Showing posts with label software. Show all posts
Showing posts with label software. Show all posts

Tuesday, May 27, 2014

Industry Specific ERP Systems

Modern miracles like the decentralized production model work because they are developed for the oil and gas industry. Just like SAP’s success in manufacturing is so strong. But don't take SAP’s success in manufacturing as the reason that it will succeed in oil and gas. And don't take the Preliminary Specification and expect it to do anything in the manufacturing sector. ERP applications need to be developed specifically for the industry that they operate in. The one size fits all type of ERP software product that is used to limited success currently. Is no longer capable of providing value to the dynamic, innovative and profitable oil and gas producer.

For Ford and GM there is no choice as to which system you want to operate with. SAP was designed and built for a major tier 1 manufacturer such as they are. What it does is schedule and manage the tier 2 and tier 3 manufacturers to bring their supply chain in line with Ford or GM’s needs. All that Ford or GM have to do is say they want a red truck to be built and the purchase orders for all the parts are distributed to all the manufacturers that build those parts and they are brought to the assembly line exactly when they are needed to build that truck. SAP does this with a precision and ease that make it their business in any manufacturing environment of size and scale. This is where they dominate and are the defacto standard ERP system.

At the same time SAP, which is the standard ERP system in the oil and gas industry, has essentially nothing to do with what happens in the oil and gas industry. Oil and gas is somewhat remotely related to a manufacturing process. Or it could be suggested that might have been the case in the past. And therefore elements of the SAP application might have been able to be retrofitted. With what I assert, the dynamic, innovative and profitable oil and gas producer needs, is the focus on the sciences on a go forward basis. And therefore the ability of SAP to deal with the needs of the oil and gas producers demands in the future are lost due to their focus on the tier 1 manufacturing capabilities.

At the same time it would be inappropriate for People, Ideas & Objects to market the Preliminary Specification or the decentralized production model to the likes of Ford or GM. Systems today have unique attributes that are industry specific and once outside of that industry, those software attributes are counter to the interests of any the other industry.

We may see what People, Ideas & Objects are imputing in their offering coming about in other industries in the next few years. What we are imputing is a homologation of the industry on one ERP system. And in the case of oil and gas that one system is People, Ideas & Objects Preliminary Specification hosted in a cloud computing configuration. With the capital costs of development, the focus necessary to complete the developments, high levels of inter-company interactions and the advantages of standardization. Competition in the ERP systems space will be between industry specific players with intra industry competition being a thing of the past.

Some would disagree with me on the viability of a model based on the ability to compete within an industry as a sole provider. Those that would disagree should be reminded that it is the Intellectual Property of the Preliminary Specification that is the source of competitive advantage that is used by People, Ideas & Objects. The ability and capability to circumvent that IP doesn’t exist in the marketplace. Therefore making the scenario that I have sketched out here the more probable one for the 21st century.

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. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Wednesday, January 30, 2013

Software Development Capabilities


One of the key capabilities that the innovative oil and gas producers will gain through participation in People, Ideas & Objects is its software development capability. In the 21st Century the need to meet changing conditions requires that your organization adapt. The problem with software is that it defines and supports an organization The software therefore has to make these changes before the organization can change. When you employ applications such as SAP you have little opportunity for changes in the software, and therefore have an unchanging organization. People, Ideas & Objects is a software development capability that is focused on change, that supports a dynamic and innovative oil and gas industry.

If we look at the business model of the various software providers we see a fundamental difference in the People, Ideas & Objects business model. SAP and others provide a software sale and support type of business model that has the producer pay for the majority of the software up front. Each year they pay a maintenance fee to keep the software up to date. This model does not provide for any change in the business. The SAP software application is the same that is sold to businesses around the world. It is a poor system for oil and gas. Any changes to accommodate the needs of the oil and gas industry have to be customized by the individual producer at their additional costs to the license fees. Software is not a key competitive advantage of the innovative oil and gas producer. SAP is also not oriented to change in their code as a result of their code structure and their customer base. Any changes to their code require extensive testing and engineering and redeployment to thousands of their customers. A costly undertaking that does not generate any revenue above what is already contracted for under the license agreement. This business model is what is considered the most successful in the oil and gas industry, from a producer's point of view.

People, Ideas & Objects business model is focused on change. Producers subscribe to the community and participate by paying the annual fees defined in the Revenue Model. Software development costs, because they are oriented to the oil and gas industry, are amortized over the entire People, Ideas & Objects subscribing participant producers. These fees support the software development, hardware infrastructure and user communities on an annual basis. The software is provided as a free service to the user community. Only producers who are subscribing participants will have accounts. This business model is focused on change within the oil and gas producer organization as defined in the Preliminary Specification. An integrated oil and gas solution built for the 21st Century.

Having this software development capability as an overall industry capability will be necessary for the dynamic and innovative oil and gas producer. As the producers organizations evolve the software will need to evolve first, because organizational change is more deliberate now that we are so dependent on software. If we don’t take control over the means of software’s production, then we can’t take control over the means of the production of oil and gas. Software play’s that important of a role in our lives today. From defining and supporting a more sophisticated specialization and division of labor, to enhancing greater collaborations. Software such as that defined in the Preliminary Specification is necessary for the industry to evolve.

The Preliminary Specification provides the oil and gas investor with the business model for profitable exploration and production. 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.

Wednesday, January 05, 2011

Solution Providers, not Change Agents

In our post yesterday we noted that change was what ultimately generated our revenues, and that is the case. However, that does not mean that People, Ideas & Objects are the change agent in the energy industry. Nothing could be further from the role that we will be assuming. For People, Ideas & Objects to be successful, we need to be the solution provider for the changes that industry implements. There is not enough energy in the universe for a third party to exercise change within the oil and gas industry and we will not be the ones to fall within the belief that we could exercise that change.

It is now time for producers to act. Review of our Revenue Model will inform producers how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

Tuesday, January 04, 2011

Constraints and Opportunities

Yesterday’s post noted that the start-up software developer, as well as the established SAP and other software vendors, need to provide a comprehensive and compelling vision of how they propose to resolve the issues that producers face in the oil and gas industry. And that only People, Ideas & Objects have provided a comprehensive and compelling vision with the publication of the Draft Specification and the supporting documentation contained within this blog. People, Ideas & Objects vision is an opportunity for the oil and gas producer community to approach resolving its issues in an unconstrained manner.

