The Preliminary Specification Part CXCVI (PLM Part XXXI)
This will be the last post of our fourth or capabilities pass through the Petroleum Lease Marketplace module of the Preliminary Specification. Tomorrow we will begin with our fourth pass through the Financial Marketplace module. I think that what we have learned about capabilities is valuable and applies to the “Marketplace Interface” that we detailed during this fourth pass. That “knowledge, skills and experience” are the basic ingredients of capabilities and these fit in well with the Petroleum Lease Marketplace module. If we at People, Ideas & Objects could be so bold as to assert that we include “ideas” with knowledge, skills and experience then we are starting to really build on these concepts.
The other aspect of what we have discussed is the role the oil and gas industry has in making the market supporting infrastructure. This includes standards and as we have discussed, software like People, Ideas & Objects to support the markets and the marketplace. The choice between the marketplace and the management as to who will control the industry in the future has already been made. The Internet demands the decentralized methods of the market will rule the day. Just don’t tell the current management as they fight to hang on to their last few moments of control.
When a modular product is imbedded in a decentralized production network, benefits also appear on the supply side (Langlois and Robertson 1992). For one thing, a modular system opens the technology up to a much wider set of capabilities. Rather than being limited to the internal capabilities of even the most capable Chandlerian corporation, a modular system can benefit from the external capabilities of the entire economy. External capabilities are an important aspect of the “extent of the market,” which encompasses not only the number of possible traders but also the cumulative skill, experience, and technology available to participants in the market. Moreover, because it can generate economies of substitution (Garud and Kumaraswamy 1995) or external economies of scope (Langlois and Robertson 1995), a modular system is not limited by the weakest link in the chain of corporate capabilities but can avail itself of the best modules the wider market has to offer. Moreover, an open modular system can spur innovation, since, in allowing many more entry points for new ideas, it can create what Nelson and Winter (1977) call rapid trial-and-error learning. From the perspective of the present argument, however, the crucial supply side benefit of a modular production network is that it provides an additional mechanism of buffering. p. 70
To summarize the interfaces in the Petroleum Lease Marketplace to this point:
Capabilities & Commitments Interface
A summary of the capabilities that are “acquired through” and “committed to” the various Joint Operating Committees your firm is party to.
Long Term Capital Program Interface
Summarizes in geographical and account form the projected capital expenditures of the firm. Data is sourced from reserve reports, stripped of any proprietary information, is aggregated with other producers information and published to suppliers and vendors.
Revenue Per Employee Interface
Calculates Revenue Per Employee for each producer in the industry. Variances and trajectories for volume, price and number of employees, public data. Calculations for Revenue Per Employee for each Joint Operating Committee that your firm participates in. Variances and trajectories for volume, price and number of employees, private data.
Strategy Interface
Collaborative interface to discuss with partners what the strategy for each Joint Operating Committee will be. Overall interface which summarizes what each unique Joint Operating Committee’s strategy is.
Marginal Production Threshold Interface
An interface that enables the producer to collaborate with other members of the Joint Operating Committee and establish thresholds where prices or other criteria would trigger action to reduce production. Once criteria are established, then the interface could be used in as automated a fashion as desired to reduce production.
Marketplace Interface
A virtual environment that represents the Petroleum Lease Marketplace. An environment where the producer or Joint Operating Committee can buy, sell, bid, post, acquire, participate, trade, in lands, leases and oil and gas properties. An environment that is supported by the administrative and transaction capable lease administration necessary to support the marketplace.
What has been done already has the sharp-edged reality of all things which we have seen and experienced; the new is only the figment of our imagination. Carrying out a new plan and acting according to a customary one are things as different as making a road and walking along it. p. 27
and
There has to be a mechanism by which new knowledge enters the system. And that mechanism cannot be rational calculation, for as David Hume (1978, p. 164) long ago observed, “no kind of reasoning can give rise to a new idea.” p. 27
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification.