How the Market Must Develop

In many ways the Resource Marketplace module of the Preliminary Specification is the crossroads of many of the other People, Ideas & Objects application modules major processes. It is where the Accounting Vouchers design of transactions will ultimately be exercised. And where the Research & Capabilities overall process of capabilities development and implementation will be realized. Maybe most importantly it is a marketplace module where people will be able to buy and sell their ideas for products and services of what the innovative and profitable oil and gas producers need. If the Research & Capabilities module is a long term process of maintaining and increasing the earth science and engineering capabilities of the firm and Joint Operating Committees (JOC). Then the Resource Marketplace module is the day-to-day of implementing the policies from that long term process.

We also see in the Resource Marketplace module some of the efficiencies of using the JOC as the key organizational construct of the innovative producer. And that is an important differentiation of the Resource Marketplace module in comparison to the Accounting Voucher and the Research & Capabilities modules. It is a Joint Operating Committee (primarily) facing module. Therefore it is representative of the many participants of the JOC and therefore will have the influence (industry standardization) of many producers Accounting Voucher needs and Knowledge & Learning developments. Optimizing transactions between contracting parties will provide enhanced performance to the overall industry. These changes will not lead to small increments in overall performance, but I believe based on my research into Professor's Langlois and Baldwins theories, will have exponential performance improvements.

Another key point is the tearing down of the basis of Intellectual Property (IP). An industry such as oil and gas which is based on its earth science and engineering needs. After all it is a business based on science. If we are to expand the capabilities in the science and innovation in the industry. We are going to need to solve many very difficult problems. And as we progress, the volume of ideas needed will be an order of magnitude of what is required today. These problems cannot be solved in an environment where there is no upside for the individuals to solve them. Addressing the motivation to solve these problems and enabling the people to earn the rights to the Intellectual Property within the People, Ideas & Objects application modules is the first step in making the necessary industry wide changes. This therefore turning the oil and gas industry into a far more dynamic business.

I want to quote some work of Professor Giovanni Dosi’s. Specifically his 1993 article “Hierarchies, Markets & Power” which is a must read for those that want to dive deeper into these subjects. He states a simplistic model of organization will include the following, and I have annotated the area where these are addressed in the modular specification;

The distribution of formal authority. [The military command and control metaphor.]
The distribution of actual power in the above distribution [The people]
The incentive structure. [Innovation, intellectual property, and capabilities.]
The structure of informational flows. [Security & Access Control Module]
The distribution of knowledge and competence. [The people] p. 10
History, so to speak, solidifies into structures which constrain future developments. p 12

The purpose in developing this “Marketplace” is to ensure the future of the industry structure remains flexible and amenable to the changes in the sciences and innovation. But also to attain and maintain the highest performance . And in this next quotation Professor Dosi notes how this will come to be.

Clearly, it is the domain of Schumpeter’s creative destruction’, and of Moore’s (1978) analysis of the social bases of obedience and revolt, to name but two famous examples, and it applies also to the dynamics of economic organizations and institutions at large. p. 13

I’m a big fan of that concept of revolt. What I hope to have been able to put across in the discussion of the Resource Marketplace is the bigger question of how capabilities are generated from markets. Information plays a big role in this and the generation of ideas makes those markets dynamic. Lastly we must rely on the market forces of creative destruction to ensure that today’s bureaucracy loses its hold on the reins of power (somebody has got to lose), and that we are prepared to have our solution ready.

As we noted, the big problems in oil and gas were not going to be solved until the incentive structures were aligned towards those that solved the problems. Today, in the service sector, the oil and gas industry exploits the lack of identifiable Intellectual Property (IP) by more or less ignoring it and passing it around to other firms in the service sector and its competitors. This lack of respect to those that developed the ideas has brought about a situation where the service providers have ceased to innovate or sponsor any new start-up firms as competition. The producers are the ones that are losing as they are unable to have their needs met by a diminishing capacity in terms of the service industry.

The situation has become so dire as there is little to no research being done and no start-up opportunities in the oil and gas service sector. The exact reverse of what you would think would be needed at a time like this. The oil and gas producers are reputed to be so difficult to work for that securing staff makes it all but impossible to start a firm, and even if you could start a firm, the producers would only look down their nose at you and scoff. Such is life in the rarefied air.

Nonetheless, what's in it for the producers to accept that the IP should pass from their control to those that will take the time, energy, financial and intellectual risk to solve the producers problems? If we go back to one of the base assumptions that the People, Ideas & Objects software is operating under. We find that the competitive advantages of the producer firm are its physical assets and land base, and its earth science and engineering capabilities. Where in this competitive advantage does any product or service of the oil and gas service industry provide any value to the producer?

The means to acquire, explore, exploit and produce oil and gas reserves are how the producer makes money. That should be pretty obvious, but on the basis of how producers currently manage IP in the industry, they seem to think that drill bits and rigs are their future competitive advantages. What the producer needs is the most advanced and dynamic service industry marketplace that is innovative, productive, profitable and fiercely competitive in order for it to achieve its optimal productive output. What the producers should ask themselves is what have they got themselves now?

A cultural change of this scope will be difficult to implement. Add this cultural change to the numerous other cultural changes that parallel this scope in the People, Ideas & Objects application modules and you have an idea of the difficulty that lies ahead. These are the difficulties for the bureaucracy of the producer firms themselves. They are the ones that have to change. And I can't see that happening. It's a matter for Schumpeter’s creative destruction to sweep out the old and bring in the new. Or a time to revolt. The new being of course the eleven module Preliminary Specification that deals with IP in the manner that will allow for the difficult problems to be solved.

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.

Defining the Term "Designing Transactions"

I want to discuss what I mean when I say that users of the People, Ideas & Objects Preliminary Specification will “design transactions” in the Resource Marketplace and Accounting Voucher modules. Transaction Cost Economics is an important element of how the energy industry can control its costs and designing transactions is a key to those savings and efficiencies. Also I want to highlight the role of the user as an active agent in making things “happen” in the Resource Marketplace.

As with any marketplace the focus has to be on the user. The user in this case could be either a producer, a service industry representative or service provider. A user is someone with access to the People, Ideas & Objects module who would be optimizing the “tasks” and “actors” involved in transactions, and will be able to turn the producers needs into a demand for services in the Resource Marketplace Module.

There are two changes that might make things different in the future as a result of organizing on the basis of using the Joint Operating Committee as the key organizational construct of the innovative producer. One is that designing transactions will become a skill that is going to be used substantially more. And two, the division of labor is going to expand, meaning that the job which may have had a few contractors to complete today, may now have an order of magnitude more in terms of numbers of contractors tomorrow. Consider the following.

When people buy a major item in their lives like a house or a car. They itemize the details of what is, and what is not included in the price. Who is to provide what and the terms and conditions of when the items will be completed. This is what is meant by designing transactions. Its more or less what Lawyers do for a living, or that is to say, it is an important aspect of their work in any commercial sale agreement. This type of work is where the costs and efficiencies of the organization can become onerous, or very easy. If a firm has “engineered” their transaction costs down to a fine point then they are able to manage their costs efficiently. This will be the case for an oil and gas producer. Transaction costs include the costs of installation, finance, testing, the specifications, types of materials to be used and the engineering consultants, etc. In oil and gas it is easy to see how these costs, even for a small job could become problematic.

As the producer focuses on their land & asset base and earth science and engineering capabilities. Product and service providers will be focusing on their key competitive advantages. Letting some of the work that they may have done in the past to specialists at different companies. This will increase the number of vendors that a producer will use to do normal operations in the field. This specialization and enhanced division of labor will provide greater efficiencies and cost control for the producer firm through more competitive and innovative solutions. It will also increase the throughput of transactions that a producer will have to deal with and put more emphasis on the ability to design transactions.

On the other end of this process is the product or service provider who is able to contract for what the producer needs. They too have interfaces to the Resource Marketplace module that are similar to the producers. These users, that may have anticipated what the markets demand is going to be, and are the first to configure an innovative solution. Are able to market their product or service effectively in the Resource Marketplace Module. These elements of the competitive market changes are reflective of the producers needs as determined in the Resource Marketplace, and its use of transaction cost economics (TCE). This process involving an iterative loop of constant improvement of the transactions and processes in the energy industry.

Lastly when these resources are discovered by the JOC or producer, the contract negotiation between the two parties can begin to take place. The first step in contracting will be the determination of exactly what the transaction should look like as determined by the interfaces in the Accounting Voucher. This would then lead to the specific negotiations, automation of the creation of the contract, and assignment of the Resources to the contract. From there this software should enable high levels of automation in order to relieve the user from work that is better suited to computers, and focus on the optimization and efficiency of the transaction.

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.

Introduction to the Resource Marketplace Module

A marketplace to support contracting from A to Z. To deal effectively with the Resource Marketplace the producer will need tools to effectively engage with the suppliers for the resources they need. The Resource Marketplace Module provides a window on the “Resource Marketplace” for Joint Operating Committees (JOC) and producers. Anything of value that is contracted between “actors” in the oil and gas, service, service provider, software and user community generated businesses will be found, contracted, managed and developed through this module. It's simply a virtual representation of the marketplace. Therefore the negotiation, determination of available resources, determination of transaction costs, contract execution and effective software tools to monitor and verify compliance to the contract are all part of the Resource Marketplace module and its interfaces to other modules of the Preliminary Specification.

Similar interfaces will be provided to the service industries. After all transactions have two parties, the efficiencies of the producers would inherently include the efficiencies to the service provider. If we have an accounting system, then certainly offering these services to the suppliers would only make sense. It is not just producers in the Resource Marketplace. Key to the efficiencies in the Resource Marketplace are the mitigation of transaction cost friction. Friction on both sides of the transaction, because transaction costs in the Resource Marketplace are costs that will ultimately be borne by the producer.

Contained within the marketplace will be all of the producers and suppliers who will be able to define, create and conduct business in this virtual marketplace. The scope and size of the Resource Marketplace should accommodate the needs of Exxonmobil and their $250 billion annual operating costs down to the single entrepreneur starting out in the business. To preclude any group, profession, organization, or person from the Resource Marketplace would limit the value available to the industry.