We have talked about some of the constraints that are inherent in the software business on this blog before. And today I want to reiterate the two that are the greatest impediment to change in the software offering provided by the software vendor. Those two constraints are the software vendors customers and the software code itself. These are the two main causes of failure for most software companies in meeting the needs of their software users.

Simply, changes to the software code are the greatest costs to the software vendor and do not generate any unique revenue streams. Therefore changes are resisted by the software vendor; propagating any of these software changes to the population of customers and users escalates the costs of any change. Is it any wonder that these applications have remained static for all those years.

These and other forces have cemented the existing “established” software vendors offerings in concrete. An innovative oil and gas producer, as documented here in this blog, needs to have the agility in decision making processes and follow through with the appropriate processes that support innovation. These begin with the appropriate organizational structure supported by a dedicated software development capability.

By employing cloud computing and a cost plus software development model People, Ideas & Objects are structured to support the changes in the producer. We are motivated by change, designed to change, accommodate change, and change ultimately generates our revenues. Providing a change oriented software development capability is the purpose behind People, Ideas & Objects.

It is now time for producers to act. Review of our Revenue Model will inform producers how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

Monday, November 29, 2010

Oracle Changes the Game

Last week we saw a game changing decision in the Oracle vs. SAP court case in California. A court decision in which Copyright and Intellectual Property are upheld as the key to the software business.

People, Ideas & Objects has been based on the Copyright and Intellectual Property of the Preliminary Research report of using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer. This original idea has been developed further in this blog and applied in the development of the Draft Specification. Intellectual property that is original, pristine and designed to solve the issues that exist in the oil and gas industry.

Customers of software vendors need to have their software applications with this level of Intellectual Property and Copyright pedigree. I am pleased to be able to provide our potential oil and gas customers with this high level of assurance of Intellectual Property.

Thursday, August 05, 2010

Our Revenue Model Part VI

Throughout the past few months (here, here and here) we have talked about the risks of becoming blind sleep-walking agents of whomever will feed us. An issue when we are discussing systems development. People, Ideas & Objects Revenue Model shows these risks are real and require a new approach to funding these software developments. It serves no ones interests, People, Ideas & Objects, the Community of Independent Service Providers, Users or Producers to proceed without dealing with this issue. It is best to identify these conflicts and compromising situations now, while the influences are manageable.

Producers are expected to fund the software developments on the basis of their production profile. Rental fees are assessed on all producers starting January 2010. This eliminates the possibility that some producers will pay disproportionate shares of the development costs. All producers will be required to have their rental fees, and penalties, paid in full from January 2010 to the current year in order to access the applications. These methods and penalties eliminate all incentive to delay and avoid financial participation by producer firms.

Financial participation is how the communities are supported and hence able to avoid the trap of becoming blind sleep-walking agents of whoever feeds them. People, Ideas & Objects are user focused developments. The choices that a software development project can prioritize are many. Users are one, technical efficiency another and there are many other possibilities. For users to support the producers focus on its competitive advantages of their asset base, oil and gas leases and earth science and engineering capabilities. Users need to have the software tools and means of production, (the financial resources to build those tools) within their control.

This discussion does not preclude the producers participation in these communities. Producers, on the contrary, are critical elements of the user community. These developments will need their full participation and contribution. What is necessary to proceed is the appropriate “political environment” in which users are able to define, build and use the software tools they need to do their jobs.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As economic development has proven, reorganization would achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

Monday, July 12, 2010

Asynchronous Process Management Success

One of the cornerstones of the People, Ideas & Objects “Technical Vision” is Asynchronous Process Management (APM). I have described this type of functionality as it relates to communications, as a phone call is synchronous, and a letter would be asynchronous. The letter provides the communicator time to interact more deeply and to contemplate the response more thoroughly. Applying this communications metaphor to Process Management is directly applicable.


In a recent post we discussed the scenario around the timing of the voting and implementation of a plan to increase natural gas production. Where the participants within a Joint Operating Committee were asked to vote on a prescribed course of action. The description in that post imputed the implementation of the plan would be immediate, during the virtual meeting. In the real world, there would need to be time for each participant to consider their decision. The ability for participants to take the time to think what their next action will be, and based on those actions, implement and complete the appropriate management of the earlier initiated process.

Technology has expanded significantly in the past ten years. Particularly with respect to having multiple threads and multiple cores of application processing. Simply defining when an applications process can be broken down into multiple steps is easily handled by the developer and today’s advanced compilers. The problem with this processing is that the timing of each operation is unpredictable and therefore the sequence of when the program will be completed is random. In the oil and gas situation where partners were voting on a proposal for further operations, those operations would not be able to be commenced until the voting was completed, or adequate votes in the affirmative were received.

Today, the software developer has tools that provide the ability to control the timing of dependent processing in the software. This opens the world of systems development to higher levels of performance, processing tasks in parallel shortens the processing time required, and allows for advanced Asynchronous Process Management such as the People, Ideas & Objects technical vision.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.


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Monday, September 07, 2009

Changes in Information Technology.

Around this time of year I like to review the state of the Information Technology marketplace from the perspective of the technologies we will be using. First off has to be the Java environment. Although I don't know how the Oracle acquisition will affect Java, we can assume the following. Oracle's purchase of Java makes their technologies stronger, much stronger. I would think this may help in resolving one of the bigger technological issues that exists today. That is the relational vs object relational design theories. Many assume that object relational is the way to go, yet, continue to run into the same problems. It will need the resources of Oracle and Java to resolve this problem and come up with a more complete solution. It is in my opinion the only technological issue that we face in People, Ideas & Objects.

The second assumption we can make about Oracle's acquisition of Java is the technically superior capabilities. I found that Sun was excellent in coming up with the big idea and could out think any firm in making the best technologies. However, I often wondered if these people ever took out the garbage. At times it seemed people were working on the big problems and no one was minding the store. I say Oracle's technological capabilities are superior from a commercial point of view. Oracle sells good products that are state of the art. A difference I see that is fundamentally different then Sun's.

Java as a technology has leaped onto center stage in the marketplace in the last couple of years. With no real competition from any other development technology Java dominates. From Google's almost exclusive use to each and every open source project, Java is technically capable and scalable. The Java Run-time Environment is robust when we include the many frameworks and the human resources that support them. Powerfully exploiting the re-use of Java code. Standing on the shoulders of giants never meant so much as it does when it comes to Java.

