Where is IT heading

Apple announced its forth quarter earnings yesterday. I think these earnings show that the demand for IT systems is very strong. Strong growth in all product lines provides a confidence in the recovery of the economy. The global recession has certainly abated for Apple, but is there more to these financial results? Is there more that can be imputed about the general economic recovery?

We can thank Professor Carlota Perez for pointing us to the fact that the old economy was becoming progressively more inefficient. And that this inefficiency would lead to a decline in the engines that drive the economy. This fact is generally agreed to by most, and that change is in the air from an economic point of view. But more importantly is her highlighting the role of Information and Communication Technologies (ICT), in providing the real value generation of the near future.

Perez stated simply the Information & Communication Technologies are the engine that will bring the world economy to an entire new level of performance. A level where the problems of today will pale in comparison to our opportunities. That we will experience an increase in general quality and standards of living. I like to think we are at a point in time that parallels the industrial revolution, which we are. But instead of mechanical leverage we are leveraging intellectual thought and ideas. An opportunity that will take us many decades of increasing productivity and quality of life.

The New York Times ran an article that speaks to these opportunities.

Much depends on how the nascent revival in the technology sector plays out. Computer hardware and software are building blocks of the modern economy, as basic as iron ore and coal were to the industrial era. Together, technology products represent about half of all business spending on equipment.

John T. Chambers, chief executive of Cisco, was even more bullish recently, predicting a substantial increase in productivity at American companies driven by investments in Internet software and hardware. “I think we are entering a period very similar to 1997 to 2004, where you’ll see a decade run of productivity increases,” he said in an interview.

And for the oil and gas industry that is what People, Ideas & Objects is about. The Users, Producers and Developers that are involved in this applications development. We'll be able to incorporate the never ending productivity initiatives into the software. Making the producer firms benefit by being the most profitable operations through the use of this software and Community of Independent Service Providers. Please join me here.

Technorati Tags: People's Call-to-Action Perez Change Economics

A Brief Summary

The last two blog posts highlight the value of the Draft Specification and why the industry needs to begin the process of building this application. The Users and Producers are both major beneficiaries of being involved in this project. The Users have the opportunity to build the systems and Community of Independent Service Providers. These Users are focused on ensuring that they provide the most profitable means of operations of any producer.

For the Producer, not only do they get the systems and software that identify and support the Joint Operating Committee, the natural form of organization in the industry. They also have the ground work inherent in their organizations that will enable them to remain innovative for decades to come. With People, Ideas & Objects, producers will have their organizational DNA able to carry them for at least twenty more years.

The other thing we have learned in these last two posts is that the competition has no vision. Oracle has been in "rewrite" mode for the better part of this past decade. Buying ERP vendors by the dozens, they have inherited a legacy of applications that are being brought under the name of the rewritten Oracle Fusion. That's a compelling vision! Until now we have not had the benefit of a well defined competitive offering from Oracle. Now that Fusion is defined we can move away from their declaration of it being a competitive offering.

The strategic positions and offerings of Oracle, SAP and People, Ideas & Objects are there for each producer to begin their evaluation. And don't forget to evaluate the different business models. People, Ideas & Objects is charging the costs of developing the application once, across the entire industry. I don't think that Larry Ellison with his $24 Billion in acquisitions, and $15 Billion of research and development on Fusion, will have his customer in mind. He probably is more concerned from which direction his board will be attacking from.

Oracle and SAP products provide technological solutions to business issues. They recommend their products to be purchased and installed in a "big bang" style. Change of the magnitude of People, Ideas & Objects is considering is successful when done from the ground up. The problem with ground up driven change is that it needs a vision. The difficulty for Oracle and SAP is they have no vision of what the innovative oil and gas producer needs.

If your a user interested in getting involved, please join me here. If your a producer that wants to start supporting this development, please call me by using the call me feature at the bottom of the left hand column.

Technorati Tags: People's Competition Community Vision Change CISP Competition Funding
 

Producers Have Choices

Shadow boxing has been something we've had to do here for the past number of years. Our opponent, Oracle was under development with their Oracle Fusion product suite. Fusion is now being promoted, that is to say it's being revealed, to help interested producers decide which system, Oracle, SAP or People, Ideas & Objects, they should use. As no one in their right mind would select SAP the decisions were somewhat delayed until Oracle revealed their hand. Now its D-Day.

For the past four years the giant Elephant in the room has been what Oracle was spending their time and money on. Since their acquisition of PeopleSoft, J.D. Edwards, BEA and Siebel they had been busy developing their Fusion offering and strategy. Therefore it's now time to expand our focus of the competition to include Oracle Fusion. I think I have seen enough to know that the Oracle's Fusion product is not designed or suitable for the oil and gas producer. But then I am biased.

Last week Oracle had their annual OpenWorld conference in San Francisco. Oracle CEO Larry Ellison made the keynote presentation on Wednesday. The one hour, forty minute presentation is available here. I highly recommend the viewing of this video to see the type of applications that Oracle is bringing to the market. Viewing of the conferences other presentations are available here. Of interest there is a good video of Sun Chairman Scott McNeally who appears to be retiring from Sun. Always entertaining.

The most obvious point in viewing Ellison's keynote is that he has spent a lot of money. To make this offering the following table reflects how much money Oracle has spent.

PeopleSoft - J.D. Edwards	December 2004	$10.3 billion
BEA	January 2008	$7.85 billion
Siebel	September 2005	$5.85 billion
Research & Development	2005 - 2009	$15.0 billion
Total Investment in	Oracle Fusion	$39.0 billion

And that does not include any sail boats. The serious question that has to be asked is how is Oracle going to make a return on this investment? All of this money has been expended to bring out a generic set of modules that deal with the company as a silo'd entity. Again it has no consideration or understanding that the Joint Operating Committee is the key organizational construct of the innovative oil and gas producer.

In a direct comparison of the module specifications, we see the stark difference between the Draft Specification and Oracle's costly Fusion offering.

Modules available in Oracle Fusion.

• Financial Management
• Human Capital Management
• Sales and Marketing
• Supply Chain Management
• Project Portfolio Management
• Procurement Management
• Governance, Risk and Compliance

Vs. People, Ideas & Objects modules

Generic Modules

Security & Access Control Module

Accounting Modules

Partnership Accounting Module

Accounting Voucher Module

Marketplace Modules

Petroleum Lease Marketplace Module

Resource Marketplace Module

Financial Marketplace Module

Producer Modules

Compliance & Governance Module
Research & Capabilities

Analytics & Statistics Module

Joint Operating Committee Modules

Knowledge & Learning Module
Performance Evaluation Module

People, Ideas & Objects provide the producers with the applications on a cost plus basis. The one time development costs are amortized over the entire industry. Our business is to provide the producer with a software development capability that accommodates the changes in their business. Changes from today and for many decades to come. I will highlight the analysis and decisions that were made in coming to this model over the next few weeks.