Also, to call this just a Human Resource Marketplace would be incorrect because it would limit the participants in the market. Whatever service, product or solution is provided to the energy industry, from either individuals, those employed by producers or JOC’s, or companies providing services to the producers. This should include Schlumberger and anyone directly or indirectly employed in the energy industry.

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.

Operational Flexibility From the Preliminary Specification

Before we begin our review of the Resource Marketplace module I thought we should take a moment to note the operational flexibility that a producer gains by using the Preliminary Specification. It is one thing for an ERP system to offer administrative flexibility and savings, its another to provide oil and gas producers with the most profitable means of oil and gas operations. It is through the use of the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer that we are able to provide that flexibility and operational control. The Joint Operating Committee is the legal, financial, operational decision making, cultural, communication, innovation and strategic framework of the industry. By moving the compliance and governance frameworks from the hierarchy into alignment with the Joint Operating Committee we achieve these flexible operational benefits, speed, innovativeness and accountability.

These are reflected in the ability to deal with the current low natural gas prices. Under the Preliminary Specification producers will be able to shut-in production without the associated impact to their financials. Under the Preliminary Specification the fixed costs of all administration, accounting and overhead become variable through the use of the decentralized production model. What we do is we reduce the producer down to the c class executives, the earth science and engineering resources, some support staff and legal resources. The remainder are reorganized across the industry into service providers who are focused on the process. There these service providers are able to use the tools of specialization and the division of labor to provide better services to their industry wide client base. Charges for items such as production, revenue and royalty accounting services will then be billed directly to the Joint Operating Committee that produced the commodity. If there was no production as result of being shut-in due to the property not meeting its marginal cost, then no administrative, accounting or overhead charges are incurred and no billing from the service providers will be sent to the Joint Operating Committee for that month the property was shut-in. This provides the producer with the opportunity to improve their financial performance by reducing their marginal production. Save the reserves for the time when they can be produced profitably. Keep the costs of those reserves constant for the future. And holds the natural gas off of the market, keeping the downside in price swings to a minimum.

There is much to be gained from the service providers use of specialization and division of labor. Efficiencies are one thing, however better service is another. With each producer in the current environment having to provide an administrative, accounting and overhead capability within their organization. Efficiency is the objective in every instance. However by moving to the industry wide capability that is reflected in the Preliminary Specification. The quality of the administrative, accounting and overhead capabilities could be enhanced substantially. Adam Smith proved that the division of labor and specialization were effective tools. Used in the manner that is described here would provide substantial efficiencies, or even better yet, quality of services.

The toolset of specialization and the division of labor have also been used to provide solutions to other operational issues in the oil and gas industry. That being the supply of earth science and engineering resources available from the short to the long term. Applying these tools is the sensible way in which to deal with these shortfalls. Therefore a need to organize them in a different manner would be required. The Preliminary Specification sees the issue as each producer having to acquire the capabilities necessary to deal with each contingency associated with any of their operated properties. This requires the producer to develop capabilities that are unused and unusable at any point in time. In addition as the sciences expand the scope and scale of these sciences will require the producer to expand their payroll too broadly to fulfill their capabilities needs. What is needed is for the producer to specialize in terms of its earth science and engineering capabilities and pool these capabilities with its partners within the Joint Operating Committee. Additional capabilities will be available from the marketplace as is required.

Being a Jack of all trades may have worked in the past. As we move closer towards the science in terms of a competitive basis of the industry. It will be difficult to maintain the scope and scale of most producers earth science and engineering capabilities of today. The Preliminary Specification is designed to provide for this pooling, it is a feature of the system, and gives the producer the flexibility in dealing with the operational concerns they are faced with.

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.

Conclusion to the Security & Access Control Module

It is important to remember here in the Security & Access Control module of the Preliminary Specification. That the role and identity based Military Command & Control Metaphor (MCCM) as has been conceived here has not been implemented, developed or conceived of anywhere else before. We are taking the concept and technology of role and identity based management to the next level with the MCCM, pooling and use of specialization and the division of labor in the oil and gas industry.

Why are we bothering with the MCCM and the pooling of the resources in the Joint Operating Committee anyways? The issue that we are resolving is the finite number of earth science and engineering resources that are available to the industry. With the anticipated retirement levels in the next 20 years. With the time requirements to bring on new levels of resources. And most importantly with the demands for more energy, and the demands for more earth science and engineering in each barrel of oil equivalent produced. We face a long term shortage of these critical resources. The need to organize the industry, to exploit specialization and the division of labor are necessary to expand the output from the same number of resources. Doing this without pooling the resources in the Joint Operating Committee will cause the producer firm to broaden the scale of their earth science and engineering capabilities beyond what would be a commercially viable concern. The Preliminary Specification notes that we have contributions of earth scientists and engineers from multiple producers working together to meet the objectives of the Joint Operating Committee. Therefore we need a means in which they can organize themselves and that is the Military Command & Control Metaphor of the Security & Access Control module.

How the MCCM will be implemented will be determined by the user community. However, I can speculate that the Joint Operating Committee will have standard roles and identities that are used throughout the industry. This standardization will probably be necessary for the purposes of making the technology work. The need to have the various areas “covered off” in terms of compliance and other requirements will require a standard template be used by everyone. Then everyone will know that that position is responsible for that role and responsibility. When Joint Operating Committees are small and have only a few people assigned, then multiple roles can be assigned to one individual.

There is also the security and access control issues associated with having the service industry and particularly the service providers accessing the People, Ideas & Objects systems and data. Removing the administrative and accounting resources from the producer firms and organizing them in their own service providers provides significant operational flexibility to the innovative and profitable oil and gas producer. The Security & Access Control module works to tie these disparate organizations into highly organized replacements to the current bureaucracy.

With the natural division in the types of information that are held within a producer and Joint Operating Committee. Producers will know that the Preliminary Specification will be able to deliver the right information to the right people at the right time. That leakage of their proprietary information can be mitigated by isolating the companies data, due to its unique nature and Oracle Label Securities ability to restrict access to database fields.

Oracle’s products provide a strong layer of mission critical capabilities in the Security & Access Control module. Although this comes with additional costs, I am certain that no one will argue with the quality and secure knowledge that these products bring.

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.

People, Ideas & Objects and Oracle Corporation

Please note I will be posting twice per day as we pass through and edit the Preliminary Specification.

Starting with the Security & Access Control module we find that Oracle Corporation have a comprehensive suite of applications that provide for the security and access control that we are looking for. Falling under the Oracle Identity Management brand name. These products include tools for Access Management, Identity Administration, Directory Services and Governance. These product classifications come in a variety of different products and are configured in some specialty industry and management suites.

Two areas that are going to be challenging are going to be the Military Command & Control Metaphor (MCCM) and the inter-relatedness of the Joint Operating Committee and service industry representatives. Early on in the specification we noted a number of research areas that were needed to be conducted. These are two areas that will take some research dollars to resolve. To have the MCCM recognize members of different organizations will not be the challenge. To engage them and have them interact in the manner that we expect them to when we expect them to, will.

Oracle Identity Management resides within the Oracle Fusion Middleware product layer. As we indicated earlier in the Preliminary Specification this is Oracle’s Java Enterprise Server. Therefore these applications are open to be tailored to the user’s needs. So when we do sit down with Oracle and define the Security & Access Control module based on the user needs. These needs can be accommodated by the technologies that we have selected.

And it is through the efforts of the user community that we will resolve these issues. It is also one of the reasons that the budgets of People, Ideas & Objects software developments are where they are. We will have challenges to resolve in delivering these innovative systems to the industry. I would also remind producers that our value proposition sees the one time costs of these developments amortized over our subscribing base of producers. Yet each one of those producers receives the full scope of that development effort in terms of the software application.

We now look into the Oracle product classification of Access Management. Included in the Access Management classification are the following products; Oracle Access Manager, Oracle Adaptive Access Manager, Oracle Entitlements Server, Oracle Identity Federation and Oracle Enterprise Single Sign-On Suite. Each of these products will be included in the Preliminary Specification as they have components that are required for the day to day use by the users, service providers, producers and Joint Operating Committees.

One area that I was surprised to learn that Oracle had been working on was in the area of working with partners, vendors and suppliers. Within the Oracle Access Manager it is noted that they are able to provide... “Building federated user communities that span company boundaries.” These are the beginning of both the pooling and Military Command & Control Metaphor (MCCM) that are critical to resolving so many of the issues that the oil and gas industry faces.

On the heels of Oracle Access Manager is their Adaptive Access Manager which takes the concept of intra partner interactions further with “Oracle Adaptive Access Manager makes exposing sensitive data, transactions and business processes to consumers, remote employees or partners via your intranet and extranet safer.” This is the nature of business in the future. Working with your partners, as is done in the Joint Operating Committee, is an effective means of reducing costs and increasing innovation in any industry. It’s only reasonable that the technologies are beginning to emulate these needs. In addition Oracle Adaptive Access Manager takes the level of security and authentication to a higher level. As a result, our demands regarding the pooling concept and the MCCM, I feel, will be less of a technical risk for the People, Ideas & Objects Preliminary Specification and subsequent developments.

The next application is the Oracle Entitlement Server which provides a dynamic access control element to the applications that use the server. Instead of hard wiring access control privileges into each application and user, you can dynamically generate them using the Oracle Entitlement Server. “The solution can manage complex entitlement policies with a standalone server or with a distributed approach that embeds information at the application level.” So when it needs to be determined if user X has access to Joint Operating Committee Y, a decision from the entitlement server, based on criteria within the application, can be made. If this information changes then the user would be denied access. This provides greater security based on policies and reduces the amount of detailed specific software development that is difficult, time consuming, and costly to maintain.