Lets not forget the underlying model of deployment of Java is to run it everywhere. And here it has done a good job from its early days. Now with the development of "Cloud" computing this deployment model fits with the users needs. Irrespective of how you access Java, it works extremely well. The Cloud as a platform is also receiving attention these days. For good reason. It works, but most importantly it works to release the users from the chains of the "office" environment and permits them to do their job as required, where ever and when ever. 

We are witnessing, I think, the maturation of the underlying technologies. The infrastructure is in place and less time and effort will be spent in these areas. Its time for developers such as those involved in People, Ideas & Objects to start putting these frameworks together and applying the unique and innovative attributes of these technologies in a package for users to do their jobs. What could have been done with 100 developers five years ago can be done with far less. Productivity is soaring at the infrastructure level and this is percolating upwards towards the end users. I have a tendency to agree with many that Information Technologies will be a source of innovation and value generation until well into the 2020's. Most of what we have been doing in IT in the past 40 - 50 years is building the infrastructure. The Information and Communication Technology revolution begins here and now.

For the oil and gas industry this is the time to consider these technologies as the point in which  their competitive advantage, innovative footing and exploitation of these resources should be a key focus of the producers. That is what People, Ideas & Objects is working to provide the global oil andg as producer. By facilitating the oil and gas user with the development technologies and resources to enable them to do their jobs. In turn the People, Ideas & Objects user community will provide the oil and gas producer with the most profitable means of oil and gas operations. With innovative modules like the Petroleum Lease Marketplace, Accounting Voucher and Partnership Accounting. Three of the eleven modules of the Draft Specification.

Of the many people that I follow and write about on this blog. Ray Kurzweil is one of the more interesting and he provides an interesting perspective on the changes that these Information & Communication Technologies provide. His key point is that people think in linear terms when seeing the future. Using the pace of change from their past experiences to extrapolate the impact these ICT will have on their future. Proving that the future is always exponential in terms of its impact is the point that he gets across. Here is Kurzweil's TED conference video.

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Tuesday, January 27, 2009

Users. The 5 w's and how.

Yesterday I highlighted an article from McKinsey regarding the rebels that are needed to overturn the poor non performing bureaucracy. Establishing that one of the objectives that I am trying to meet for 2009 is the recruiting of 100 "users" for extending the Draft Specification into the Preliminary Specification. I thought it might be worthwhile to clearly identify what I think these people will do, and answer some of the questions that may be asked. First of all the community of people that read this blog on a regular basis are here for a reason, and that first and foremost means you may be interested in further exploring what needs to be done and how you could fit into the community.

I want to reiterate the terms of these first 100 individuals by defining what is expected of them and what is required. The first item of business will be to review the process of how they join the community. Special emphasis should be placed on the summary submission of your contribution. This should include how you expect to extend your organization as a key or cornerstone "Community of Independent Service Provider".

Why will these people join?

They know in their hearts that the current system is not working. That the need for the industry to move to a higher level of performance is necessary, and they have ideas that will make a difference.

Who are these people.

People who have worked in oil and gas for at least 5 years. Engineers, earth scientists, administrators, accountants, developers and generalists. People who are from the oil and gas companies, investors in oil and gas, government agencies and the service industries that depend on the energy industry. Anyone who can trace their salary or revenue from the energy industry as a whole. The focus is the Joint Operating Committee and therefore is limited to the up-stream end of the business.

These are people who are looking to establish their own service based offering to the oil and gas producers. This will be developed by using the People, Ideas & Objects software applications they build here, and use to deliver to their client producers. This is a business opportunity to the first 100 individuals that sign up. This is not an exclusive arrangement, it will be offered to everyone that joins the development. It is just these people will be the first 100 and will therefore have access to the knowledge and understanding to establish a service based offering.

Where are these people located.

From all corners of the world. One of the Preliminary Specifications deliver-ables is to determine the geographical scope of the application. I have set the minimum to be North and Central America. However, the demand for this type of application is universal and needs to consider the many voices who are part of the global oil and gas industry.

When are these people needed.

Today! Ideally we should have the full complement of 100 by this time next year. They will then undertake to establish their own guidelines, organization framework and deliver-ables. The scope of their undertaking is to set in motion the minimum required application functionality and process management.

How are these people going to do their job.

I have purposely left the Preliminary Specification as a blank slate. Although I expect the Draft Specification to be used as the initial input, there may be better ideas out there. These should be considered at the earliest possible time. The method that this will be done is through the collaborative environment established through the Google Apps for People, Ideas & Objects. This environment currently has many tools and is more then capable of providing what is necessary for these people to work throughout the world from their office and their home.

That's correct. I don't expect anyone to lose or have to quite their job while they are making this critical investment in the software or their service based offering. All of the activities in the Google Apps for People, Ideas & Objects are encrypted via https. Your boss will only know of your activities if you show them, or they too are members of this community.

What will they be doing.

Assessing what is possible and probable. What is the first commercial release of the application going to need and how will it attain that. What needs to be done in the client producer's to make the application available technically and business wise. In short answering a lot, if not all of the "what" and "how" questions that are needed to be asked before developers start to build the application.

In summary.

I do not expect to be inundated with a flood of initial contributors. However, these people will need to be of a fairly diverse subset of the industry. The need to have a good representation leads to much of the need for the high number. However, it would be up to those to determine how they organize themselves once they are together. Some people who apply may not initially be accepted. This does not preclude anyone from joining in the second round of recruiting. It is important to remember the second round will be a fully sponsored round, where contributions of both the first 100 and subsequent people will be paid for their efforts of working on this software. Industry has been very slow to pay any attention to this project. In other words $0.00 has been the income to date. And if we wait for them to start funding this development, it will be far to late by then. It is assumed by me that the opportunity to establish your service based offering in this initial round will provide tangible monetary results in the very near future. I therefore ask you to please join me here.

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Monday, January 19, 2009

The end of the paper economy.

I have commented many times about the state of the current global economy. Why do I continue to discuss these economic difficulties? This is a necessary part of the development of this software. The ways and means of the global economy are being transformed to new and more effective ways of organization. Whether that is your belief or not is not something that I am challenging. I am trying to build support for the fact that these economic and organizational changes need to be accepted by every individual that works in the oil and gas industry. Milton Friedman has best captured the point in the following comment.

