A New Branch on the TechExecs Tree
I recently became the new National Programs Chair at TechExecs. I’m excited about this new role because I believe that this provides another means of helping the IT community build closer bonds with their customers. I often have written about the benefits of business-IT alignment. Mostly it’s been about improving business processes and then making sure the client’s IT hardware and systems are supportive of those processes. This time it’s different.
In this new role we can expand that focus to include more support of the human resources of the IT world. Over the years, I have observed a very persistent disconnect between the technical community and their customers. The core problem is that there is minimal shared vocabulary and sensitivity to the other side’s issues. We will be providing seminars and workshops on topics like:
- Relationship building
- Consensus building
- Internal customer relationship management
- Internal sales techniques
Understanding your internal customer’s business issues
- Business skills development for IT professionals
- Understanding your customer’s business processes
- Other similar topics of interest to our members …
These are some of the types of topics we will cover but these are not necessarily the titles we’ll use. The overall goal is to help our membership grow the skills that will help them be better at their current jobs as well as make them more competitive in the marketplace. Obviously, we have our own ideas but we need to hear from our customers. We need to hear your ideas and needs. We’d like to hear your opinions on this topic as well. We want to make this new offering as valuable as we can for our membership. Please either comment on this post or send me an email at mnpattison@gmail.com.
This is a short post but it won’t be the last on the topic. Don’t forget to send me your ideas on this post as soon as you can. Thanks for stopping by…
Virtualized Operations for the Rest of Us
Recently, I was reading an article in the Digital Energy Journal Issue 22. What caught my eye was the title, “How virtual collaborative environments can save $120,000,000″. That’s an intriguing title and I was curious where the $120M came from. Much of the article quoted people at Capgemini. That ultimately led me to the paper that Capgemini calls “TechnoVision 2012 for Upstream Oil and Gas” (the Capgemini link will take you there for the whitepaper and a video). Basically, it’s Capgemini’s grand vision for using IT technology to change how E&P does its business. I agree with most of what I read but was struck by the scope of the vision. Their vision clearly targets the super-major size energy company. The vision is a collection of really big projects. I wanted to look at the vision through the eyes of midsize businesses. This is actually a continuation of my post “Microsoft and the Energy Industry“.
I’m not going to try to restate the details of the Capgemini vision here. You can get a copy of the whitepaper for yourself using the link provided above. The DEJ article considers the benefits of building a virtual representation of a manufacturing/production facility much like what can be done with a 3-D CAD program. That model is then connected to real-time data from the actual facility as well as data from other sources. The result is a virtual working environment which allows control and maintenance of the facility, collaboration with facility coworkers (including showing them as avatars) and collaboration with remote experts as needed. I think that the article presents a version of the Capgemini vision but is overkill. For example, I don’t agree with the need for avatars walking through and interacting in the virtual environment. That idea may be appealing for a public presentation but in actual use it would get old and clumsy.
The ideas were sufficiently intriguing that I digested the TechnoVision paper. Fortunately, there were no avatars mentioned there. What was appealing in that paper was a clearly useful list of business drivers. They are:
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The Growing Influence of NOCs (National Oil Companies)
This means national and regional politics won’t be declining anytime soon.
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Exploiting Unconventionals
This means the need to access unconventional sources of energy.
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The Aging Workforce
The baby boomers continue to retire with more people leaving the industry than enter it.
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Alignment of Quality Provisions
Aligning long term investments with oil price cycles
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Increased Public Scrutiny for Compliance Excellence
While the current oil release in the Gulf was not included as a motivating factor in the paper, but increased public scrutiny is now a certainty.
All of these factors affect the midmarket as much as the super-majors. The problem is the midmarket doesn’t have the same level of resources. I argue that the midmarket can get much of the same benefits as those referenced in the Capgemini paper by using low cost, commodity hardware and software as mentioned in my previous post referenced above. No avatars, just control panels built from commodity portal software, like Microsoft SharePoint or IBM WebSphere. Those same tools can also be used for collaboration although there are other low cost alternatives. Let’s not forget about the growing selection of low cost social media tools that can be hosted internally if you’re not ready to use cloud computing for mission critical applications.
I believe that you would be best served by thinking of my vision as well as the Capgemini vision as frameworks. A framework is just standard base of tools from which to build your own unique solution. That solution must contain business processes which include more external collaboration with experts and trading partners. Those business processes should also be automated with tools that allow quite a bit of flexibility and adaptability. Business process management tools are becoming increasingly mature and flexible. They can provide all the adaptability most companies need.
In summary, I agree with the bulk of Capgemini’s TechnoVision but advocate addressing the same issues with a somewhat more pragmatic approach. Commodity hardware and software tools used to automate more inclusive business processes can now be an effective alternative for companies of all sizes. The business drivers listed above still apply to all segments of the energy business and must be addressed. A framework based on common tools will allow projects to be simpler and faster to execute. And let’s not forget that they will offer a dramatically higher probability for success.
Until next time, thanks for stopping by…
What is Midsize?