Oracle's business model has not changed. Selling the entire application suite to each company is the only way that they can begin to amortize the capital costs they have spent to date. Now whether Oracle will consider those investments as a sunk cost or not is something for them to figure out. But this is not something that is going to be resolved quickly.

Another aspect of these high capital costs, is that Oracle hasn't garnered any competitive advantage in the oil and gas business. Large additional capital costs will still be needed by the purchaser of the Oracle Fusion application suite. I believe the costs associated to customize Oracle Fusion to the producers needs will be substantially greater then the total People, Ideas & Objects costs.

A critical and important characteristic of the People, Ideas & Objects application is being revealed by comparing Oracle's business model. All of the Joint Operating Committee participants are being accommodated by our application. There will be no need to coordinate the interactions with each and every participant, with each and every Joint Operating Committee. The problem in systems in oil and gas is that the interactions beyond the corporate reach cause the firms to expend significant effort in making these interactions work. People, Ideas & Objects is looking at the costs from the JOC point of view, therefore the interactions are handled at the point of origin. The costs associated with defining these interactions in the Oracle Fusion product will be incremental to the costs of People, Ideas & Objects.

If it is not clearly evident to the oil and gas producers that their is a need for new systems in oil and gas, it should be. And that the least constrained, conflicted and confused option is an advantage. This start up with a compelling vision provides real value to the oil and gas producer in comparison to these costly behemoths. How many years before Oracle and SAP come up with a compelling vision of how the oil and gas industry is able to move to the greater demands expected of each producer.  Now is the time to decide where the future of your companies systems come from. Everybody get on board and join me here, the train is leaving the station.

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From Draft to Preliminary

I published the Draft Specification last year and we now move on to the Preliminary Specification. The Draft was developed to codify the research and ensure that a system based on its specification would identify and support the innovative producer. The Preliminary Specification has many objectives but the most important factor is the User will be who will work to define the requirements.

This is the point where the User begins the task of defining what the requirements of the application are. It is also the point where I will no longer have any influence in the makeup of the application. That's the point, one person could do this work if they were able to live to the age of 4,000 years. The scope of the application, as defined, covers the administration and management of the producer. From accounting, legal, land, capital and operational expenditures the entire firm is operated by the People, Ideas & Objects application. Just as SAP is used throughout the company.

The Partnership Accounting Module brings in an additional expansion of the scope by including all global jurisdictions as requirements. If a producer is to operate within all possible areas of oil and gas operations they will need to handle the currency, partners jurisdiction and accounting regulation requirements. Joint Operating Committee's are used throughout the world. Their operations command that the application accommodates operations in any area of the world, with partners who reside in any jurisdiction of the world.

Sounds simple doesn't it. Defining the scope is one of the difficult jobs to be determined in the Preliminary Specification. The compromises, the tough decisions will need to be made by the Users during their development of the specification. That is why the Users are compensated for these contributions and use the knowledge learned to develop their own service based offering as part of the Community of Independent Service Providers.

The Users defined scope will also be dictated by the producers that are involved in funding this project. If a producer firm requires heavy oil operations, natural gas or conventional oil. If they need certain geographically or regional coverage or SEC, SEBI, China Securities Regulatory Commission or Britain's Securities and Investments Board. Or needs to pay Texas, U.S. Alberta or Yemen royalties. A producer that does not include their operations at this critical point in time, can not have the application they need, or the Users that are intimately knowledgeable of their needs. There is much at risk as we transition from the Draft to Preliminary Specifications.

The overwhelming level of the scope of People, Ideas & Objects functionality and process management are daunting. Spooky might be the more operative word. I have been working on this project for over six years and I will continue to work to make this application real. Its that passion thing. Much of what I thought was going to happen in the Preliminary Research Report has come about. The time is now to begin this critical next step of the Preliminary Specification.

The community that reads this blog is large and is waiting along side me. Waiting for the producers to begin funding the Preliminary Specification. Their funding which is needed to ensure it contains what they require in terms of their operations. Please join me here.

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Another step closer.

We live in a world where the communicative ability of each individual is, for lack of a better word, unlimited. What I can do with the technology available to me is truely remarkable. Voice, text and video are all being captured, transmitted, and understood by their recipients. What are they talking about, ideas. It use to be that if you wanted to make a personal phone call at work, use of the telephone for non business purposes was not permitted. As ridiculous as that sounds, and it is ridiculous, it is not too different today. The majority of use of the computer at work is limited to the business areas that you are involved in. Browse to a "not approved" site and you could be called on it. This doesn't turn us into the nanny state, it gives the IT Manager something to do.

What we are doing is spending upwards of two to two and half hours a day to travel downtown to use the computer at the office. Not to much difference to the way that phones used to be regulated. Why wake up to spend all that traveling time for your managers mandatory attendance. When you can be productive as soon as you make a cup of coffee. It doesn't make to much sense other then the ability to so, doesn't exist, because the bureaucracy is unable to change.

The BBC is reporting today that Wifi, which is a cornerstone of the People, Ideas & Objects Technical Vision, is going through another specification called Wifi Direct. Enabling point to point network creation. 

It will let wi-fi devices like phones and laptops connect to one another without joining a traditional network.

The future that I see, and the one the Technical Vision provides, is that people will work in much the same way they are communicating today. Gripes that people were concerned with of working, where ever and when ever, big brother watching, or never get a moments rest, have been replaced with the freedom of not being at the behest of the phone ringing, somewhere they are not. With video being recorded of your every move the belief was this would be an invasion of privacy. These concerns are mitigated by the knowledge that you are being recorded, and the freedom these devices otherwise provide.

People, Ideas & Objects would extend these freedoms to having the opportunity to do your work in the future in the same manner that you live your life today. One in which you the User has a direct influence on. If data security is really the concern of the management then they had better get on board with this software development project. The issue I see is that the bureaucracy doesn't want to give up control of the access to the data.

In the past, many times I would think there is a better way to do the job I was tasked with. Many times I thought this would be so much easier if I could get a new report, or other information to make the job easier. This was easier to do twenty years ago then it is today. How many times have users thought that If I had the authority and access to the data and developers, I could make this job much easier or more timely. People, Ideas & Objects is the opportunity to have these types of interactions available to the users. Please join me here.