Now, you never have real changes unless you have a time of crisis. And when you have a time of crisis what happens depends on what ideas are floating around, and what ideas have been developed, and thought through, and are made effective. 
I'd like to think the ideas that I have formulated in the research and writing represented in this blog are some of those ideas that are just lying around. I perceive this time as the point of greatest opportunity for individuals. Our lives will be transformed, if we take this opportunity and run with it, we could achieve more then has been possible in many generations. 

There is going to be a sizable amount of pain as the "old" dies away and the new is formed by trial and error, but mostly frustration. But it will be worth it. What was conceived of as being of value in the past, - paper assets, stocks, bonds, pensions, real estate and retirements - are falling in value and will be not be adequate for our long term needs. What is of value and what can anyone in the oil and gas industry do to participate in this new economy and rebuild their lives?

I think the new economy is going to be based on "rights". Where access too, or ownership of, rights is the basis of how an individual earns a living. At least that is my theory and I'm sticking to it. The right to use the People, Ideas & Objects software is subject to license in which the rights to the ideas of using the Joint Operating Committee are available to everyone who chooses to make a living in oil and gas. These rights and the associated software are provided for free to those who provide services to the oil and gas producer, in their own service based offering. People, Ideas & Objects revenues are sourced by those that benefit from the sales of oil and gas. Oil and gas producers and governments which have the need for the people to manage and organize their assets and provide the most profitable means of oil and gas production. Creating an environment of dependency and mutual support between those that work in oil and gas, the producer companies and government agencies that collect royalties, and the software development process and application itself.

Please, join me here in this necessary and worthwhile cause.

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Monday, December 01, 2008

Information and Communication Technologies (ICT).

Change is over estimated in the short term, and underestimated in the long term, so the saying goes. Technology had a number of days of reckoning in the early part of this decade. A time when the elevators were projected to fail, for a day, and the creation of technologies that appeared to solve the source of all the worlds dog food problems. I was still working in management in the oil and gas industry, and had no compelling reason to join these hysterical technological projects. This software development project is not about the technology for technologies sake.

Today our economy is going through the necessary transition to enable society to move to higher performance metrics. Much of these economic changes will be focused around the elimination of the bureaucratic processes and replacing them with new and more innovative business models and organizations. This transition is driven by the inefficiency of the old ways in which to organize and is contrasted to what is possible in applications like People, Ideas & Objects. Structural organizational changes with today's Information Technology (IT) provide real value generating capabilities and efficiencies.

The economic news continues to surprise on the downside. It now appears that the economy is actually going to slow quite substantially, with many people uttering the D word. If there is a depression, and that is what is necessary to instill the changes in the industries, we are looking at a 5 year turn around. The necessary time to make the changes to the industries to enable the more efficient means to be built and become operational.

The stimulus that governments are now applying is a covert "Quantitative Easing" by the Federal Reserve. This policy, I think, has been put into place to eliminate the possibility of deflation coming into the picture. The Fed has pumped cash, straight from the printing press, into the economy in an unprecedented fashion. The best reading on what is happening is provided by Rebecca Wilder (not her real name.) Her blog post provides two graphs that show the money multiplier is collapsing, and the bank reserves are surging. The latter appears to me to be attempting to make up for the loss of economic activity due to the multiplier effect's decline.

Many people have already been affected by the market meltdown. Reliance on a good job, your pension, mutual funds, stocks and your home now seem to be the wrong strategy. The safe road now seems to have been the most risky alternative. What should someone do in order to deal with this situation. Hedge your bets. If the economy does complete the expected transitions it will be in a new form. One that optimizes the potential of ICT. Where systems like People, Ideas & Objects are built to enable the new economy to prosper. Like this project, none of these applications are built at this time. In many industries there is not even a comprehensive vision of what is possible in the future. I believe I have provided a strong and coherent vision of how the energy industry could operate in the future. And have led the charge to make the systems available to the marketplace at the soonest possible moment. I am unaware of any other alternative to turn too at this time.

For people to change requires that they be disrupted in this violent of a fashion. If we could all realize and act to make the transition seamless we would, but we can't. We must be disrupted to the point where the decision is made not to go to work, and what to do next. For that is the only means of comprehensive change that can be put in place. The reason people will stop going to work is because they know there is nothing there for them. Their next question is "what will I do now." And that is where this project comes into play. People, Ideas & Objects is the future for the oil and gas industry. A place where you will log into work as opposed to drive to the office. A place where the systems based on the vision of the Draft Specification provide the means and manner in which people can do their job in the industry.

These are the facts of the situation today. It would be better if we didn't have to go through these changes but that is not an option. The bureaucracies are unable to provide us with a sustainable way of life. Therefore we must move to build higher performance organizational structures. The upside is that these new ways of doing business will provide for substantially better standards of living then what we were accustomed to in the past.

So we can either hide from the difficulties and ignore that they are happening, or proactively make the transition as seamless as possible by accepting that this is and will happen. And govern yourself in a fashion to optimize the upsides. For oil and gas it is as simple as following the procedure necessary to join People, Ideas & Objects, and limiting the damages to your world. Please join me here.

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Thursday, November 20, 2008

Why at $3.27 it's a buy.

Sun Microsystem stock at today's prices represents the easiest and most cost effective manner in which to make money. At $2.42 billion (Friday November market cap, the company is trading below its cash value. And this post is to show how far they are ahead in providing the types of services applications such as People, Ideas & Objects need.

I have specified an architecture of Sun technologies for the People, Ideas & Objects applications to be run in. (See the July 2008 post here.) Sun has published a white paper that captures the extensibility and flexibility of their products in terms of how the can be configured. For those that are technically challenged I would skip this post now.

Downloading the .pdf is available to those with a Sun account. The configuration discussion talks about the performance and configuration advantages available for the deployment of GlassFish on Solaris. Making the post I made in July 2008 look like the optimal solution that Sun has to offer. This is why Sun will make money in the software future. No other vendor can provide our application with the support and low licence costs. Running GlassFish in some of the configurations using IBM and Oracle would be prohibitively expensive. Not so with Sun.

So their choice was to ensure the developer and user of their software services were able to operate their technologies in the optimal configuration without first having to bankrupt them. Taking the hit in current revenues for the long term. In today's myopic market of this quarter Sun doesn't fit in. In this go forward environment Sun and Apple are the only two companies that I can see making money in the future on technology.

The only change that I would make to the blog post in July is the need to build our own data centres. Using network.com provides us with the resources of a service based offering of processors and support. Processing is too critical a resource not to be under our influence and control. With the majority of the support for our data centers remaining with Sun.

