and Business Plan
|
| Update on POSC Governance and Business Plan |
At the most recent member meeting in Dallas (November ’97), Bob Pindell and David Archer presented a report on the future POSC drivers, goals, principles, and implications as determined in the October Board planning meeting. Refer to the presentation "Annual POSC Planning Meeting Report" in the November 1997 meeting notes.
Bob and David reviewed a straw-man model for POSC consisting of three work categories:
Maintenance includes the work to maintain Epicentre and the other POSC specifications, information programs and meetings, etc. The maintenance workload will be supported by member fees. Growth in the resources allocated to this work will be carefully controlled by POSC management.
The activities performed in carrying out product maintenance work includes the following:
The primary POSC products are:
This work category involves development work to expand and/or improve the POSC standards and specifications for the benefit of all POSC members. This work will be funded as distinct projects by interested members. The incorporation of the project results into existing POSC specifications should be supported. These projects will follow the POSC open process, i.e. will be open to all members.
Interest has been expressed for POSC projects, including the following:
This work category involves fee-for-service work performed by POSC for clients as well as license and royalty revenue. The contracted work, directly related to POSC-related skills and experience, performed for the benefit of customers / project sponsors, who will pay fees for services received. If the project wants project results to be integrated into the mainstream POSC standards and specifications, then the project should release the results to POSC and provide funding for the open process (Category I or II) activities required to do so.
The types of work envisioned in this category include:
Types of "Licensing & Royalty" Work:
Other leveraged opportunities:
Bob also described the planned transition to governance by members, i.e. without sponsors. This was, in fact, the intent of the founders of POSC. It has simply taken longer to begin the transition. Bob concluded by saying that there is no change to POSC's original objectives or goals.
Following the presentations was a question and answer period that seemed to indicate a general appreciation of the direction being proposed. Many of the questions were clarifying in nature and a few expressed the importance of not letting the maintenance function starve. There was also a desire to know if the POSC organization structure would be split, how the board would be structured, how certain types of work will be funded under the new scheme and how the membership will be involved in review and validation of the new business plan.
These questions and others were taken into consideration at the December Board meeting and progress was made on a number of fronts. Following is a summary of the topics and decisions:
Reaffirmed the need to restructure the Corporation in a manner that would ensure broad member participation, revenue sustainability and the addition of value-added activities. Elements of a revised corporate structure include obtaining significant levels of funding from new sources, such as consulting or other products and services, retaining the Corporation's "not-for-profit" status, amendments to the Corporation's Charter and By-laws to implement this revised structure, and the Corporation's need to put specific procedures and policies in place to reduce the risk of challenge.
Current and near-term staffing limitations would not permit two separate groups to be maintained by the Corporation, but care would be given to ensure the separation of commercial activities from specification-setting activities. The importance of having in place specific procedures to ensure that the commercial activities of the Corporation did not influence or affect the Corporation's specification setting activities was emphasized. A number of scenarios and potential issues that could arise from the Corporation's provision of commercial consulting services were also discussed. Included were the implications of competition, of compliance and certification, of intellectual property rights and of prioritizing commercial services. Management is to develop a list of business scenarios that could arise in connection with POSC's provision of commercial consulting services for review and analysis by corporate counsel Hale and Dorr.
The Board approved a new Membership Fee Schedule that includes a top tier fee of $125k, a minimum fee of $5k, split of an existing tier to create a new tier with fee of $37,500, and elimination of the Oil/Non-oil categories. The new schedule is:
| For-Profit Organizations: | ||
| Corporate Gross Revenue | Fee | |
| * Greater than or equal to $30 Billion | $125,000 | |
| * Greater than or equal to $5 Billion, but less than $30 Billion | $100,000 | |
| * Greater than or equal to $1 Billion, but less than $5 Billion | $50,000 | |
| * Greater than or equal to $100 Million, but less than $1 Billion | $37,500 | |
| * Greater than or equal to $10 Million, but less than $100 Million | $25,000 | |
| * Less than $ 10 Million | $5,000 | |
| Not-For-Profit Organizations: | ||
| * NFPs, Gov't Agencies, Academic Institutions | $5,000 | |
1997 Sponsors were in favor of participating in Category 2 expenditures during 1998, which was viewed as a year of transition to the Corporation's new business model. As such, POSC funding in 1998 is as follows:
| Companies that were sponsors in 1997 | Membership Fee | $125 |
| Project Funding | $175k | |
| Companies with revenues >$30B | Membership Fee | $125 |
| Project Funding | $175k | |
| All other members | Membership Fee | Per Fee Schedule |
| Project Funding | Discretionary |
In the Projects area, POSC is developing more detailed proposals and deliverable schedules for the Shared Earth Model specifications and the Interoperability/Business Objects deliverables. In subsequent years, all Project Funding will be discretionary based on specific proposals and membership fees will be per the Membership Fee Schedule.
After consideration of several alternative proposals the Board agreed to a Board of Directors consisting of members from the following membership categories:
| Membership Categories | Directors | |
| Cat 1: Oil Company Directors | 5 | |
| Cat 2: Non-Oil Company Directors | 4 | |
| Cat 3: Government/Academic/Not-for-Profit Director | 1 | |
| CEO | 1 | |
| Total | 11 | |
Nominations for the Board of Directors will be solicited from the members in each of the above membership categories; thereafter, management will distribute ballots, including detailed professional biographies of each candidate, to all members. The number of directors for each category will be elected by the membership as a whole, members not voting by membership category. The Board of Directors will not have the right to ratify or approve the Directors elected by the members, but will retain the ability to remove directors for cause. Also, the Chief Executive Officer of the Corporation will be a voting member of the Board of Directors, but be restricted from serving as Chairman of the Board.
The Board transition will occur over a three-year period beginning in October 1998. The terms of the current At-Large Directors will expire as currently scheduled, and the terms of the former Sponsor Directors will expire on a staggered basis over the period, as follows:
| TRANSITION SCHEDULE | ||||||||
|
Sponsors |
At-Lge |
Cat 1 |
Cat 2 |
Cat 3 |
CEO |
Total | |
|
Now |
7 |
3 |
0 |
0 |
0 |
1 |
11 | |
|
Oct-98 |
4 |
2 |
1 |
2 |
1 |
1 |
11 | |
|
Oct-99 |
3 |
0 |
2 |
4 |
1 |
1 |
11 | |
|
Oct-00 |
0 |
0 |
5 |
4 |
1 |
1 |
11 | |
The draft Business Plan was accepted subject to further development by the management team, including interim consultation with members and the Board, to reflect the Board discussions and directives. To facilitate a speedy approval, a second draft of the business plan will be delivered to the Board by the end of February. Also, at the upcoming member meetings, members will have an opportunity to participate in breakout groups to help define appropriate projects, deliverables, and services most needed by the community. This input will be factored into the final Business Plan, which will be approved by the Board on March 23rd.
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registered trademarks of Petrotechnical Open Software Corporation.