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Users, the focus and the key

The visions that are part and parcel of People, Ideas & Objects Draft Specification provide the "User" with an interesting "mainstream" business opportunity. User based development is the critical link in making this or any software development successful. I may now start stating this project is "mainstream" based on the ideas of Professor Oliver Williamson and his winning the Nobel in economics.

We have seen in the past few weeks the discussion turn to the hundreds of thousands of jobs that make up Exxon, and by assumption there are hundreds of thousands of different jobs in the industry. This knowledge is held tacitly in the minds of those that work in the industry. To hold the understanding of a handful of the roles is available to many who have an abundance of experience in the business. But that's about it. The collective knowledge of how this industry operates and runs on is unknowable, and that's the point. The only way we are going to be able to understand this tacit knowledge is by having the community of Users detail what it is they know.

Ask SAP how it processes the delivery of propane to a new customer and they will provide you with their understanding of how to bill for a product. What the User knows is how to use the SAP module to achieve the results that are desired. The User has the tacit knowledge of how the industry works and retrofits that understanding into SAP's version of best practice. What is the best or optimal way of doing the job is never asked, until now.

Users have to be the individuals that work with the developers to build the applications that they know can be better. Until such time as the User is the focus of the development, we will not see the optimal or most effective solution. We will continue to be presented with applications that the developer or a single producer needed. Not what is known to be possible. People, Ideas & Objects is the Users opportunity to have the applications they need, built.

It's also an area where the User can build a business. By bringing their ideas of how best to do a job in the industry, they are paid by People, Ideas & Object's. This is not just a one time event, or something they can be involved in for a few years. I see the applications changing constantly as the underlying industry and business changes. These Users will be involved with the developers on a somewhat permanent part time basis. But that's not all. The User has to have hands on understanding of what is happening at the producer firms.

As members of the Community of Independent Service Providers they also have free use of the People, Ideas & Objects applications at their producer clients. Ensuring that the needs of the producer are met by the applications they have had a significant hand in defining and developing. Being intimately involved in bringing the applications to their producer clients. Where their role with the producer being the defining part of their work with People, Ideas & Objects.

This is not a small undertaking and the amount of work being done by the Users is a large multiple of the volume of time that the developers spend in writing the code. To expect that these people would not be compensated for doing this work doesn't pass the laugh test. They need to be compensated for the advanced skills they bring to this project.

User driven developments are proven to be the only successful method of building quality software. With this project we are taking on the entire scope of the administration and management of the Joint Operating Committee and producer operations. Including compliance and governance. This is not a small task, and although the costs have not been tallied, our focus on the User communities development is the only means of software development that is  considered. Please join me here.

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Nobel to Oliver Williamson

The Nobel Prize was awarded to Elinor Ostrom and Oliver Williamson this morning. I can't think of anything that puts the People, Ideas & Objects community inline with the current thinking of the economic community. I am elated. I am not aware of the work of Elinor Ostrom and I will look into her work to see if it applies as directly as Professor Williamson's does. I have two blog posts on Oliver Williamson's work and the one paper I reviewed "Introduction to Transaction Cost Economics" which provided strong grounding for the Draft Specification. I also have 7 other papers of his sitting in the hopper waiting to be reviewed. I'll certainly bump these up in terms of priority as to when I will approach them.

Noteworthy among today's accolades are the following.

From CATO

Both Ostrom’s work on governance institutions and common-pool resources and Williamson’s work on governance institutions and the transactional boundary of the firm contribute meaningfully to our understanding of how individuals coordinate their plans and actions in decentralized, complex systems.

From The Wall Street Journal

“According to Williamson’s theory, large private corporations exist primarily because they are efficient. They are established because they make owners, workers, suppliers, and customers better off than they would be under alternative institutional arrangements. When corporations fail to deliver efficiency gains, their existence will be called in question,” according to information on the research released by the Royal Swedish Academy of Sciences. “Large corporations may of course abuse their power. They may for instance participate in undesirable political lobbying and exhibit anti-competitive behavior. However, according to Williamson’s analysis, it is advisable to regulate such behavior directly rather than through policies that limit the size of corporations.”

and

Ostrom’s work also has something to say about regulation: “The main lesson is that common property is often managed on the basis of rules and procedures that have evolved over long periods of time. As a result they are more adequate and subtle than outsiders — both politicians and social scientists — have tended to realize. Beyond showing that self-governance can be feasible and successful, Ostrom also elucidates the key features of successful governance. One instance is that active participation of users in creating and enforcing rules appears to be essential. Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctioning are the responsibility of the state and should be conducted by public employees.”

From the Calgary Herald

"Since we have found that bureaucrats sometimes do not have the correct information while citizens and users of resources do, we hope it helps encourage a sense of capacity and power," the professor told a news conference via telephone.

and this quote that takes People, Ideas & Objects to the mainstream and away from the "fringe".

"Over the last three decades, these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention," it said in a statement.

and

"Are there relationships between the Fed and the banking sector, on which it has such a significant influence, that haven't been thought through as fully as they might in organizational terms?" he asked.

Much of their theories were used to prove the Joint Operating Committee is the key organizational construct of the innovative oil and gas producer. Specifically noting that the natural "boundary of firm and market" is best represented in the JOC being the market. I'm dissapointed that I was only able to review one of Williamson's papers. My favorie quote from his paper is as follows.

Ronald Coase's 1937 paper on "The Nature of the Firm"expressly confronted an embarrassing lapse: whereas the distributing of activity between firm and market had been taken as given by economists, the boundary of the firm should be derived from the application of economic reasoning to the make-or-buy decision. pp. 15 - 16

Please join me here in this worthwhile, and now "mainstream" project.

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James Hamilton on Exxon Production

I have highlighted the work of University of San Diego Professor James Hamilton on this blog before. He writes this weekend on the changing face of the oil and gas industry. Focusing on the difficulties Exxon has experienced this past decade in moving their daily production volumes higher. Exxon has stated on two occasions, 2001 and 2006 they will increase production 3% each year. Only to experience an overall small decline.

This is in many ways last weeks news and something that was known by most "in the know" in the industry as early as the mid 1990's. With the commodity pricing being so bullish in the past decade, it is reasonable to assume that all was done by all the producers to bring on as much production as was possible. Nonetheless the overall deliverability of the global industry has been somewhat stable at around 85 million barrels per day.