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Monday, November 17, 2008

Transparency & Accountability = Software

Reference readings to the BBC and the Wall Street Journal.

News from the President of the U.S., George W. Bush is that the G20 have made 50 recommendations to deal with the economic meltdown and make improvements. In a Wall Street Journal video he states:

Transparency is very important, so that the investors and regulators are able to know the truth.
And there you have the issue and the solution. In a related posting I suggested that accounting rules for "Mark to Market" should be maintained to ensure what transparency that had been achieved is maintained. As it stands I could not tell you the results are of those discussions in making those changes. A reflection on the the lack of understanding of the source of this issue.

How we get back to the point where the economy is able to function at the level that it was. Is difficult for me to see without the transparency and accountability necessary to ensure that trust is restored. Trust that has been eroded due to the global financial wizards with nothing better to do then invent new and deceitful ways of making money. As President Bush says transparency and accountability will enable the investors and regulators to know the truth.

So how do these two missing ingredients in the economy equal "software". And what does that mean for the oil and gas investor. Who I propose sits at the virtual Joint Operating Committee (JOC) table through the People, Ideas & Objects application modules?

For the oil and gas investor there is going to be the need to have a greater say in the day to day operations of what they own. As the industry transitions from the bureaucracy to the Joint Operating Committee, it is the investor that has a vested interest in making this software application the glue that holds the new oil and gas industry together. This has to be done in order for there to be a future in our societies. Oil and gas is too critical of a commodity to go without, and the software that identifies and supports the JOC needs to be as transparent and accountable to the investors and regulators.

This is done through the open source nature of this project. I don't want this to confuse anyone, the producers that will be using this software will be paying for it. This software is free, but not free in the monetary sense. Free in terms of it being open and available to anyone to review the Java code that the application is built from. And free like a puppy. Where the applications are free to wander and explore the necessary areas that are critical to getting right what is necessary in the industry. Where this wandering is not under the direction of one individual but the needs of the entire oil and gas industry.

Only then can the investor and regulator begin to be satisfied that the operations of the industry are as truthful as they appear. And that is why I will continue to pursue the investors and governments for financial support of these application modules.

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Friday, November 14, 2008

Carliss Baldwin - Mirroring Hypothesis

Carliss Baldwin - Mirroring Hypothesis

A series of 2008 Working Papers has been released by Harvard Professor Carliss Baldwin. (Click here to her page where all ten can be downloaded.) This first paper is "Exploring the Duality Between Product and Organizational Architectures: A Test of the Mirroring Hypothesis." This paper provides keen insight into many of the topics we need to better to understand in developing the People, Ideas & Objects application modules. As discussed in her paper we reviewed here, the mirroring hypothesis was a part of that paper, we now have the opportunity to review the mirroring hypothesis.

Before we begin I want to put forward the Cognitive & Motivational Paradoxes into the discussion as background for the discussion of the justification for radical change of the oil and gas industry, as considered in the Draft Specification. It is suggested in this paper that the rewriting of software applications from scratch has not been done. And I would suggest in the short period of time that software has been used in corporations limits the full scope of our understanding and experience of software. We have also not gone through a comprehensive market meltdown, as the one that we face today, an economic situation that I believe is the result of our inability to make the necessary, wholesale changes to organizations. And as such these changes are not only necessary for the economies to resume their positive attributes, but critical. If as I say in the above referenced blog entry, the constraints of code and customers are too large of a compromise in approaching this situation from an otherwise clean slate. These compromises are too significant to overcome the cognitive and motivational paradoxes. Now lets begin to review this very interesting paper. From a technology implementation point of view, the build up from a blank slate is the easiest approach to providing this value to the industry.
A variety of work has sought to examine the link between a product’s architecture and the characteristics of the organization that develops it. The roots of this work come from the field of organization theory, where it has long been recognized that organizations should be designed to reflect the nature of the tasks that they perform (Lawrence and Lorsch, 1967; Burns and Stalker, 1961). In a similar fashion, transaction cost theory predicts that different organizational forms are required to effectively solve the contractual challenges associated with tasks that possess different levels of uncertainty and interdependency (Williamson, 1985; Teece, 1986). To the degree that different product architectures require a different set of tasks to be performed, this work suggests that organizations and architectures must be aligned. p. 5
Alignment of the Joint Operating Committee's (JOC) legal, financial, operational decision making, communication and cultural frameworks with the compliance and governance which has been the sole domain of the bureaucracy, are what is achieved as a secondary benefit of this software development project. Our primary objective is to move the producer firm from a banking mentality to that which is based on the earth science and engineering disciplines; and to innovative off that base of knowledge. This is necessary in order to provide the energy consumer with the energy they demand. Referring back to the motivational & cognitive paradoxes, I would assert that the industry has been unable to meet the markets demands for energy, and almost all producers production profiles are in decline. This is further justification for the radical redesign of the oil and gas industry that is proposed in the Draft Specification.
While the studies above begin with the premise that a development organization must be designed to match the desired structure of a new product, a second stream of work adopts the opposite perspective. It assumes that a development organization’s structure is fixed in the short-medium term, and seeks to understand the impact on new product designs. This view was first articulated by Conway (1968) and is sometimes known as “Conway’s Law.” He states, “Any organization that designs a system will inevitable produce a design whose structure is a copy of the organization’s communication structure.” The dynamics of this law are best illustrated in Henderson and Clark’s (1990) study of the photolithography industry, in which they show that market leadership changed hands each time a new generation of equipment was introduced.
I italicized the quotation of Conway's Law to highlight the fact that communication in the oil and gas industry is through the JOC. As we have achieved this alignment in the Draft Specification with the JOC's communication structure, the alignment of the organization will be better able to serve the primary (enabling the earth science and engineering) and secondary reasons (the enhanced innovativeness and performance) from this alignment of the industry. This is a material change to the Draft Specification in that the Communication Structure will be added as the fifth framework that the JOC provides the innovative oil and gas producer.
These observations are traced to the successive failure of leading firms to respond effectively to architectural innovations, which involve significant changes in the way that components are linked together. Such innovations challenge incumbent firms given they destroy the usefulness of the architectural knowledge embedded in their organization structures and information-processing routines, which tend to reflect the existing dominant design (Utterback, 1996). When this design is no longer optimal, they find it difficult to adapt. pp. 5 - 6
Again I assert that the reason for the rewrite is that the bureaucracy is unable to make the necessary changes to ensure the producer firms remain innovative and profitable. The inability to adapt to the increased amount of earth science and engineering necessary for each barrel of oil, is the beginning of the end of these bureaucratic organizational structures. I can not see them surviving these changes in the greater economy. And I am certain that the economic meltdown we are currently experience will ensure their demise. That is why we must begin the process of developing the software as described in the Draft Specification.