I was at an Oracle event this week being updated on their new Enterprise Manager 11g. It will be the subject of a future blog post so I won’t go into it now. I went there to see how this software could be of use to the midsize manufacturing and E&P industries as well as the service companies that market to them. As I watched the presentations I was struck by the fact that I was uncertain of the value this tool for the market segment I was focused on.
Then I realized that the reason I was uncertain was that I have been relying on a vague, generalized notion of what midsize meant. We have all seen a simple pyramid like the one shown on the left to represent market segments. The sections are defined by clean, straight lines. In this pyramid I have shown clouds around those clean, straight lines as an indication that they actually have fluffy, vague locations on the chart. I knew that I had to firm up my definition of what midsize meant.
So what is involved in defining midsize as it relates to businesses? First, we have to realize that one variable is the industry that business is in. For example a midsize bakery is not the same size as a midsize refinery. Another popular definition is the number of employees. In both cases, the definition depends on the industry. The dilemma for those of us who have to worry about marketing is that definitions more complex than the ones already noted are not useful for sorting available data into market segments. By that I mean that data on number of employees, revenue and industry are readily available from various sources. Those criteria can be easily plugged in to database searches to generate categorized lists for marketing campaigns.
I believe what is needed is a two pass approach. First, use the simple criteria noted above for a first cut on the data. Then use a more elaborate rating system 
to fine tune and validate the list. It’s more work for sure but will generate higher quality marketing data. My rating system focuses on the notion that the complexity of a business is more useful metric for defining midsize. The list represented by the radar chart on the right identifies a number of attributes to be evaluated. Not all of the attributes listed are complex, like revenue and employees, but most are. For example, one of the attributes is the use of social media tools by a business. Clearly, most businesses do not use them very much at this time but the trend is for increased use in the future for most businesses. Increased use of social media incrementally increases the complexity of the business.
My rating system gives each attribute definitions for each of five ratings. Each attribute is considered for the subject business and given a rating. For those of us who prefer visual representation of data a radar chart provides a shape that corresponds to the overall complexity of the business.
I suggest that this approach would be helpful for the subject businesses themselves. This rating system is basically a simple methodology to focus on each segment of their business, decide where it is today and where they want to go in the future. The results can then be used to decide what projects to pursue and what priorities to set. Large enterprises already have very complex and sophisticated approaches to doing the same thing. Smaller businesses have neither the time nor specialized resources for complex approaches. My rating system can be used in a limited amount of time by non-specialists.
I hope my pitch for a rating system to assess business complexity as the definition of midsize provides some food for thought for customers and vendors alike. I’m not sure referring to my market as mid-complexity businesses would be right thing to do. Maybe I’ll just keep referring to midsize businesses as my market and send a link to this blog post as follow-up.
Thanks for stopping buy. Stay tuned for more…
Microsoft and the Energy Industry
The new issue of Digital Energy Journal (Issue 25) is just out. In it is an article about Microsoft’s new products and directions relevant to the energy industry. With my interests in IT leadership, manufacturing operations and E&P surface operations, I was immediately compelled to read it. Since I have a long history with Microsoft both as a customer and a channel partner I have some well entrenched ideas about how Microsoft fits into the manufacturing and energy world (mostly good with a dash of frustration).
As I read the article, a couple of points jumped out at me. First is the use of the Xbox 360 with the upcoming Kinect user interface device (shown in the image on the right). It is a controller-less device that allows the user to control a game like a Nintendo Wii but without any hand held controllers. This device is primarily intended for the gaming world but has potential for the manufacturing and E&P worlds as well. For example, Halliburton Landmark has just announced a new application called GeoGraphix Discovery 3D. It will build on their GeoGraphix product and make that visualization environment easier to navigate.
What got me excited is the ability to apply an Xbox/PC/Network system to create business visualization environment at an affordable cost. Many of us are old enough to remember when cell phones were big, expensive and had to be installed in your car by a technician. We can also remember what happened to their use when cell phones got cheaper and more portable. Their use grew geometrically as well as their applications. Now consider the large and hugely expensive visualization environments now sold to the E&P industry. Then consider what happens when you can have something acceptably close to the same functionality but on commodity hardware. The cell phone evolution gets replayed for visualization systems.
Now let’s consider what happens when that same commodity visualization environment gets connected to 3-D CAD environments of manufacturing plants and E&P surface operations along with other business applications. Now combine that new mix of tools with a more highly regulated and monitored operational environment. That will happen thanks to incidents like the current BP spill in the Gulf of Mexico and numerous industrial explosions, fires and chemical releases. The best way to image what I’m talking about is through an example.
Let’s image we’re in an ordinary conference room. We’re facing a wall with three large screen monitors in a row. On the middle monitor is a 3-D model of a process manufacturing plant, offshore platform or some other organized industrial collection of pipes, tanks, buildings and equipment. As we walk through this facility we can reach down and touch a piece of equipment as we pass it. When we touch it, its spec sheet and maintenance history are displayed on the screen on the left. If we are concerned about what we see we touch the equipment again with another gesture of our hand and we dictate a note to be attached on that piece of equipment. That note appears on the screen on the right and a flag appears on the equipment shown on the center screen, indicating the need for follow up. All of this data can also be displayed and accessed in a more tradition way on PCs or laptops located elsewhere (or in the same room). This kind of scenario could have applications for the management of these operations to be able to more easily survey and diagnose issues in their facilities. Connecting to a master data management system would allow such a system to be applied to multiple, similar facilities and managed together more easily. Environmental, maintenance and operational data can be displayed together in more intuitive ways. That can lead to the avoidance of future problems of all sorts. This is industrial strength business-IT alignment.
