Robert K. Perrons

The role of clockspeed in outsourcing decisions for new technologies: insights from the prisoner’s dilemma

Some research in the area of make‐buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous “make” policy in the early days of a potentially disruptive innovation. Other studies prescribe exactly the opposite, promoting instead a “buy” strategy. Drawing from observations and lessons from the Prisoners Dilemma, this paper seeks to bridge the gap between these perspectives by suggesting that both strategies are valid, but that they are most successfully applied in different market environments. The “make” prescription may be more suited to either extremely fast or extremely slow rates of technological change, while a “buy” strategy might be more appropriate in market sectors where technologies evolve at a medium pace. This paper highlights the importance of industry clockspeed and supplier relationships in make‐buy decisions for new technologies, and puts forward two new hypotheses that require empirical testing.

Strategic Dalliances as an Enabler for Discontinuous Innovation in Slow Clockspeed Industries: Evidence from the Oil and Gas Industry

The concept of ‘strategic dalliances’– defined as non-committal relationships that companies can ‘dip in and out of,’ or dally with, while simultaneously maintaining longer-term strategic partnerships with other firms and suppliers – has emerged as a promising strategy by which organizations can create discontinuous innovations. But does this approach work equally well for every sector? Moreover, how can these links be effectively used to foster the process of discontinuous innovation? Toward assessing the role that industry clockspeed plays in the success or failure of strategic dalliances, we provide case study evidence from Twister BV, an upstream oil and gas technology provider, and show that strategic dalliances can be an enabler for the discontinuous innovation process in slow clockspeed industries. Implications for research and practice are discussed, and conclusions from our findings are drawn.

What the hare can teach the tortoise about make‐buy strategies for radical innovations

Purpose of this paper – The purpose of this investigation is to help establish: whether or not strong relationships between suppliers and customers improve performance; and if prescriptive frameworks on outsourcing radical innovations are dependent on industry clockspeed. Design/methodology/approach – A survey of UK-based manufacturers, followed by a statistical analysis. Findings – Long-term supplier links seem not to play a role in the development of radical innovations. Moreover, industry clockspeed has no significant bearing on the success or failure of any outsourcing strategy for radically new technologies. Research limitations/implications – Literature about outsourcing in the face of radical innovation can be more confidently applied to industries of all clockspeeds. Practical implications – Prescriptions for fast clockspeed industries should be applied more broadly: all industries should maintain a high degree of vertical integration in the early days of a radical innovation. Originality/value – Prior papers had explored whether or not a company should outsource radical innovations, but none had determined if this is equally true for slow industries and fast ones. Therein lies the original contribution of this paper.

Assessing the damage caused by Deepwater Horizon: Not just another Exxon Valdez

In light of the high stakes of the Deepwater Horizon civil trial and the important precedent-setting role that the case will have on the assessment of future marine disasters, the methodologies underpinning the calculations of damage on both sides will be subjected to considerable scrutiny. Despite the importance of the case, however, there seems to be a pronounced lack of convergence about it in the academic literature. Contributions from scientific journals frequently make comparisons to the Ixtoc I oil spill off the coast of Mexico in 1979; the legal literature, by stark contrast, seems to be much more focused on the Exxon Valdez spill that occurred off the shores of Alaska in 1989. This paper accordingly calls for a more thorough consideration of other analogs beyond the Exxon Valdez spill-most notably, the Ixtoc I incident-in arriving at an assessment of the damage caused by the Deepwater Horizon disaster.

Business Value From Intelligent Fields

The Smart Fields programme has been active in Shell over the last decade and has given large benefits. In order to understand the value and to underpin strategies for the future implementation programme, a study was carried out to quantify the benefits to date. This focused on actually achieved value, through increased production or lower costs. This provided an estimate of the total value achieved to date. Future benefits such as increased reserves or continued production gain were recorded separately. The paper describes the process followed in the benefits quantification. It identifies the key solutions and technologies and describes the mechanism used to understand the relation between solutions and value. Examples have been given of value from various assets around the world, in both existing fields and in green fields. Finally, the study provided the methodology for tracking of value. This helps Shell to estimate and track the benefits of the Smart Fields programme at company scale.

Who Drives E&P Innovation?

Few would argue that the upstream oil and gas industry has become more technology- intensive over the years. At the same time, the increasing costs and complexity of today’s exploration and production (E&P) technologies are making it increasingly difficult for any one company to support an aggressive research and development (R&D) agenda single handedly. The coming together of these two evolutionary forces gives rise to important questions. How does innovation happen in the E&P industry? Specifically, what ideas and inputs flow from which parts of the industry’s value network, and where do these inputs go? And how do firms and organizations from different countries contribute differently to this process? This survey was designed to shed light on these issues.

Perdido: The First Smart Field in the Western Hemisphere

Located in the Gulf of Mexico in nearly 8,000 feet of water, the Perdido development is the world’s deepest spar and Shell’s first Smart Field in the Western hemisphere. Jointly developed by Shell, BP, and Chevron, the spar and the subsea equipment connected to it will eventually capture approximately an order of magnitude more data than is collected from any other Shell-designed and managed development currently operating in the Gulf of Mexico. This paper will describe Shell’s Smart Fields design philosophy, briefly explain the five design elements that underpin “smartness” in Shell’s North and South American operations—specifically, remote assisted operations, exception-based surveillance, collaborative work environments, hydrocarbon development tools and workflows, and Smart Fields Foundation IT infrastructure—and shed light on the process by which a highly customized Smart Fields development and management plan was put together for Perdido.

THE EFFECT OF INDUSTRY CLOCKSPEED ON MAKE-BUY DECISIONS IN THE FACE OF RADICAL INNOVATIONS: AN EMPIRICAL TEST

Evidence from management and business strategy research is divided over whether or not a firm should outsource the components and processes underpinning a new and potentially radical innovation. This investigation introduces ideas and evidence from the areas of supplier relations and industry clockspeed, and attempts to reconcile conflicting conclusions from earlier research by using a survey to measure supply chain management practices from a broad range of manufacturers in the UK. The results show that an industrys clockspeed has no significant bearing on the success or failure of any particular make-buy strategy for a radical innovation. The findings also indicate that maintaining strong ties with suppliers yields no significant long-term benefit for firms contending with radical new technologies.

A proposed role for models and simulations in management research

Overall, computer models and simulations have a rather disappointing record within the management sciences as a tool for predicting the future. Social and market environments can be influenced by an overwhelming number of variables, and it is therefore difficult to use computer models to make forecasts or to test hypotheses concerning the relationship between individual behaviours and macroscopic outcomes. At the same time, however, advocates of computer models argue that they can be used to overcome the human minds inability to cope with several complex variables simultaneously or to understand concepts that are highly counterintuitive. This paper seeks to bridge the gap between these two perspectives by suggesting that management research can indeed benefit from computer models by using them to formulate fruitful hypotheses.

The Unfinished Revolution: What is Missing From the E&P Industry's Move to "Big Data"

One cannot help but be impressed by the inroads that digital oilfield technologies have made into the exploration and production (E&P) industry in the past decade. Today’s production systems can be monitored by “smart” sensors that allow engineers to observe almost any aspect of performance in real time. Our understanding of how reservoirs are behaving has improved considerably since the dawn of this revolution, and the industry has been able to move away from point answers to more holistic “big picture” integrated solutions. Indeed, the industry has already reaped the rewards of many of these kinds of investments. Many billions of dollars of value have been delivered by this heightened awareness of what is going on within our assets and the world around them (Van Den Berg et al. 2010).