What I find interesting in Professor Hamilton's article, is the range of Exxon's risk profile. Spending $4 billion for a 25% interest in Ghana's offshore Jubilee oil field.

...it still seems to signal a change in philosophy for a company that has historically been extremely careful with its investments in order to maintain its position as a very low-cost producer.

It is suggested in the article that Exxon needs a price greater then $100.00 per barrel of oil in order to provide a return for that investment. I would suggest that the ways and means of managing this investment in Ghana is not any different then what a groups of start up producers would face in a low risk onshore play in North America. The Joint Operating Committee is the systemically global method of managing oil and gas assets.

Exxon did not spend $4 billion to have the "operator" take operational control of the property. They will influence what they want to see in the property and participate effectively through the Joint Operating Committee. A form of organization that SAP is not even aware it exists! The members of the JOC are able to pursue their own independent strategies as to what they want and need from the property. The conflict and contradictions only arise when Exxon Mobil should attempt to apply a global corporate compromised strategy. These corporate compromises are unable to extract the value that properties like the Jubilee oil field provides. Each JOC needs to be managed in the best interests of the property. A critical change to the way things need to be done in oil and gas today.

Corporate strategies can be developed on what is done with the value of the proceeds from the Jubilee field, and that is where the large International Oil Companies (IOC's) and the start up producer may differ. I recall my many days when I was auditing Imperial Oil the Canadian arm of Exxon. I was reviewing the firms gas royalty operations on behalf of my client the Alberta Government. This was between the years 1988 to 1994 and I accumulated the knowledge of how the firm was designed.

It was brilliant and awe inspiring. The times were different then today, the commodity prices and oversupply of the market were the two overriding concerns. Looking at how the firm extracted value from each property, granted under a standard corporate strategy, and used their "might" to make the operation the most impressive accumulation of assets that I had ever, and still had the opportunity to see.

What I am suggesting is that today Imperial would need to be run in a different manner. A manner where each property is designed to maximize the return and minimize the risk of each individual property. You can not do that with the bureaucracies that are in play, and the software they use, such as SAP. 

Whether a producer is a local startup or ExxonMobil I don't think makes a difference. The innovative oil and gas producer, the National Oil Company (NOC), or IOC will need to make these changes to this fundamentally different oil and gas marketplace. The world is in a deep recession, except for oil and gas. The pricing has never been better and the upside more dramatic to those producers that can innovatively use their earth science and engineering capabilities against their asset bases. With demand for energy from China and India, the future of the industry looks to be the best it ever has. I would challenge the thinking that SAP, conceived in the 1970's, and bureaucracies, conceived of in GM by Alfred Sloan in the very earliest part of the 20th Century, is the solution to the industries needs today.

As I am one to suggest, you should never expect a mouse to run like a horse, do not expect a bureaucracy and SAP to meet the challenges of this industry on a go forward basis. Please join me here.

Technorati Tags: People's Hamilton Strategy Management Innovation

Pushing the Envelope

A lot of change is considered in the Draft Specification. Much of it difficult to assume is correct. What has been researched, and is represented in this blogs 700,000+ words, hangs together in its entirety. In other words it works on paper.

It can be frightening to view the Draft Specification and its impact in oil and gas. I know that people are ready and willing to change. The demand for change being driven by the difficulties in the economy. The escalating oil and gas prices and the financial crisis provides the realization that the old ways need to be looked at. People are looking at this point in time; from the point of view that the old ways are not providing the value we need.

How the future unfolds will not be by happen stance, in my opinion. In other industries some products are assembled in many different countries. They have components and parts that contact dozens of different countries. Organization is more by design then by chance. If, as I believe is happening, the large bureaucracies are unable to continue building value, their difficulties and decline will soon become obvious. That being so, what replaces the ways and means of the oil and gas industry from an organizational point of view.

The point I'm trying to make is that the ways and means of the oil and gas industry will not happen on their own. We need to take what proven ideas we have and start building them to ensure the transition from the old ways, the bureaucracies, is not interrupted to the new, the Draft Specification.

Looking at this problem another way, Exxon Mobil employs hundreds of thousands of people around the world. What do these people do, where do they do it and how do they do their jobs? In many ways we have lost the ability to know what our organizations do. And, if they are failing what does that mean. Can the world afford a decline in energy output? Or do we have an obligation to do something to ensure that there is a transition.

If the bureaucracies have taken the division of labor and specialization to the point where Exxon Mobil employs hundreds of thousands. What will the future need in terms of the division of labor of future organizations. To grow 90 million barrels of oil per day requires innovative, faster organizations. We think we know we can't get their with our current organizations, but we can certainly go backwards into what I will leave to your own imaginations. The choices we make today are therefore critical in making our future.

How this is done is through the people that are a critical part of this industry. Their ideas to make it better and the objects that make up the People, Ideas & Objects software. Please join me here.

Technorati Tags: People's Call-to-Action Change Funding People Ideas Organization

Where do shareholders fit

Yesterday I made the comment that venture capital and industrial capital would not play a role in the future of the oil and gas industry. It is difficult to see how they could begin standing from where they have fallen today, but I need to address another assumption in the Draft Specification.

Where does the money come from that will be used to start the developments within the teams. The teams are the CEO, CFO and COO who are primarily responsible for the discovery and production of the 90 million barrels per day we need by 2030. The shareholders are also critical members of the team as represented by the CFO and through the Board of Directors.

The systemic problems in the financial markets have been with the intermediaries. The banks, brokers, funds and the like. I believe the separation of management and ownership was a good idea, poorly implemented. Interventions by the owners of the businesses have fallen on deaf ears and the implementation of stronger rules like Sarbane's Oxeley have only further entrenched the management.

Direct ownership and representation in the producers is made possible and more effective by, dare I say, Information Technology. This would be a material change in the ways and means in which the oil and gas industry is funded. I agree, the commodity prices are reallocating the financial resources to support innovation and reward sound management. The need for constant infusions of capital will not be as necessary.

Secondly, and here is the point that makes the shareholders involvement possible, if these same shareholders were involved in funding People, Ideas & Objects software development. they would be involved in both the definition and support of the organization. The type of organization that is reflected in this blog.

Recall that Adam Smith developed the concepts of Division of Labor and Specialization. These  have proven that economic growth is a result of reorganization. In the next five to ten years we will face a decline or retirement in the knowledge base of the industry. The volume of work in each barrel of oil will continue to increase as well, particularly from an earth science and engineering point of view. How can this come about if we don't have these changes in the ways and means of the industry?