You can use the above example as a base from which to imagine a scenario more specific to your own experiences. Just don’t forget that we’re seeing this using commodity hardware and lower cost software. This puts such a system within reach of mid-sized manufacturers, energy and service companies. That’s a game changer for those mid-size companies.
The second point that jumped out to me in the article was Steve Balmer’s vision of the energy industry’s migration toward cloud computing. He’s probably right but I struggle with that idea when applied to large quantities of data that need to be brought down to a local system for use and analysis. It really depends on how cloud computing standards, security and infrastructure evolve. I have commented on cloud computing issues in the past so I won’t do it again here. If you’re interested, just click on the cloud computing tag in the tag cloud to the right of this post.
In summary, I think that whether you love or hate Microsoft they are one of the very few companies that can provide a sufficiently diverse, integrated set of applications and devices to allow the creation of such architectures at relatively low cost. Let’s hope that Steve Balmer’s vision for the energy industry can become reality and not get bogged down in bureaucracy or drifting priorities along the way.
Thanks for stopping by. Stay tuned for more…
2010 Digital Energy Workshop
This week I attended the 2010 Digital Energy Workshop here in Houston. It is an event sponsored by the Society of Petroleum Engineers, Gulf Coast Section and a number of vendors to the energy industry. The intent of the workshop is to address the technologies and issues driving the evolution in the use of digital technologies in the E&P industry. As an old manufacturing guy, I have my own preconceived notions about the state of this evolution. In the manufacturing world we had to address the same issues a couple of decades ago. The process manufacturing world lives on slimmer margins. The E&P world has not had to face that reality until recently, and not that much even then.
The focus of this industry has been on optimizing drilling and maximizing recovery from a field (35% is a reasonable number). As such, there is quite a bit of material and work focusing on reservoir modeling, geological tools and the operations of the drilling process, such as directional drilling. But when we talk about what we call digital energy we are talking about the integration of data from downhole sources, operational data and business data in such a way that organizational silos are not constraints to business improvement. Good decisions are made faster than ever before. Since the Houston area is one of the primary centers for this industry this event attracts vendors who see digital energy as a major business opportunity.
Major industry vendors like Halliburton, Baker Hughes, Schlumberger, ABB and Microsoft were major sponsors. Other, smaller firms like OSIsoft, Merrick Systems, Business Fundamentals Group, MicroStrategy and Performix were also sponsors. While this list of vendors is not as large as it will be in the future, it does contain some major corporations with a major commitment to digital energy offerings. Microsoft and Merrick Systems were the only two with booths at the show. I suspect that it won’t be too long until we see SAP, Oracle, Emerson and Honeywell at this event. All of them have a story to tell to the E&P market.
I heard a few comments about OPC-UA vs. WITSML. Both are communications standards but differ in focus. OPC-Unified Architecture is intended to provide just that, a unified architecture for control equipment and instrumentation which allows the equipment from vendors that adopt the standard to work together automatically. This offers the customer lower costs and greater flexibility when they build their control systems. WITSML is somewhat similar but much more focused on the specific needs of the E&P industry. The point of the comparison is whether or not a more generalized standard is better than one focused on one industry. This sounds like a future blog post to me so I won’t pursue it here.
The various presentations we heard varied from high level overviews of what is digital energy and what’s next to specific case studies of individual projects. What struck me was the similarity to events I attended in my manufacturing past. Those past events, like this one, reflected an industry waking up to new possibilities and technologies. The fact that this was only a one day conference is consistent with the new but growing interest in the topic. The presentations from this conference will be posted in a few days and they, in turn, will also become fodder for my blog posts.
Another interesting point that struck me is that the Gulf of Mexico now has a lot of fiber optic cables connecting the platforms. This means that the bandwidth available for platforms to connect to their on-shore operations centers is dramatically greater, allowing many more options than for those which continue to rely on low bandwidth satellite connections. Conversely, many on-shore fields are still limited to cellular or satellite connectivity. The ramifications of this seem to me to be worth yet another future blog post. Integrated operations of a geographically disperse collection of equipment using different connection pipes (bandwidth) using standardized applications is an intriguing concept.
Finally, one last observation was the literature review that the organizers did. Initially that seems like a dry topic (well, actually it was still a dry topic at the end). What stood out to me was the number of case studies that reported notable savings. Each study was a little different but, collectively, the direction was the same. This industry is starting to understand how to make and save money with this technology. As the number of these types of case studies increases, the number of use cases available to software developers and hardware manufacturers increases as well. That implies rapid growth in product features and diversity. It’s all good.
As you can see, there will be more posts from me on these topics in the future. Stay tuned…