Their motivation being, and it is a subtle point, that companies are moving closer to Dr. John Hagel lll's idea that industry will need to restructure as either;
An index of the content that was included in the final report and there associated links. If anyone wants a .pdf of the proposal just write to my email address.
Abstract
Executive Summary
A technological vision
Who would Henry Ford hire?
Free like a puppy.
Security Model
Tacit Organizations
Plurality Summary
Joint operating committee revolutionary?
Military Command
Partnership Accounting
Petroleum Lease Marketplace
Human Resource Marketplace.
Calls to Action
A different approach.
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Posted by Paul Cox at 10:50 PM 0 comments
Labels: Call to action, Genesys, Pluraltiy, Proposal, Research
The final component of the proposal has been edited and the document is now complete.
Up until now we have not discussed what "may" be possible as a result of the organizational changes which are caused by a focus on the joint operating committee. Moving to the Joint Operating Committee (JOC) as an organizational model has an air of being too philosophical or intangible and thus there is a need to have some substance added to this concept. The following is how I see the manner in which this type of system will be developed to meet the needs of the oil and gas industry.
The Mineral Lease and associated agreements define and establish the rights and responsibilities regarding the lands and minerals described within the lease document. Looking at the Marketplace concept, these leases are bought, sold, traded, surrendered and pledged as capital in the oil and gas industry. Each lease provides to the holder the rights to those reserves and any associated production facilities. In short, the entire oil and gas industry "market" can be boiled down to these documents. These documents are the point where the industry and / or producer activity begins. The lease "market" in Calgary does not substantially differ from any other oil and gas marketplace in the world. What this proposed development is attempting to display and encourage is the virtual existence of an oil and gas market. Although initially limited in its geographic scope to the province of Alberta, many of the outgrowths of the system will be global in scale, with only immaterial differences in the reference values of the geographical data elements.
Given that the market for oil and gas leases is very large, the critical nature of this system will need to assume a number of variables that do not exist in their current form. If a producer has a lease that is in jeopardy of being surrendered, then the producer could expose the lease within the virtual Marketplace to determine if there is an interested party that may want to partner or purchase the lease and maintain it. Currently the scope of the offers to do business with the producer is limited to the extent of his or her personal network of interested parties. What if the lease was perusable and searchable by the entire market for a willing buyer? This system is designed to provide this environment to the oil and gas producer.
Taking the analogy of an exchange a little further, consider the possibilities of the Petroleum Lease Marketplace in terms of what this can do for a business. Search and discovery mechanisms could be built in as tools that would enable the producer to optimize the opportunities and hence the value of the lease. Data involving the prospective operation would be codified in the marketplace and the transaction processing would be an enabling capability and an inherent justification of the marketplace. This marketplace would then provide the means to collaborate on the methods of operation around the newly formed partnership. Where a Farmout / in, Joint Venture, Pooling or Construction Ownership & Operatorship agreement is facilitated in codifying the partnership based on the Petroleum Lease Marketplace Module. Adding secondary agreements (Novation, Area of Mutual Interests), Accounting & Operating Procedures as they are formed, agreed to, and counter part executed by the users of the Petroleum Lease Marketplace. This Marketplace will be the beginning of the industries commercial activity, establishing a base of software operations that would provide the producer with A.F.E., budget and operational programs. This system, ultimately, would be designed to facilitate the processing of capital and operating expenditures, revenues and royalties, based on the partnerships of producers needs and wants. This is the system that is being captured and codified in the Petroleum Lease Marketplace.
I have documented elsewhere the unique nature of partnership accounting for oil and gas. The business dynamics of each producer are so fundamentally different in terms of financial metrics and motivations. I have also described how the Partnership Accounting system mirrors the organizations needs. If two groups are partners and one owns the midstream assets that it in turn rents to provide access to these facilities to the other partners, the criteria for measuring and comparing results are different from producer to producer but the data is the same, only perceived differently. This is one of the fundamental aspects of Relational theory and is a tacit underlying theme in Java. Critical to the understanding of this system is that the metrics of each producer in a property are different and are directly related to each producer’s strategy and organizational capability. The difficulty in the partnership knowing the specifics of each producer’s motivations are unknown and not relevant to each of the other producers. The common interest that drives each producer is in harmony, as they are all driven financially to succeed. There is no conflict of interest because the motivation is consistent throughout the marketplace irrespective of the competing strategies employed by the different partners. And these unique features are relevant and evident to each producer in this system.