Federated Identities are also a major part of how the pooling concept and MCCM are implemented in the Preliminary Specification. Oracle Identity Federation provides high levels (attribute federation) to the applications that use it. We have specified in many of the modules, such as the Resource Marketplace module, the use of Federated Identities. Situations like where the contact and other information is maintained by the vendor. That information is comprehensive in nature and includes key organizational contacts, calendars and scheduling information. Working with the partners in the Joint Operating Committee and the representatives of the service industry in this way will effectively mitigate many of the technical software development issues we have.

One area that we will continue to face challenges however is in the Work Order. The ability to dynamically put together a working group to study some earth science or engineering research subject is critical to the innovative oil and gas producer. These are ad-hoc and made with partners that you may have no history with. Federated Identities will provide you with some of the information you need to form the partnership and grant application access, however, there is still the pooling of and sourcing of costs, and budgets which is the bureaucratic nightmare that mitigates and destroys the motivation for these working groups to form. We need to make sure these roadblocks do not get in the way. We have proposed to overcome these issues by developing an intuitive interface for the users forming the working group.

The last thing we want our users to be involved in is some form of mindless security access maze. Oracle Enterprise Single Sign-On Suite Plus promises to keep this from happening. Logging onto and off of systems as the user proceeds through the various modules and components of the applications is a must have. This product also promises the ability to provide this level of service on a remote basis. Which is much needed.

Oracle Identity Manager which will be used as the base product for role and identity management will also be the base of the Military Command & Control Metaphor for the People, Ideas & Objects Preliminary Specification. It is part of the Oracle Fusion Middleware product offering and as such is part of their Java Enterprise Server. Therefore we are able to build off the functionality that exists and enhance it with the user community's needs. Building off of the functionality will be somewhat limited as many of the concepts that are inherent in the MCCM are already captured in the Oracle Identity Manager.

Oracle Identity Manager is a highly flexible and scalable enterprise identity administration system that provides operational and business efficiency by providing centralized administration & complete automation of identity and user provisioning events across enterprise as well as extranet applications. It manages the entire identity and role lifecycle to meet changing business and regulatory requirements and provides essential reporting and compliance functionalities. By applying the business rules, roles, and audit policies, it ensures consistent enforcement of identity based controls and reduces ongoing operational and compliance costs

Oracle Internet Directory and Oracle Virtual Directory product offerings are up next. A little off topic but Oracle Internet Directory is a relational database derived directory server. That Oracle is providing the marketplace a directory server based on relational database technology speaks to the power of their relational database. They claim they have the performance for two billion users. I see advantages of using this product over their traditional directory server and have therefore selected it for the Preliminary Specification. It will provide us with some flexibility when we ask some of the comprehensive and demanding questions of the technologies.

Oracle Internet Directory could be deployed as an industry wide, and by that I mean oil and gas and service industry wide directory server. There it can integrate with the information that is held in other Oracle products, such as Oracle Identity Manager which would be deployed at the producer firm, Joint Operating Committee and service industry representative level. I think we could provide large volumes of information consisting of everything that exists in the industry. The producers, service industry, Joint Operating Committees, the people who work within the industry, etc. Because this is a database we have some interesting opportunities here.

And Oracle Virtual Directory may be the beginning of optimizing the relational database opportunities. So what we will have is a global database of names within the Oracle Internet Directory and these will relate to the information contained with Oracle Identity Manager and other applications. What Oracle Virtual Directory will provide us with is a seamless way in which to browse, and for applications to see, these datastores as one.

Within the Preliminary Specification we want to access the contact information of the people or firm that provide services or products to the producers or Joint Operating Committees. As we indicated we want the individuals and service industry providers to maintain their own contact and basic data. These will be maintained in the Oracle Internet Directory for each and every producer or Joint Operating Committee to access the most recent and up to date information. This will save an immense amount of time on behalf of the producers and Joint Operating Committees, as well as the individuals and service industry providers. When looking for someone the search capabilities will be significant as we have added the “Vendor / Supplier Contact Database” and the “Actionable Information Interface” to this base data in the Resource Marketplace module.

Now we want to look into Oracle Identity Analytics as part of the Security & Access Control module of the Preliminary Specification. The primary purpose of this application is to provide governance over the access privileges granted to the users of the People, Ideas & Objects application modules. Many of the functions and processes that are provided in Oracle Identity Analytics are either necessary or of significant value that it has been included in the Preliminary Specification.

The first area is the “why and how” of the users access. Providing documentation of what information was accessed by what users and if any of the access violates any of the established policies. Ensuring that data access by users is compliant with the corporate and application policies, that users are not unnecessarily being abused by overtly secure systems and overall good corporate governance is achieved. All of the data that is collected during data access, that is the “why and how” of the users access. Is compiled in a “Data Warehouse” for further analytical analysis and querying. This will help to show trends and usage patterns that will form new policies and procedures and security provisions.

Another useful function within the Oracle Identity Analytics application is the Segregation of Duties feature. In many areas of a corporation, certain process functions must be undertaken by specific individuals and in some cases different individuals. This feature provides for that assurance. It is also Sarbanes-Oxley compliant. This is important when the Joint Operating Committee is small, as we mentioned the other day. And we have to assign many roles to a few individuals. This application will ensure that the processes provide the appropriate governance is maintained by segregating the roles that need to be kept apart for compliance purposes.

