A Quick Review of Our Revenue Model Part IV
Building systems that deal with the commercial interactions between the producer, society and the individuals that work in oil and gas, and the service industries, is beyond the direct concern of the producer. Yet, are a necessity of basic operations. If we agree that the competitive advantages of the producer firm are based on it’s unique composition of oil and gas leases, physical assets of the firm, and application of the firms earth science and engineering capabilities. The producer will remain involved and focused on the development of efficient software systems to identify and support those competitive advantages. Much in the same manner as society and individuals will work to develop those same systems to meet their needs.
Therefore, the producers / investors decision to financially support these developments affect society and individuals. The producer firm receives 100% of the direct revenues from oil and gas sales. Allocation of a portion of these oil and gas revenues towards an initiative like People, Ideas & Objects can not be evaluated based on its competitive return at the producer level. Everyone is familiar with one or more software development or implementation projects that were terminated as the result of a lack of long term funding. These failures have little to do with the quality of the project or the people that were behind it. Over time the sense of urgency that the project may have put forward fades as does the financial support. Approaching a project with the scope of People, Ideas & Objects, without having an answer to a fading sense of urgency would be a failure.
The question therefore becomes, how does the revenue model of People, Ideas & Objects 1) sustain these communities throughout the development cycle and 2) provide these communities with the software tools they need to expand economic output? We provide this by way of the inherent promise or guarantee of this project. That being, this software development, and associated communities, provide the innovative oil and gas producer / investor with the most profitable means of oil and gas operations. The profitable nature arising as a result of the expanded oil and gas output, based on the enhanced division of labor enabled with the People, Ideas & Objects application, and, the value proposition we have put forward.
The specifics of how we provide our guarantee of the most profitable means of oil and gas operations is contained within the Preamble to the Preliminary Specification. The producer firm can specialize within their domain of the earth science and engineering aspects of what an innovative producer requires. The majority of the administrative and accounting functions will be provided through service providers who are focused on the process and are using the industry as their client base. This specialization and division of labor by the service providers and the producers provides the profitable means of operations for the oil and gas producer in comparison to today’s business model. It however also opens many opportunities for the producer to manage their operations in ways that address the issues and opportunities of the 21st century. These were quantified for North American operations at $94 billion in opportunity costs for 2012.
To achieve this specialization and division of labor between these organizations, individuals and within society will not occur spontaneously. If the oil and gas industry wants to achieve the next level of organizational efficiencies, such as what is defined in the Preliminary Specification. It must be defined and supported in the software that is used within the domain of the organizations, individuals and society that benefits from it. We have reached the limits of the gains that can be achieved by spontaneous order. It must be a deliberate act undertaken by the producers to move to the next level. Only then can the economic output of the industry expand for all concerned.
The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.