The Alberta Petroleum Lease Market.
The PLM is a database of the Petroleum & Natural Gas Leases for the land governed by the state, province or lessor. The lease, or concession, entitles the holder to the mineral rights and is the start of the process of exploring and drilling for oil and gas. This is therefore the natural place to start these software developments.
The lease documents are populated into the database to represent the mineral rights for the region. The population contained within the database would be those that are under lease, being posted, auctions and prospective lands. The level of detail of information queried and available by an authorized user is recorded and controlled by the system. The ability to then buy, sell trade or surrender these leases would be possible through a variety of transactions managed by the system. Or, in other words, a Marketplace is formed with its own community.
From here the derivative works of the Farm-in, Farm-out, Novation, Joint Operating Agreement and / or Construction Ownership and Operator-ship could be developed through the collaborative environment of the PLM. Additional documentation such as the operating and accounting procedures would be available to be negotiated, documented and counter part executed electronically in this collaborative environment.
The PLM would be a virtual portal that gives the producer, investor or employee access to the Lease, agreements and its associated history. It would literally be the area where people would log in via the Human Resource Marketplace in order to go to work. Having both a Private and Public interfaces to the data elements and functionality, a producer who has an interest in a certain area would be able to engage the owners of any lease of interest, on future business opportunities and from there, pursue subsequent operations extending the operations management, accounting and administration function. The marketplace is a place where the people will go to do business.
Employees and contractors could actively contact producers and investors to offer and provide their services to work as consultants in the day to day activity of the lease, or contract for drilling rigs etc. Adding additional software developments to manage the approval of AFE's, Mail-Ballots, Contracts, Statements of Operations, and Statements of Expenditures and ultimately providing a high level of on-line commerce.
All of these operations are derived through the Joint Operating Committee (JOC). As was mentioned in the preliminary research document the JOC is, the financial, legal, cultural and operational decision making framework of the oil and gas industry. Why not move the accountability for those decisions over to the JOC? This conceptual alignment has received immense tacit support by most of the people who are employed in the oil and gas industry.
The accountability is currently managed by the hierarchy because that is the only logical manner in which an organization could control their assets during the past 100 years. Now with the Information Technologies available for "Collaborative Commerce" (Harvard's term) the hierarchy is not necessary for the purposes of 21st century operation, particularly in oil and gas.
Another key point is the methods by which the energy industry would pay for these transactions. The producers would need to subscribe to the system and pay a nominal fee for each transaction. Or, alternatively an assessment can be made on each producer based on the number of barrels of oil per day it produced. Assessing $1 per barrel of annual production would cost a firm such as Encana to access the system approximately $700,000 per year. I can assure you that no employee or individual would ever have to pay for access to the system. The oil and gas industry revenue is in excess of $2 trillion. The employee's use is almost guaranteed due to the fact that the alternative is to work the prospective 80 hours or more that their jobs would take through the traditional hierarchical methods available today. This is the definition of Web Services and accurately reflects the threat of how things may be developed in the near future. Users are key and their productivity is the focus of their, and the software development, efforts. A capable software developer is critical to achieving these results. This proposal exposes the opportunity for the industry to build this software.
For the sake of clarity, the information within this module appears complex and an attempt to accurately reflect "what" and "how" this operates is my purpose. So, in summary, the PLM is a market to buy, sell, market, trade, assign. novate, post, bid, surrender, a working / royalty interest. Facilitating the electronic capture, management, secure and authorized access to the documentation regarding joint ventures, assignments, novations, sales, AMI's, of working / royalty interests. And establishment of joint operating committees - CAPL, PASC operating and accounting procedures, caveat registration, assignment of committee members, their roles, their responsibilities, delegations of authority, programs budgets, A.F.E.'s, Mail Ballots, Amendments etc.
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It could be argued that the focus of this research is a software product that falls within the classification of vaporware. And it does. However I would put some spin on the classic definition of vaporware and call this a clean slate approach to oil and gas systems. The category that this "product" is in is difficult to define and therefore difficult to build without the express support of the oil and gas industry. This final research report is an attempt at communicating these concepts far and wide within the oil and gas industry in an attempt to find an audience. The strength of the concept of using the Joint Operating Committee requires that every data element, every relationship, and every process be revisited and rewritten. New modules and marketplaces will be built to eliminate the old software classifications.