There is a comprehensive and customizable dashboard interface for the users of the Oracle Identity Analytics software to analyze the data and particularly the data warehouse. Filled with reports and data that an effective user can use to determine where and how the People, Ideas & Object producer client might be susceptible to access control violations.

The last feature that I want to highlight is what Oracle calls their Role Lifecycle Management. This provides the Oracle Identity Analytics user with the ability to do “what if” analysis in terms of the implications to identities and roles within the People, Ideas & Objects application. It also contains a role change approval process, role versioning and a role rollback feature. These will be needed in determining and maintaining the Military Command & Control Metaphor.

We now step down from the Oracle Fusion Middleware layer to the actual Oracle Database for some of the security features that we seek. The first product in this stack is Oracle Advanced Security. It provides the authentication, and encryption of both the database and the network activity. It is possible, and I highly recommend that all the data and information that is used in the People, Ideas & Objects application modules be encrypted in the database and on the network. This increases the load on the systems and will require additional effort in terms of key management, however, I think the nature of the data and information and the manner in which the applications are provided, a “cloud based” solution, this level of security is necessary.

Oracle Audit Vault is another product that I recommend for the Preliminary Specification. It provides a central location and management of the audit information for compliance purposes. Giving our users the ability to manage the data, information, privacy policies and security. Oracle Audit Vault is also Sarbanes Oxley compliant.

This next Oracle product is a definite addition to the Preliminary Specification. Oracle Label Security will work in many different ways within the modules however here is how I see just two examples. What the application does is designate certain individuals with higher level security clearances. It also designates certain data fields with certain levels of security clearances. Those with high enough security clearances and appropriate authorizations are then able to read these database fields. Within the People, Ideas & Objects application we want to make sure that the reserves, accounting information and strategy discussions of each producer firm remain confidential to a select group of individuals within that firm. With Oracle Label Security that is possible. We also want to ensure that the appropriate people within the chain of command in the Military Command & Control Metaphor have access to the appropriate materials to make the appropriate decisions. This will allow those individuals to have access to these materials without making it available to everyone in the chain of command.

Although not that pertinent to the users of the People, Ideas & Objects applications we have also included Oracle Configuration Management, Oracle Database Firewall and Oracle Database Vault as part of the Preliminary Specification. These will help to keep the applications and the Oracle Database running as they should. Oracle Configuration Management will determine if there is a change in the configuration, either a patch, or if something has gone wrong it will correct itself back to the specified configuration. Ensuring that what is promised to the users of People, Ideas & Objects is what is provided. Oracle Database Firewall ensures no SQL statements that are inconsistent with the users or applications are passed through to the database. And Oracle Database Vault provides the ability to have only certain IP addresses or users to run certain SQL commands and to lock databases from having any operations being conducted on them.

Backing up your data and information are two of Oracle’s strengths. They provide excellent tools for this in Oracle Secure Backup. With the database being encrypted it is interesting that the backup is of the encrypted database. What we will need to do in the Preliminary Specification is to determine in great detail what precisely will be the backup strategy that will be used for the People, Ideas & Objects application.

Lastly there is Oracle Total Recall. A product that helps in accessing historical data. Oracle Fusion Applications provides some interesting solutions with respect to how they handle legacy applications and we will get into those as we proceed through the Preliminary Specification.

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.

Access, Roles and Responsibilities

This topic discusses the manner in which authorizations, roles and responsibilities are handled in the Security & Access Control module of the Preliminary Specification. We should also discuss, the topic of delegating the authority and responsibility during absences, which is something that can come up at any time.

As background we should recall that each individual would have different access levels and authorizations in terms of access to the People, Ideas & Objects systems. Assuming different roles and responsibilities would impose different access levels to data, information, processes and functionality. On top of that, the Security & Access Control module is the key module for imposing the Military Command & Control Metaphor throughout the People, Ideas & Objects application modules. This structure, particularly in a Joint Operating Committee, would work to weave the multiple producer firms under one chain of command. It would also need to provide an interface to ensure the coverage of all the processes were “manned” to ensure compliance, governance and overall completeness of the process.

Throughout the Preliminary Specification there is the perception of a heightened role for technology in terms of enabling the authorization to conduct operations within the system. That is to say the ability to do things and get things done is through the collaborations with partners and to authorize actions through participation in the processes managed by the systems. This participation dictates that the designation of the roles in the Security & Access Control module “means” more than just data access; it also imputes authority and responsibility to undertake actions on behalf of Joint Operating Committees and / or producer firms.

It would also be necessary to be able to assign this authority within the Security & Access Control module during any absence. If someone with authority and responsibility were to be away for whatever reason, they should be able to assign their authority to another person to fill that role while they are away. This will ensure that the process isn't held up during their absence. Delegations of authority have been used for years in larger firms and with a system that imposes the authorizations and responsibilities on specific roles, the ability to temporarily move them down, across or up the chain of command is a necessity to keep the organization functioning.