In this post I have attempted to separate the financial resources between equity and debt. To better understand the role of debt, please review the Financial Marketplace Module.  There is a constant theme throughout these blog posts of the past few weeks. That constant is the need for people to take action. We are challenged by these issues and opportunities, please join me here.

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We need to organize

Yesterday we noted the comments of Mohammed Al-Qahtani of Saudi Aramco. Ninety million barrels of oil are needed to be discovered and brought on to production by 2030. I don't know if he has calculated what that would cost, lets assume its a big number. That's only 21 years, not a lot of time.

Does anyone believe we should leave this task to the current bureaucracies to figure out? How about we leave this ominous task to the likes of SAP to define and support those bureaucracies? It doesn't make much sense does it.

Another assumptions inherent in the Draft Specification is the role that finance capital takes in achieving these 90 million barrels. The short answer of course is absolutely nothing. With the current financial crisis pretty much on full boil it is difficult to see how they could fund the capital requirements for such a Herculean task. Going back to Professor Carlota Perez we find that financial capital is of limited value in the future. Its role was completed in financing the groundwork for the next great surge. The building of the Information and Communication Technologies was the job they were to have done and that is what they completed. As we can see, no one needs their services anymore.

Commodity prices will provide the reward to those producers that are successful. What better motivation is there for the teams, unconstrained cash flow. Failure will also be distributed fairly and equitably. No more need to have the ear of the biggest venture capitalist to endow you with success by granting you an equity influx. Those days are over and the earth science and engineering capabilities are the competitive advantages in the industry, and the determinants of success.

In the world where we are tasked with achieving a 90 million barrel per day increase in production. I can't think of a more exciting place to be then at People, Ideas & Objects. We have a job to do, and its a big one. In terms of the scope of the opportunity, I think that Duvernay's and BlackPearl's left a lot on the table. Please join me here.

Technorati Tags: People's Funding Leadership Strategy

Collaboration is a necessity.

The Oil and Gas Journal have a comment from Mohammed Al-Qahtani, Executive Director, Petroleum Engineering and Development, of Saudi Aramco. He stated simply,

Recovering the world’s remaining oil resources will require a collaborative effort of national oil companies, international oil companies, and service companies.

This quote resonates with a number of assumptions that went into the Draft Specification. How the service industry and the producer companies are able to work closely in this most difficult of tasks. The Resource Marketplace Module is the collaborative medium in which the resource industry is able to market their offerings and contract with the producers that need them. Having an electronic marketplace that enables these connections, and facilitates the contracting is a necessity in my opinion.

The Research & Capabilities Module also provides the producer with a window on the work being done in the service industry. As I mention in that module, the producer receives 100% of the revenues from the sale of oil and gas. These financial resources need to be allocated to the service industry to conduct the research the producers will need in the long run. Funding these activities directly are what will be necessary for the producer and service providers to achieve what Mohammed Al-Qahtani also says in the article.

In addition, he noted that the world would need an additional 90 million b/d to offset declines in existing oil fields to reach a 125 million b/d level by 2030. Current world production is about 80 million b/d.

Finding 90 million b/d will be tough without the ability to collaborate in this manner. Another assumption that I have mentioned before is that the National Oil Companies will become active partners in making these plans real. Their nations reserves could best be developed in collaboration with producers from other nations. Much as Saudi Arabia has always done.

These assumption need to be incorporated in the systems that producers will use from now to 2030 and later. Systems built with the full involvement of its users. Please join me here.

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Framework Alignment

One of the attributes of an SAP system is the ability to maintain the corporate entities compliance and governance. When a firm needs reporting to the SEC or the various tax authorities, SAP provides a solid foundation or framework for that requirement.

In oil and gas the Joint Operating Committee is the legal, financial, cultural, communication and operational decision making framework. It is the business of the business of the oil and gas industry and SAP knows nothing of its existence.

What People, Ideas & Objects is developing is a replacement for the SAP ERP system. One that is purpose built and designed by its users for the oil and gas producer. A system that aligns the compliance and governance frameworks with the five frameworks of the Joint Operating Committee. An alignment that eliminates the conflict between operational authority and accountability. An alignment that identifies and supports the key attributes of an innovative oil and gas producer.

In my opinion SAP provides the compliance and governance that is necessary for the public oil and gas producer. But these are not the drivers of the business. The Compliance & Governance Module of the People, Ideas & Objects Draft Specification provide the same compliance and governance that SAP provides, however, with several differences. Instead of being the driving reason of the administration of the firm, the compliance and governance are processes that fall out of the actions and processes conducted within the Joint Operating Committee.

One of the major issues that is presented by using the Draft Specification is the governance model. With the Joint Operating Committee taking a larger and more prominent roll in the day to day management of the asset. Influence and contributions come from many different corporate entities. What is needed is a governance method that can appropriately manage the asset and meet the compliance and governance needs of the producers who make up the JOC. These are the reasons that the Draft Specification has developed and introduced the Military Command & Control Metaphor governance model.

Although moving to identifying and supporting the JOC brings issues like the compliance and governance model into question. Methods to overcome these issues are sound and are enabled for one reason, in my opinion. And that is the natural way that the JOC operates within the industry. The Draft Specification is simply aligning itself with not only the five frameworks of the JOC, but the natural way in which the industry operates. This is also the reason why SAP fails in oil and gas, please join me here in building this worthwhile system.

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Industry Management of Intellectual P...

I want to stress or highlight a key point of the Draft Specifications assumption about the producers competitive advantage. The physical assets, reserves, leases and the capabilities in exploiting those assets are the sustainable competitive advantage that producers are interested in. A producer organization focused on building value, using the Joint Operating Committee (JOC) as the key organizational construct, can employ the right strategy for that JOC. There is no need to have a corporate strategic compromise now practiced in most firms. The strategies of the various producers within the JOC do not have to be, and probably never will be the same. Many producers have different asset mixes, costs and dynamics within each JOC. They are each free to pursue their strategy without creating conflict within the JOC.

In addition the energy producers need not own can not own the intellectual property of how the industry conducts its operations. The service industry is best able to work with the producers to innovate and develop the tools and methods necessary to optimize the discovery and production of oil and gas. Does it provide Duverney or BlackPearl with any value to have developed and patented the most innovative drill bits? Of course not, if they had developed their own drill bits they would probably be in bankruptcy instead of sold for many billions of dollars.

Is the CFO of a producer firm going to come up with the next great innovation in drilling technology. How about the CEO, will he finally prove his theory about the physics of oil and gas accumulation? No. If they were they're not doing their jobs. And as Duverney and BlackPearl have shown. Their job is in applying their understanding of the science to the assets they own, and building their production and reserves.

