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GSIS eyes ‘legal actions’ against IBM

By Ronnel Domingo
Philippine Daily Inquirer
First Posted 19:18:00 05/25/2009

Filed Under: Technology (general), Litigation & Regulations, Government offices & agencies, Software

MANILA, Philippines?The Government Service Insurance System warned on Monday that it would launch ?a series of legal actions? against IBM for ?incalculable damages? that the pension fund sustained due to defective computer software.

GSIS chief legal counsel Estrella Elamparo said the agency has sent two demand letters asking IBM for a permanent solution.

Elamparo said in a briefing that GSIS sent a final demand letter to IBM headquarters in New York, addressed to company president and chief operating officer Samuel J. Palmisano.

In a statement, IBM Philippines said it completely rejects GSIS? claims. ?We are disappointed with the approach taken by GSIS, which is ultimately not helpful to resolving this matter, nor in the best interest of its members,? IBM said.

?GSIS did not engage IBM in the selection, customization and implementation of this system,? the company added. ?IBM was the original equipment manufacturer provider to one of the technology vendors engaged by GSIS.?

Elamparo said the issue related to IBM?s database management software, called the IBM DB2, which IBM Philippines supplied GSIS and installed in 2006 under a package of software solutions.

The lawyer explained that the software started showing problems in early 2008, particularly in handling voluminous chunks of data.

?IBM upgraded its database system purportedly to enable it to handle unlimited volumes of data,? Elamparo said. ?However, the reported upgrade only worsened the problem because instead of fixing the problem, the database began mishandling data and prevented the simultaneous use of data.?

She said the GSIS system eventually crashed two months ago, paralyzing major operations of the pension fund and resulting in the slowdown of claims and loans processing.

Consuelo Manansala, GSIS executive vice president, said the agency incurred a backlog over the past two months on the processing of claims although the release of monthly pensions and loans were still normal.

?We have 20,000 claims pending because of the crash,? Manansala said. ?Most of these are claims of those who have retired recently.?

The official said it normally took GSIS a week to process a claim while loans were facilitated in just a day.

?With the system going up and breaking down intermittently, our backlog is piling up,? Manansala said.

She said the crashes could not come at a worst time for 1.5 million GSIS members and pensioners because May and June are peak months for loans and benefits, being the season for enrollment in and opening of schools.

?GSIS members are in dire need of financial support from the GSIS during these months,? Manansala said. But ?IBM seems to be too big a company to care for the anguish it has brought the GSIS and its members.?



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