I am attempting to articulate a vision of what a new approach could do in the systems area. It certainly is vaporware as no group or company has ever approached the joint operating committee as the central organizational focus. How can I, as one individual, do all this work in order to make a viable system exclusively for the producers? The clean slate approach has to be communicated in a way that the system could and should be built in order to accurately describe its features.
I have identified several points that present future difficulties in oil and gas systems. Partnership Accounting, Human Resource Marketplace module, Petroleum Lease Marketplace module and the Genesys Technical Vision are the foundation of this final research report and are unaddressed by the competition. All these aspects of future software systems have to be addressed and neither SAP, Oracle or IBM have a solution or vision that is as compelling as shown in this research report.
To be more specific, the perspective of using the joint operating committee brings new and better ways of managing an oil and gas enterprise. From a systems point of view oil and gas has ignored and avoided the joint operating committee as it conflicts with the underlying purpose of the bureaucracy. Significant contradictions and conflict have crept into the oil and gas producers’ operations that results in the Joint Operating Committee being precluded from the systems used.
This project was originally proposed to the industry in 2004 as an $85 million software development project. The producer must ask itself,: isn't it more appropriate to keep your options open ? What if SAP and Oracle continue with their current offerings; will those be adequate in the future? A future with IPv6 capability? A further question that needs to be asked, and based on the work of John Hagle III and John Seely Brown, is : Are the proposed industry stratifications changing to be reflected as either innovation management, infrastructure management or customer management?
Is there an expectation or belief that the bureaucracy and its use of last century’s technologies can hold a candle to this vision? These technologies and the forces of change in all areas of the economy have to be addressed. Oil prices are up almost 300% will result in the reallocation of financial resources to support innovation. Organizations are constrained in their speed and innovativeness due to the bureaucracy and its refusal to accept the joint operating committee as the explicit form of organization. Constraints in human resources, field capacities and speed to market are real issues that jeopardize the industry.
We have consistently seen successful companies that were able to integrate technology into their strategy and form strong competitive advantages. A company such as HSBC. Homogenization on SAP is not a competitive strategy. I have now counted 12 calls to action from Harvard, Oxford Analytica, MIT, McKinsey, John Hagel III and John Seely Brown, Secretary Bodman, SEC Chairman Christopher Cox and a variety of others. Add to these calls the demands of the consumers. The time to act and put these software developments into play is now.
Ray Lane is a partner at Kleiner, Perkins, Caufield & Byers and a former president of Oracle Corporation. He knows what he is talking about. This entry will take you to a Business Week article that documents many important points. Two of these points I want to discuss in this entry, they are:
"The traditional method of selling big corporate software applications as multi million-dollar packages that take years to implement is broken."
"The 70% of startups out there that are trying to do what the big companies do, only better, faster and cheaper - it's a fools errand. The customers would like to buy that from a large company, so they’re going to lose out." Ray Lane
Surprisingly, perhaps, I think he is right on both counts. The large multi year, multi million dollar packages are the dinosaurs of the software world. Even Petro Canada tried to implement SAP and after $14 million gave up. It’s fallacious to try to retrofit the company to the software.
On the second point of Ray Lane's, stating that the startups will fail, is something that I struggled with at the beginning of this process and something that I think I can also prove is not valid in the oil and gas sector. The two points that I would assert in my defense is that I am the copyright owner of the methods and processes discussed in this research, and in the preliminary report. I published my thesis in May 2004. I have tangible evidence that the state of the art thinking was not as advanced as what I proposed in September 2003, and earned in the publication of the Plurality document.
Back in 2003 I concluded that the software vendors could consume themselves competing with new offerings and no one would have been able to secure a competitive hold in the market. The only manner in which to establish a competitive offering, I felt, was to own the intellectual property as the key competitive advantage. The copyright, and other forms of intellectual property are the only sources of value in this new age.
Secondly, if anyone thinks that a large vendor is going to be able to write the code for the Partnership Accounting, Human Resource Marketplace, Security, Petroleum Lease Marketplace module that I have spoken about in this report I think they would be mistaken in their expectations. What is needed is a clean slate approach and the heavy involvement of potential and future users. The day and age when the software innovations were brought to the industry’s door through the cottage software industry has ceased. The involvement of the industry in its software development needs is mandatory, and become an inherent capability
So on that basis I would agree and disagree with Mr. Lane. Intellectual property is the only method of securing any kind or competitive advantage in this new day and age. Those that attempt to build systems without their differentiation being codified and protected are in my opinion wasting their time. What is required to compete with this software is some fundamentally different basis of organizational structure for the software to define and support just as I have outlined here.
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