Who is going to "break their pick" on the next drilling technology. Who is going to discover the next organizational structure that supports the innovative producer. These innovations can only be discovered and built based on the scale that has the entire energy industry benefiting from them. To have them within one producer does not provide the motivation for the individuals to break their pick doing so. This is why the Draft Specification has developed the Research & Capabilities Module and the Knowledge & Learning Modules.

I see Canadian producers involving themselves in the business of their suppliers and service operations. When Encana purchases its own rigs when there is a rig shortage, that only stops anyone taking the risk of building new rigs. The message is the oil and gas company will involve itself in direct management when the service industry is unable to provide the needed services. This too is a direct symptom of the attitude that the Intellectual Property of the oil and gas industry is not developed or owned by any group or individual. This is the wrong type of thinking and it needs to stop. Please join me here.

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MGI on Global Financial Markets

The McKinsey Global Institute is the research and development arm of McKinsey Consulting. (Registration Required) They have published "Global Capital Markets: Entering a New Era".

MGI’s mission is to help leaders in the commercial, public, and social sectors develop a deeper understanding of the evolution of the global economy and to provide a fact base that contributes to decision making on critical management and policy issues.

To suggest that I am overwhelmed by the scope of the economic problems that we face. Is something that I would never have believed possible. I'll leave it to those that want to review the paper to do so, however, it is stark. My "job" here at People, Ideas & Objects is to make the ideas compelling for like minded individuals to organize and act. I call on the shareholders of the existing oil and gas firms to build the software discussed in this blog. To act in financing the building of the application modules in the Draft Specification. As Paul Romer recently said in terms of his Charter Cities initiative, "All that holds us back is a failure of imagination."

After 12 months of the global credit crisis, it is easy to see the difficulties that continue in the marketplace. In reviewing this MGI document it is clear that serious problems remain. My own opinions are not of importance, but it really seems that we have been using debt to fuel the western lifestyle for the past 20 years. To find the value that should have been generated during this past 20 years, is a lonely and difficult task. I see the bureaucracy as being the main culprit here. Accusing the bureaucracy is somewhat self serving for me to say, but I don't see any value being generated through this archaic form or organization. Continuing on in the fashion that we are, shows me that we will be challenged in keeping the global economy moving forward. 

I leave you with a few select and sobering quotes.

Going forward, our research suggests that global capital markets are entering a new era in which the forces fueling growth have changed. For the past 30 years, most of the overall increase in financial depth—the ratio of assets to GDP—was driven by the rapid growth of equities and private debt in mature markets. Looking ahead, these asset classes in mature markets are likely to grow more slowly, more in line with GDP, while government debt will rise sharply. An increasing share of global asset growth will occur in emerging markets, where GDP is rising faster and all asset classes have abundant room to expand.

Given the decline in asset values and growth in debt, we see that leverage in the global economy has increased during the financial crisis rather than declined. This is true for many households, governments, banks, and some segments of the corporate sector. In aggregate, the global debt-to-equity ratio nearly doubled, jumping from 124 percent in 2007 to 244 percent by the end of 2008. This raises the vulnerability of the global economy to further shocks. It also indicates that the long process of deleveraging in the private sector has at best only just begun, and in the public sector has yet to begin.

One of the most striking consequences of the financial crisis was a steep drop-off in cross-border capital flows, which include foreign direct investment (FDI), purchases and sales of foreign equities and debt securities, and cross-border lending and deposits. These capital flows fell 82 percent in 2008, to just $1.9 trillion from $10.5 trillion in 2007 (Exhibit 7). Relative to GDP, the 2008 level of cross-border capital flows was the lowest since 1991. This created turmoil in the global banking system, causing severe liquidity crises and hurting borrowers dependent on foreign loans. It is unclear at this writing how quickly these flows will recover.

Although the crisis started in the United States, it followed multi-year borrowing expansions in many other countries as well. Total global borrowing—comprising all loans, forms of credit, and debt securities—rose by 70 percent from 2000 through 2008, to $131 trillion. Not only has the recent credit market turmoil nearly stopped this growth, but it has set the stage for a long process of debt reduction going forward.

Many parts of the economy will need to be rebuilt. Oil and gas is rebuilding around the Joint Operating Committee and the vision of the Draft Specification. Please join me here.

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Innovation of innovation.

An interesting paper has been jointly published by MIT and The Wall Street Journal. Entitled "The New, Faster Face of Innovation." Written by MIT Professor's Erik Brynjolfsson and Micheal Schrage.

What we have learned is innovation and science are iteratively advanced. As innovations are developed, they have an impact on the underlying sciences, which enable further innovations. It is difficult if not impossible to make any reasonable comparisons between "most industries" and the oil and gas industry. Few share the high levels of pure science and almost pure capital orientation. The prospective prototypical producer needs to be built specifically to enable innovation, and the Joint Operating Committee is the ideal organizational structure to enable the innovative producer.

There exists bureaucracies that are the legacy of the 20th century. These bureaucracies are ill suited to meet the needs of the changing environment brought about by innovation. In addition to these organizations are the systems that support and identify that bureaucracy. And as I stated in the Preliminary Research Report, "SAP is the bureaucracy". We have also learned that if we want to change any organization, we need to address the software that the organization uses. To achieve the innovation we need in oil and gas requires the People, Ideas & Objects application modules to be built.

Much, if not all of the Draft Specification is based on the research that was conducted from 2003 to 2008. It's about innovation and how that can be enabled in the oil and gas industry.  Development of the ideas from this point forward has to involve the users. As the producers iterate on the innovations and science. The need for the organization and systems will have to change with them. Users are the front lines of these changes and will implement them through the purpose built systems and software development capability of People, Ideas & Objects.

But the essential point remains: Technology is transforming innovation at its core, allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago.

Setting the tone of this document as a technological focused article, this first quotation also reflects the generic nature of "most" businesses. Oil and gas is unique due to the orientation towards science and capital. These two attributes conspire to make the business a long term strategy fight as opposed to one that can benefit from such tactical iterations. Irrespective of the tone of this article, the next quotation is valid and should be considered as a necessity of the innovative oil and gas producer.

Companies will also be willing to try new things, because the price of failure is so much lower. That will bring big changes for corporate culture—making it easier to challenge accepted wisdom, for instance, and forcing managers to give more employees a say in the innovation process.