2.1 Product Architecture and Measures of Modularity

We have purposely defined a modular design structure from the work of Professor Baldwin but more specifically through Professor Richard Langlois. These are accurately summarized as follows.
Modularity is a concept that helps us to characterize different product architectures. It refers to the way that a product design is decomposed into different parts or modules. While there are many definitions of modularity, authors tend to agree on the concepts that lie at its heart; the notion of interdependence within modules and independence between modules (Ulrich, 1995). The latter concept is referred to as “loose-coupling.” Modular designs are loosely-coupled in that changes made to one module have little impact on the others. Just as there are degrees of coupling, hence there are degrees of modularity. p. 6
There is a further rather profound reason for moving to a modular structure. The Java Programming Language is most efficient in a loosely coupled or modular fashion. These have been the design theories that make the language so useful to the business community. As is mentioned elsewhere the secondary advantage of a modular system is that developers are able to focus on one module, as opposed to having to know all of the aspects of the system. This compartmentalization helps the developers and users to deal with the complexity of the system.

6. Discussion

I am particularly proud of the size of this community. It has been many years in the building and each day I am pleasantly surprised by its scope and scale. The most important aspect of this community at this time is their vested interest in this system and particularly their understanding of the basic ideas and issues. When you have this many people following the ideas in this blog, it reflects that we are on the right track. One other important point that may be off topic a bit, but the size of this blog is well over 600,000 words and reflects the basic idea of using the Joint Operating Committee as the key organizational construct of the oil and gas industry. So many words for just one idea. I can not wait to see what this community does with these ideas when they get finished with it. In this next quote Professor Baldwin notes the products architecture is comprised of more then the functions. 
Our results make an important contribution to the academy in several ways. First, they reveal substantial differences in the levels of modularity between software systems of similar size and function. The pairs we examine vary by a factor of eight, in terms of the potential for a design change to propagate to other system components. This result has significant implications for those who must design such systems. It shows that a product’s architecture is not wholly determined by function, but is also influenced by a variety of other factors, including the characteristics of the organization within which development occurs. The space of possible designs within which solutions are sought appears to be constrained by the nature of the context within which search occurs. p. 20
This communities influence on the Draft Specification and the building of this system will be like no other we have seen to date.
We should note that the mirroring phenomenon is consistent with two rival causal mechanisms. The first is that designs evolve to reflect their development environments. In closed source projects, dedicated teams employed by a single firm and located at a single site develop the design. Problems are solved by face-to-face interaction, and performance “tweaked” by taking advantage of the access that module developers have to the information and solutions developed in other modules.

Even if not an explicit managerial choice, the design naturally becomes more tightly-coupled. By contrast, in open source products, a large and widely distributed team develops the design. Face-to-face communications are rare given most developers never meet, hence fewer connections between the modules are established. The architecture that evolves is more modular as a result of the inherent limitations on communication. p. 21
Once introduced to the ideas of this software development project people can begin to see how things fit in naturally. Using the JOC is a very natural way in which the industry operates. The technologies today provide the ability to mitigate the effects of location specific activities. The virtual JOC being the ultimate manifestation of the way in which oil and gas investors can manage their operations.
Alternatively, our observations may be a product of purposeful choices made by the system architects. For closed source products, the sole aim is to develop a product that maximizes performance at a point in time.

The benefits of modularity, given the competitive context, may not be viewed as significant. By contrast, for open source products, the benefits of modularity are far greater. Without a modular design, there is little hope that contributors can understand enough of a design to contribute to it, or develop new features and fix defects without affecting many other parts of the system.

Open source products therefore need to be modular to both attract a developer community and also to facilitate the work of this community. Our data can be explained by either of these causal mechanisms. In practice, both are likely to work in parallel. p. 21
By defining the modular specification we have what I consider the break from the "old way" of doing things. It is necessary for people to see how and where the system they are going to be involved in is going to be different. Without the overall vision of the Draft Specification we may have regressed into the "old ways" without thinking how this system could truly be different. I like to think that the design of the eleven modules makes it difficult to operate in the "old way" as its inefficiencies and frustrations are always in the way.
Our work suggests that managers of the innovation process must strive to understand the influences on their design choices that stem directly from the way they are organized. The challenge is that these influences are seldom explicit, but are a result of the complex interplay between a firm’s normal problem solving and information processing routines, and the space of designs that must be searched to arrive at a new solution. While a firm can look backwards and see what kinds of designs it is predisposed to produce, it is hard to look forward, and imagine what new designs might be possible. The commercial software managers we work with almost always think their designs are highly modular. When shown these results however, they realize how much more can be achieved. pp. 21 - 22
It should also be evident that the constraints (code and customers) and the motivational and cognitive paradoxes be eliminated from the mindset of the community. To do this I have established a very high bar in which participants in this community need to conduct. This does not preclude anyone from contributing, it only seeks to break the ties with the past so that the unencumbered and unconstrained methods of community involvement are optimized to the best solution. The up to 2,500 word essay expects the community member to apply their experience in the oil and gas industry to the specification in its current state. I believe that this is enough of an exercise to truly have the community optimize the solution. And for like minded individuals to find one another on the wiki. (Closed to the general public.)
Our findings have important implications for development organizations given the recent trend towards “open” innovation and the increased use of partners in R&D projects (Chesbrough, 2003; Iansiti and Levian, 2004; MacCormack et al, 2007). In particular, they imply that these new organizational arrangements will have a distinct impact on the nature of the designs they produce, and hence may affect product performance in unintended ways. In essence, our work suggests that R&D partnering choices, as well as the division of tasks that these choices imply, cannot be managed independently of the design process itself (von Hippel, 1990). Decisions taken in one realm will ultimately affect performance in the other. Managers must understand the implications of these organizational choices, in terms of the constraints they place on the solution space.
There is much to do and much to learn in this new project. I can't suggest strongly enough that the future does not include the structured hierarchy in any business operation. That is what is being eliminated in this market meltdown. Our first issue is related to the fact that new organizations are unable to form themselves in productive and efficient ways without the software being in place first. This is why the Baldwin, Lanlgois and others analysis is so necessary to find our way through this future.