Lastly we should talk about the interface that helps to identify the missing elements of a process. It would simply show the command structure of the people who are assigned to a Joint Operating Committee or to a process and their related role, authorizations and responsibilities. If someone was to be away then it would show who was taking over their role. It would also help to identify how you could impose the chain of command to fill the void of any vacancies. This would be particularly important if the role or process was needed to be documented for compliance purposes.

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.

The Military Command and Control Metaphor

People, Ideas & Objects development of the Military Command & Control Metaphor (MCCM) of the Security & Access Control module is not without some historical context. Before the hierarchy, which I perceive as somewhat of a commercial development of the 20th century, there was only the military structure in terms of large organizations. The main difference between the two is rather subtle but significant. The military structure is much broader and flatter than the hierarchy. That is one of the ideals that we are seeking, but the more important feature is the ability for the chain of command to span multiple internal and external organizational structures.

If we analyze the U.S. Military we find a number of interesting attributes of using the military chain of command that will provide value in the use of People, Ideas & Objects software applications. First is the title and assignment of an individual in the military.  For example, “Sgt. Richard Knuth, Company A, Brigade Special Troops Battalion, 3rd Heavy Brigade Combat Team, 3rd Infantry Division.” A similar title and assignment for the people within a Joint Operating Committee (JOC) would help to clarify the role and responsibilities, authority and capabilities the individual would have within the JOC. For example this individual might have the following “Richard Knuth, Chief Engineer, Field Straddle, Elmworth. Irrespective of which firm this individual is from. Each of the participants, and the People, Ideas & Objects system, would recognize that the authority of a Chief Engineer was the same throughout the industry and that the designation of Chief Engineer entitled the individual to authorize the appropriate actions.

Now this is not fundamentally different from how the industry operates today. What is different is the ability to operate in a fashion where the interactions between the producers in the JOC are done as if they were all employed by the JOC. Where multiple producer firms are contributing many full time staff to the JOC. This interaction between producers through the JOC can only be replicated if there is a recognizable chain of command between the firms that make up the JOC. In addition to the recognizable chain of command each organization must have additional governance concerns handled, and compliance plays a big part in this as well. (We will talk more about these in the Compliance & Governance module.) That although it would be an easy thing to implement from a people point of view, the actual implementation of pooling the staff from multiple organizations becomes complex when we consider all of the implications. However, with the Information Technologies that exist today, and the issues of the shortages of earth science and engineering talent we have few choices but to pursue this pooling concept.

The nature of the people that will be working through the chain of command that is layered over the Joint Operating Committee will include all of the disciplines that are involved in the oil and gas industry. The contributions of staff, financial and technical resources will include everyone that is employed by the industry today. I can foresee many of the office buildings being refurbished to accommodate the staff of a single JOC. There the staff from the different producers would be seconded to work for the JOC, working at a single JOC not at any particular producer firm.

In previously discussing the Military Command & Control Metaphor (MCCM). I noted this inter and intra organizational use of the MCCM was similar to that used by NATO. That armies of the various countries could work together and recognize personnel from each other's armies and immediately recognize and use the same chain of command. The Joint Operating Committee is the financial framework of the industry. This means that all of the members of a JOC are equally driven by their financial interests. And that financial interest drives consensus. The point in using the NATO example is to show the ability to recognize the chain of command spanning multiple producer organizations represented in the JOC.

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.

Two Types of Data

In this second post of the Security & Access Control module we discuss the two types of data that are found within the oil and gas industry and how People, Ideas & Objects Preliminary Specification deals with access control and the security of that data.

When we talk about the various people within the producer firms affiliated with a Joint Operating Committee. And the number of Joint Operating Committees that a firm may have an interest in. And the number of people a firm may have employed. Access control becomes challenging. It becomes a challenge when you consider that your people certainly should have the access that you require, but the level of trust that you may have with respect to the other partner organizations is probably not as strong. That is to say, does using the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer, open the producer firm to any data loss to its partners? This is how People, Ideas & Objects deal with the access and trust issue in the Security & Access Control module.

When we concern ourselves with the data and information of the producer firm, and the information that is cleared from the various Joint Operating Committees that the oil and gas producer has an interest in. We can all agree that this information is proprietary and is subject to the internal policies of each producer firm. (Information such as reserves data, accounting information, internal reports and correspondence, strategy documents.) What we are also concerned about is the information and data that is held in the Accounting Voucher module and the associated data that is common to the joint account. (well file, agreements, production data, capital and operating costs, revenue and royalties.)

Closer analysis of these two types of data and information that are held within the firm and the Joint Operating Committee fall within the proprietary and partnership domains. In Canada at least, most of the data and information regarding a wells operations can be freely obtained through various regulatory agencies. Nonetheless, the majority of the data is shared through the partnership who have an interest in the data and information. Not so for the producer firms data. Most of the information is kept close at hand and is only reported through filtered reserve report summaries and annual reports. Therefore keeping a handle on proprietary data, while operating the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer, as proposed in People, Ideas & Objects, does not present any data leakage.