It may seem to many that the Draft Specification introduces to much change into the oil and gas producer. However, I would suggest that in the very near future many of the changes in the People, Ideas & Objects application modules will seem tame in comparison. What users should take from this is that the changes are not being made for the purpose of change itself or for technological reasons. Research in to the cognitive and motivational paradoxes as identified by Professor Wanda Orlikowski reflects the need for the scope of these changes in the organizations.

Already, this powerful new capability is changing the way some of the biggest companies in the world do business, inspiring new strategies and revolutionizing the research-and-development process.

and

Increasingly, the more innovative companies—the Googles and Harrah’s of tomorrow—will shift away from traditional research-and-development methods. Five years ago, for instance, a leadership team might have reviewed two or three “big” innovation proposals from consulting gurus; executive teams today might compare the outcomes of 50 or 60 real-world experiments to decide which ones to act upon.

Are we right? Basing the research done in the past six years in academic thinking is necessary to ensure we remain on track. One of the most valuable resources has been McKinsey Consulting. The number one consulting firm in the world have published volumes of pertinent research in these areas, and I have reviewed their material in 60 different posts on this blog. This is the process that I will continue to work on, and as the following quotation reflects, will become the means in which the total industry develops.

Even if a test doesn’t produce a workable idea, there’s usually something important to be gleaned from it. “Genius is born from a thousand failures,” says Greg Linden, an entrepreneur who has been an innovator at both Amazon.com Inc. and Microsoft Corp. “In each failed test, you learn something that helps you find something that will work. Constant, continuous, ubiquitous experimentation is the most important thing.”

Learning from failures is a difficult lesson for those concerned. But the risks and rewards are higher, particularly with today's oil and gas prices. Please join me here.

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Stormy Clouds

I'm finding there is a surprising level of resistance to the concept of cloud computing, and I can clearly see the point of view of the pessimists. Firstly People, Ideas & Objects are proponents and active users of Cloud computing and expect to host the application modules on centralized servers. The resistance to the idea seems to be focused around the fact that the status-quo hierarchy. Who's decline is the defining purpose around People, Ideas & Objects. Doesn't want to have control, as represented by the computing of the firm to fall outside of their jurisdiction. When it comes to politics the status-quo is always mindful of its turf.

First the prototypical producer in the People, Ideas & Objects vision of the future has a revised competitive strategy. Which depends on the effective capability to exploit the lease and fixed assets the producer firm owns. The capability being an innovative and science oriented competitive strategy based on the earth sciences and engineering skills of their community or domain. Many an oil and gas firm has been launched from the CEO's kitchen table. What is different in this future vision is the CEO is the firm. Where ever and when ever he or she is working is where the firm exists. Incurring rent expense for the entire firm seems disproportionately excessive to me. Does a Doctor ensure that he has enough office space to visit each one of his patients, or just the patients that he needs to see that day. Mandatory attendance in the office by your manager will cease to exist in the People, Ideas & Objects applications when the management (noun) realizes the need to take attendance is no longer required.

If we go back to the Technical Vision of this project we see some of the assumptions that are the basis of this project. Its the Joint Operating Committee that is the entity that needs the processing. Which company will conduct the processing of the transactions for the joint account? As the Partnership Accounting Module notes, the costs are incurred by the partners on behalf of the JOC. And the vision sees each and every producer is contemplated to have provided some consideration, land, finance, ideas or capabilities in terms of meeting their legal commitment to the property. For innovation to take hold, the strategy of the JOC needs to be in the forefront of the management (verb) of the property. A compromised global corporate strategy of the operator is inadequate to meet the needs of each and every producers JOC.

Other assumptions include the asynchronous processing of transactions. These transactions will be generated throughout the area of which the operation resides. Whether that is the field, or anywhere in the world. People will not be going to the downtown office to make a business phone call or account for a transaction. The oil and gas business will take place everywhere and anywhere, as it always has, the centralization of staff in offices downtown is the situation that is changing.

Where does the server go in these otherwise empty buildings? Is it reasonable to expect to staff and house a number of servers in one location for the firm? Even if these resources are only required for 10% of the time? Remember we are focusing on the producers key competitive advantage of earth sciences, engineering capabilities, lease and asset holdings.

When Duvernay (a start-up that sold to Shell for $5.9 billion) and BlackPearl (a start-up sold to Shell for $2.4 billion) were sold. Was Shell anxious to take on Duvernay or BlackPearl's server and IT talent? Was that what was being sold? Of course not. Shell would have been interested in the Data, and in the People, Ideas & Objects application the data belongs to the producers based on their interest in the joint account. But to suggest the IT and accounting systems infrastructure contributed anything toward the $5.9 or $2.4 billion is foolish.

If anyone thinks Cloud Computing is a fad should try one of the services and think of it from a different point of view. It used to be that you could tell the importance of an individual by their title and the number of people they had reporting to them. This is last century thinking. Constraining ourselves with the burden of a hierarchy is an exercise in getting to the nut house quicker then any other route. What I think people should be thinking is how many hours of standard hour computing did I accomplish today. If I can access 250, or 1,000 hours of standard processing 365 days of a year. Is that not more a reflection of your value to society?

Where does one put (1,000 / 24) 42 computers to achieve that 1,000 hours per day? In there basement? Is it being suggested that an individual, who is conducting 1,000 hours processing per day, is less valuable then an individual who drives downtown to sit in front of one computer each day? During the course of a month accessing those 42 machines may need to balloon to several hundred or thousands for a matter of 15 minutes. Or, contract to 5 machines for the period of a week. If information is an advantage, should you wait for that one computer in front of the employee to do one thousand serial hours of processing?

Client server as a computing architecture is dead, long live client server. The technical vision that is the basis of this project notes the demise of the client server architecture. The four combined technologies of the technical vision enable a different architecture. One where sensors and processing is distributed throughout the field operation, phones, etc., etc. Is this processing and sensors only permitted to be calculated on a computer certified to be owned by one producer or the other? If so then building dedicated networks of devices is going to be a real growth industry.

Information Technology has matured, that is a given. It is however necessary to have a handful of staff that are specialized in the various sub-disciplines that make up the Information Technology domain. Continuing to employ them in a static environment where their skills are only needed 10% of the time, and the rest of the time is consumed in meetings and paper work to show their real value to the business. If this is the vision of how to earn the billion dollar buyouts like Duvernay and BlackPearl, I wish you luck. In the mean time, if you think that Cloud Computing does provide value, and makes sense, then please join me here.