Companies today have had the opportunity to change and build this system and they have chosen to ignore it. And that is the expected response. Bureaucracies do not change and it is foolhardy to think so. The change can not be implemented in the manner that is necessary without the complete destruction of the old. To change direction, you must first stop. Does anyone believe that the structured hierarchy will be used in 2025, what about 2015? I suggest it may be sooner then 2011 that we plan to have the retirement party of the last millennium in honor of the bureaucracy.
Our work opens up a number of areas for future study. With respect to methods, we show that dependency analysis provides a powerful lens with which to examine product architecture. While we focus on only a few types of dependency, our methods can be generalized to others, assuming that they can be identified from source code. With respect to studies of modularity, our work provides visibility of a phenomena which was previously hidden, and metrics with which to compare different products. This approach promises to facilitate the study of a variety of important research questions that have previously been answered only via purely descriptive or conceptual work. pp. 22 - 23
Professor Baldwin is on the right track here. Her analysis of transactions was the means in which the Accounting Voucher was developed. With the expressed intent to have transaction design be the area of real value generation in oil and gas. Transaction processing has developed to a reasonably high level such that the ability to differentiate ourselves based on transaction processing does not exist. It is a necessity, whereas using Baldwins analysis and tools provides the means in which to design transactions.

I close with two paragraphs of Professor Baldwin that put in perspective the context of this software development project. This is an opportunity that provides the community with significant ability to make the changes and increase the performance of the oil and gas industry.
Does greater modularity require trade-offs with other aspects of performance? Intriguingly, our work suggests that, in practice, many designs are not at the performance “frontier” where a trade-off exists, but lie below it due to architectural inefficiencies or “slack” (MacCormack et al, 2006). If this is true, there may be scope to improve a design along multiple dimensions without a performance penalty.

Exploring such issues via the measurement of architecture and product performance will help reveal managerial strategies for moving designs towards the frontier. And they will help us understand the trade-offs involved in moving along it. Herbert Simon (1962) was the first to argue for the systematic study of design more than 40 years ago, claiming, ‘…the proper study of mankind is the science of design.’ However, his ambitious vision for the field has proven elusive. The study of design has been constrained by, among other things, limited theory, methods and tools that can deal with the complexity of everyday designs, and more importantly, to make them visible, allowing us to compare their structures. The methods we have developed promise to open up a host of questions that, until now, were beyond our analytical capabilities. p. 23
Please, join me here.
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Monday, November 03, 2008

Software, and Eisenhower's Interstate.

President Eisenhower started the Interstate and Defense highway system in 1956. Many have credited this system with providing a solid foundation of which the U.S. economy has grown. In 2006 President Bush noted:

Today, 50 years after the Federal-Aid Highway Act of 1956 was signed, the Eisenhower Interstate System has made our society the most mobile in the world and contributed to the continuing growth of our economy.
Progressive governments have always had a role in developing the infrastructure for their societies to prosper. This has established a clear line of separation between what is a capital works and private activities.

Today our economies are globalized and very sophisticated. The dependency on others to provide for our needs has never been greater. Most people would agree that the ability to survive on their own for the long term is not a skill that has been developed. Our dependence on one another has never been so great, and therefore, fragile.

I've been harping on a theme in this blog since the Preliminary Research Report was published. Suggesting that SAP is the bureaucracy and the heightened role of software in the oil and gas industry. At times I have felt that this message is not well received, and I attribute that to the Y2K fiasco. Y2K has made software, and the people in the technology business, less influential. Leading to what I would suggest is a patent disregard for the value and significance of the technologies.

I am only realizing myself why this is the wrong point of view for society to have taken. So many of our organizations are failing that we are unable to achieve the reliability that we had achieved and expected in the last 50 years. On Wednesday, I showed up at my regular Starbucks and asked for my usual Venti Mild coffee. They said they were out of coffee. Dumbfounded I said what and struggled to keep myself from waking too quickly.

The concern that I have is these events are happening too frequently to be a random or isolated event. The systems that we have grown to expect are in a state of failure that will only expand as the organizations that we depend upon face one financial Tsunami after another. We need to address these points by building the systems that are replacements to the current systems that are failing. Otherwise we are faced with the prospect of using our survival skills to make due.

The sense of urgency in which we approach the development of our replacement systems is accelerated by the storm clouds on the horizon. On Bloomberg this weekend I saw this commentary that in the day to day of the past fifty years we could never have imagined. Entitled "The Shipping News Suggests World Economy is Toast". Chronicling the slowdown at Volvo, the second largest truck manufacturer in the world, in the third quarter. In the third quarter of 2007 Volvo received 41,970 heavy trucks orders . In 2008 the number was 155. The article also documents how the shipping industries Baltic Dry Index has collapsed. Rendering revenues for ships at 10% of normal. These events were probably triggered way back in August 2007 at the beginning of the market problems.

This is after the world has pumped unknown trillions of dollars to prop up the systems. We need to start concentrating on these types of issues. Or the food and other necessities on those ships will never make it to the consumers that need them. This is a warning sign of bad things to come and we need to heed the call.

The Eisenhower administration was not faced with these dire situations in 1956. Peace had broken out and the depression had subsided from immediate memory. The role of government is to ensure that the systems and infrastructure are able to meet the needs of its people. That is why the governments, in addition to providing liquidity and interest rate relief should fund industry supporting software development projects.

The role of government has been discussed many times in Professor Carlota Perez' papers. In her Strategy + Business "Thought Leader" interview she stated:
Government needs to be reinvented, using as much imagination as it took to design the welfare state in the first place. It all seems impossible now, but things always seem impossible at this point in the surge. p. 7
Governments need to be involved in the financing of software development projects such as People, Ideas & Objects. Providing the software that enables local economies to function may be the new dividing line between have and have not.
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. p. 7
We have a choice, be constrained by our current organizations and their poor performance, regress to manual systems and barbarianism, or build the software for tomorrow's organization today. Join me here.

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Monday, October 27, 2008

Professor Carlota Perez Respecialisation Part II

As promised here is the second and final installment of Professor Carlota Perez Respecialisation document.