Access control can therefore be limited by precluding any company personnel from viewing any other companies files. Which is a given. While in People, Ideas & Objects access control is limited to the Joint Operating Committees of the firm and the firms files only. To extend this further we would have access control limited to the appropriate roles within the firm, then it is a matter for the user community to define a standard set of generic roles in which access is required to certain data types. This would also apply to the types of operations that can be handled by that role, for example, read, insert, update, delete. These generic roles could then be assigned to each individual within the organization based on their needs. Assigning multiple roles for more complex access. Access to your proprietary data would be for your company’s personnel eye’s only.

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.

The Right Information to the Right People...

As promised we now start with our review of the Preliminary Specification and we begin with the Security & Access Control module.

What we have with using the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer. Is the interactions of many producers, service providers and suppliers who are involved in the day to day commercial and strategic concerns of that Joint Operating Committee. What we need to concern ourselves within the Security & Access Control module is that the right people have the right access to the right information with the right authority at the right time and at the right place.

Throughout the Preliminary Specification we discuss two of the premier operational issues of the oil and gas industry. Those being the demand for earth science and engineering effort is increasing with each barrel produced. This is best represented in the steep escalation of the costs involved in the exploration and production of oil and gas. At the same time the critical earth science and engineering resources are somewhat fixed and are difficult to expand in the short to medium term. Add to that, an anticipated retirement of this brain trust in the next twenty years, and the problem becomes of critical concern. The second issue regards the manner in which the administrative and accounting resources are organized within the industry. With the Preliminary Specification the need for each producer to develop their own administrative and accounting capabilities internally is replaced by an overall industry capability. Then each producer can access those resources on a variable basis with direct charges to the Joint Operating Committee. This provides operational flexibility in how a producer approaches their strategic and tactical needs.

There are few short term solutions to the short fall in geologists and engineers over the next twenty years. It takes the better part of that time to train them to operate in the industry. What we do know are several “things” that are being applied in the People, Ideas & Objects Preliminary Specification. Key to a number of concepts application are what we call the Military Command & Control Metaphor. Which is a method developed in the Security & Access Control module of imposing command and control over any and all Joint Operating Committees, working groups, producer firms, service providers or organizations the producer may need to add structure to. The concepts are the further specialization and division of labor, and a reduction in the redundant building of capabilities within each oil and gas producer, or as we describe it, a pooling of resources in the Joint Operating Committee.

The first concept of specialization and division of labor is well known as a principle of economics that brings about greater amounts of economic productivity from the same volume of resources. Given that the volume of earth science and engineering resources are known for the foreseeable future, specialization and the division of labor will provide us with a tangible means in which to deal with the productivity of the oil and gas industry. In today’s marketplace to approach a heightened level of specialization and division of labor without the use of software to define and support it would be downright foolish.

The pooling concept is the solution to the current desire that each producer firm acquires the earth science and engineering capabilities necessary to deal with all the needs of their “operated” properties. This creates unneeded “just-in-time” capabilities for the scarce scientific resources. When each producer within the industry pursues this same strategy substantial redundancies are built into the industries capabilities. Redundancies that are left unused and unusable. What is proposed through the People, Ideas & Objects software application modules is that the producers operational strategy avoids the “operator” concept and begins pooling their specialized technical resources through the partnership represented in the Joint Operating Committee. That way the redundancies that would have been present in the industry can be made available to the producers and used by the producers through an advanced specialization and division of labor.

These same principles are present in the second issue noted above. The administrative and accounting acquired through an industry wide capability provides the producer with the flexibility to address the operational concerns of the firm. Issues such as today’s low natural gas prices are able to be addressed through this revised structure. By having the administrative and accounting service providers charge their service fees directly to the Joint Operating Committee. The producer gains the ability to shut-in production without any negative effects on their financial performance. All administrative, accounting, and production costs are eliminated during production shut-in. And the producers are then able to keep those reserves available for the time when production will provide for profitable operations. Natural gas prices will have less volatility as a result of producers removing the marginal production from the marketplace.

Being able to provide the service providers with systems access and security during these day to day operations will be a unique situation for the oil and gas producer. The service providers will be aggregating data on an industry wide basis. And there will be many service providers involved in providing administrative and accounting services to the producer firm and Joint Operating Committees. Consideration for the proprietary nature of the information and security will be priorities for the Preliminary Specification.

A quick note on mobility. People are being provided with new devices that enable them to do their work anywhere they might be. These phones and tablets, in addition to laptop computers, open up security and access control concerns for the innovative and profitable oil and gas producer. Some producers are enabling their staff with policies that allow them to bring their own device to work. The fact of the matter is these devices provide for enhanced productivity and are appropriate for the innovative and profitable oil and gas producer. People, Ideas & Objects Preliminary Specification includes within it an understanding that these devices will be part of the day to day that are used in the oil and gas industry.

What these concepts require therefore is what the Security & Access Control module is designed to provide. The system must provide access to the right person at the right time and the right place with the right authority to the right information. With the Military Command & Control Metaphor there will also be a manner in which the technical, and all the resources, that have been pooled from the producers, interact with an appropriate governance and chain of command.

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.