Technorati Tags: People's Strategy Value-Proposition Community Development
 

Revisiting Professor Carlota Perez

I've had the fortune to once again stumble upon the document that introduced me to Professor Carlota Perez work. Strategy + Business published "The Thought Leader Interview" back in November 2005. This article sticks in my mind constantly. Her analysis and conclusions resonated with me then and have only become more valid as a result of the credit crisis. I have to say she was able to clearly identify the risks to our economy, and accurately lay out the implications that we were to face.

Early on in the interview Perez is able to effectively communicate her long wave economic theories in a short and precise manner. The far reaching consequences of the transition from one era to the next, in which she calls for the Information and Communication Technologies to drive the growth of our economy.

S+B: On the airplane here, I read two articles about the future. One predicted economic clear sailing and the other foresaw crisis and collapse.

Perez: They’re probably both right. We may well have a jolt or two in the near future, and then a great boom probably lies ahead. But the Nasdaq collapse of 2000 was not big enough to force the changes necessary to get there.

S+B: For people who lost their retirement savings, that’s a difficult statement to hear.

Perez:
I couldn’t agree more, but that’s the price we’ve historically paid for our ability to reach great booms. The collapse has to be disastrous enough to make it clear to everyone that the time when the stock market drives the growth of the economy is finished. Finance capital has done its job; it’s brought forth the resources to pave the way for the next wave of technology. Along the way, it’s created an environment in which companies like Microsoft, Intel, and Google could emerge and flourish. Now we need to spread out the new paradigm of our era through all the economies of the world, just as in the past.

The comment that she made about the "collapse has to be disastrous enough to make it clear to everyone" leaves the reader with the need to determine if the credit crisis was it. I don't think so, governments have propped the economy up with over $12 trillion in stimulus. As a result many on Wall Street, and particularly the bankers, have assumed its 2007 all over again. I see substantial change in the consumer and small business areas. Where cash is king and they are planning on rough seas for many years to come. Governments and big business seem to think that moral hazard is the new era on which to base their economic future. This folly will soon reveal its true value.

It's been four years since Perez was interviewed. It is also the amount of time that I have spent researching and communicating the vision of using the Joint Operating Committee in the oil and gas industry. Four years of rather obscure and difficult work that in most economic environments would not see the light of day. Perez' analysis was able to provide me with the confidence that these events would happen and therefore the need for the change to the JOC would materialize. As a result I believe that with the Preliminary Research Report and over 300 papers I have reviewed through this blog. The oil and gas industry can benefit from well over five years of difficult research and development of a vision that is technically and economically sound. Or as Perez states, a new common sense.

S+B: And organizations are different as well?

Perez:
Yes, each surge brings with it a new organizational paradigm, new best practices, a new “common sense.” No one today would propose a centralized, rigid, top-down organizational structure, where you cannot communicate across functions except through your bosses, but that was precisely what Alfred Sloan set up at General Motors, to great advantage at his time. With today’s communications and flexible technologies, agile creative networks make more sense and lead to much more productivity.

One of the key attributes of any change is going to involve the movement of financial resources. There is a large community of potential users that will be involved in building the People, Ideas & Objects application modules. And there is going to be a very large Community of Independent Service Providers (CISP) that earn their living from either People, Ideas & Objects application or in their own service based offering to the oil and gas producer. People, Ideas & Objects will use the Intellectual Property developed through this blog and represented in the Draft Specification to secure the finacial resources from the oil and gas producers. These funds will then be distributed to both the User and the CISP communities. Perez notes the need for these "business innovations" in her 2005 interview.

Fourth, there need to be innumerable investments and business innovations to complete the fabric of the new economy. Here’s one small example: Millions of self-employed entrepreneurs work from home with uneven sources of income. Where are the financial instruments to smooth out their money flow so they can work and live without anxiety? For them, that innovation could be the equivalent to installment credit in the 1950s, which made possible the consumer base needed for mass production.

Lastly, we need to act.

S+B: Then why not simply wait for it to emerge?

Perez:
Because left to itself, it might not happen. Historical regularities are not a blueprint; they only indicate likelihood. We are at the crossroads right now. It is our responsibility to make sure that the enormous growth potential of the next golden age will not be lost.

Please join us here. And for more information on the soaring reputation and work of Professor Perez and her ideas, here are two resources that provide good summaries. (Reason Magazine and Business Week.)

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More comments on Google Wave

I have a real passion for Information Technology. Applying IT to my understanding of the business of the oil and gas industry is more fun then work. The recent maturation in the Information Technologies bring together an opportunity to increase productivity and make life more interesting. One of the technologies that I saw over the summer had me thinking that when we incorporate the framework in the People, Ideas & Objects applications, we could make a big difference. That technology is Google Wave which I report about here and to a lesser extent here.

I also think Google Wave is one of the frameworks that will be a game changer. A game changer that is being overlooked as to its importance and impact, particularly from what I would call the classic ERP vendor. If we look at the People, Ideas & Objects technical vision we see the elimination of client server computing. Asynchronous Process Management and IPv6 are two of the four cornerstones of the technical vision. These intimate the power, particularly in oil and gas, in which these technologies can be deployed. Add to this the User focus of this project and the potential environment for innovation, to me, is intoxicating.

Today I ran into this blog post that sees this same opportunity. As I indicated in my previous post, pooling the resources of the producers to the various Joint Operating Committee's (JOC) is done through the Military Command & Control Metaphor which is an underlying theme throughout the Draft Specification. The blog posts author Jason Kolb notes;

Take CRM and ERP systems for example.  Instead of customers emailing you about a sale and then sending purchase orders, it will be part of the "sale wave".  The entire sale, from start to finish, will be encapsulated in a single wave, bringing individuals in and out of the conversation as need.  The ERP and CRM platforms themselves will be participants in this conversation, recognizing the purchase order, executing the work-flow, processing the order, making the order details available to manufacturing or delivery in a sub-wave, and then making the receipt available to the customer and the sales team.  Your CRM Whether you approve the purchase order from your desktop, your phone, or a point of sale device, makes no difference--they can all be directly addressed and participate in the conversation natively.

The conversation that is mapped by the Google Wave product, embedded in the People, Ideas & Objects application modules will document transactions. Recall transactions are key to modules like the Accounting Voucher. As not only the definition of the boundary between market and firm. But most importantly, is that designing transactions is the higher value added work that is done in the oil and gas industry. It is how the work gets done and these Wave conversations will be inherent in the Accounting Voucher as part of these transactions. The thing I see that makes this technology important to me is; the natural means of documenting and processing User designed transactions. Please join me here.

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