GLOBALISATION, MARKET SEGMENTATION AND THE NATURE OF THE ICT PARADIGM

In this section Professor Perez makes a comment that I don't think I have heard before. It is also one in which we have to admit is an important aspect of how we do move to the economic prosperity that is promised in the "turning". She also draws a parallel to the "third surge" that occurred during the 1870's and continuing onto WWI.
One of the basic features of this paradigm is the trend towards globalisation, which is a consequence of the characteristics and the potential of information and telecommunications technologies.
Concluding with somewhat of a warning about investing too far abroad and neglecting advanced production systems at home.
Historical parallels do not lead to predictions; every paradigm and every set of circumstances is unique. They merely provide a useful frame of reference which points to aspects that may merit attention when analysing the corresponding period in another surge. The experience of the third surge shows that a powerful set of technological and infrastructural conditions facilitating worldwide expansion can function as an irresistible driver for global investment and trade. It gives a precedent showing that some well-endowed countries with appropriate policies can experience intense processes of catching up or forging ahead in connection with globalisation and the new technologies. It may also serve to warn that building finance-based empires abroad while neglecting advanced production investment in the home economy could later bring very unfavourable consequences.
Professor Perez goes onto to state that the British lost their dominant economic position to Germany and the United States as a result of not maintaining their infrastructure at home. I have heard many people say that the U.S. is a consumer based economy, and that is true. This does not mean that they have not invested internally to the detriment of their competitiveness. The characteristic I see the Americans having in this market meltdown is the capacity to accept change. To admit their downfall was their own fault, pick themselves up and get moving again. This remains undiminished in my opinion, and a key in their future competitiveness.

The ICT paradigm and globalization

How fast can a firm react. Today with Information Technology it is much faster then at any other point in time. Perez notes the costs of using the network are relatively small. The real costs are in the areas of research and development. That is what I have focused on in this blog for the past five years. We need to now build the application modules from the Preliminary Specification to the final Release Candidate (RC).

Knowledge capital and intangible value added facilitate heterogeneity, diversity and adaptability. these in turn lead to -and interact with- the segmentation of markets and the proliferation of niches. Globalisation leads to the interaction of the global and the local, both in terms of comparative advantages for production and innovation decisions and in terms of adaptability of global products to local markets. Production is then conceived in a complex range that may go from “mass customisation” achieving economies of scope and scale to multiple niches geared to attaining economies of specialisation. p. 21
Globalization, due to its speed and innovation of decision making, is here to stay. Despite the consequences of the current market meltdown, we need to keep this fact clearly in our minds that the inevitability of globalization is what we should aspire to.

ICT and the hyper-segmentation of markets: Outsourcing and off-shoring

Professor Perez is a a long wave Shumpeterian economic theorist. Creative destruction is what the markets have traditionally used to make the necessary changes on a permanent basis. That is what we are seeing in today's marketplace, the destruction of the old ways of doing things. We need the new globalized, IT enabled organizational structures that are able to increase the productivity of their workers and meet the markets demands for more. How this comes about is a part of what Professor Perez is suggesting.
As the processes of disaggregation and diversification become more and more complex and as the various competition factors in each segment become defined, so the relative advantages of the various regions, countries and companies become clearer for outsourcing and off-shoring. Thus, a feedback loop is generated intensifying the advantages of those initially successful in certain activities or segments, so that the assessment processes undertaken by various global companies favor them even further. This concentration eventually overshoots the mark and is, in turn, likely to generate new disadvantages that open opportunities for those discarded in the early rounds. p. 24
What is clearly being stated in this article is that the majority of the ways of doing things are going to be iterative over the life of the process. As new opportunities are discovered and implemented the firm will be able to increase the level of specialization and enhance its productivity. This is all enabled and facilitated by the Information & Communication Technologies. But how will this come about, and how will it be implemented? That is the question that I am attempting to suggest is a key criteria for proceeding with this software development project.

If we are to expect a dynamic and iterative marketplace for service and oil and gas production we are going to need an iterative and comprehensive oil and gas system that can adopt the changes. An Information Technology development capability for the future of the oil and gas industry. That is what People, Ideas & Objects is about, providing that change enabled IT capability using the Joint Operating Committee as the key organizational construct of the industry.

POLICY ACTION TOWARDS A SUSTAINABLE AND COHESIVE GLOBALIZATION

Professor Perez says something interesting that I don't think I completely subscribe to. And that is that markets may, as a result of unregulated financial markets, produce bubbles and collapses that affect the real economy and can lead to social unrest. It is certainly easy to see who has created the economic problems that we have today, (financial capital) and the risks of social unrest is very high.
As discussed in section three, the collapse of the bubble leaves three tensions acting in the economy: that between paper and real values, that between potential supply and effective demand (or premature market saturation), and that within society between the richer rich and the
poorer poor.

Since these three tensions define the conditions under which markets operate, free markets will only aggravate them. In the absence of conscious regulation and policies that will create conditions for redirecting investment towards a truly positive sum-game and a virtuous feedback cycle of global growth, the instabilities underlying the present performance of the various economies may produce collapses that could bring the world economy into recession or intensify the social tensions to the point of generating serious social unrest. p. 32
and
In the present Turning Point it could be said that excess free markets are as obsolete and represent as much of an obstacle to maximize growth in Deployment, as excess State intervention was seen to be during early Installation. p. 35
Where this discussion heads is uncertain at this time. I am surprised at the number of people who would normally shriek at the action of governments in the last few months, just accept them as necessary. Regulation of free markets may be the net result of this collective understanding that Professor Perez is suggesting is necessary.
The ‘other’ globalization, fully compatible with the paradigm and capable of unleashing a worldwide steady expansion of production, markets and well being, is waiting to be formulated. It would be production-centered and -led; pro-growth and pro-development; with dynamic, locally differentiated markets, enhancing national and other identities. But it will not be the creation of any invisible hand; it will work with the market but will require plenty of human imagination, ample participation, intense negotiations, much determination and collective political will. p. 35
I have asked a related question on this blog before. How will a globalized industry organize itself. Markets used to be created between face to face interaction. Now the ICT and globalized marketplace are able to achieve significant value add through the development of markets. This can not be and will not be through the standard face to face interactions that we are used to. I would also add the further adoption of enhanced regulations would best be handled in software.

Software defines and supports the organization. This was researched and determined in the Preliminary Research Report. We have to set out to build the software first and establish the infrastructure and market connections before they will happen. If globalization, as Professor Perez suggests in this paper, is enabled as a result of the Information & Communication Technologies, we need to focus on ICT as the key to instituting the change, ensuring that we become as innovative as possible for today and tomorrow. Please join me here.

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