IBM rejects GSIS claims on system glitch

Posted at 05/27/09 8:48 PM

IBM Philippines on Wednesday rejected claims made by state pension Government Service Insurance System that IBM is responsible for glitches in the GSIS system.

In a statement, IBM Philippines said it is disappointed with the approach taken by GSIS in its recent media outreach.

"GSIS did not engage IBM in the selection, customization and implementation of this system. IBM was the OEM (original equipment manufacturer) provider to one of the technology vendors engaged by GSIS. GSIS does not have any maintenance or support contract with IBM," the statement read.

"Nonetheless, in view of our long standing relationship with GSIS and out of goodwill, IBM has been working with GSIS' solution providers to resolve GSIS' system issue."

GSIS Chief Legal Counsel Estrella Elamparo earlier said the state pension fund has sent a final demand letter to IBM Corp. President and COO Samuel J. Palmisano in IBM headquarters in Armonk, New York.

In a press briefing, Ms. Elamparo said the demand letter to Mr. Palmisano involves IBM’s database management software, called the IBM DB2, which IBM supplied and installed a few years back.

GSIS said in early 2008, the IBM software had started showing problems, particularly in handling voluminous chunks of data. IBM upgraded its database system purportedly to enable it to handle unlimited volumes of data.

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.

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

In the letter to Mr. Palmisano, Ms. Elamparo said the GSIS is demanding IBM Corp. to provide a permanent fix to its software and to shoulder the costs the “inherent defects” of the software has caused to the GSIS system and its operations.

Elamparo said the GSIS will also place full-page ads in several national newspapers in an effort to explain to its members and pensioners how the defective IBM software has affected key GSIS services such as loans and claims processing.

Elamparo said almost a year before the system crashed, IBM knew of the problems of its software. “Despite its (IBM’s) knowledge of the problem and despite the admission of IBM Laboratories in Toronto, Canada that the cause of the crash was IBM software, IBM has yet to provide a solution to the problem,” she said.

The GSIS said even Questronix Corporation and SAP—both IBM Corporation’s partners in the GSIS system upgrade program—openly admitted that the problems the GSIS systems are experiencing are rooted on the IBM DB2 database software.

“These problems happened due to the confirmed and well-documented inability of the IBM database management software to fulfill our needs,” Elamparo said.

GSIS Executive Vice President for Operations Consuelo Manansala 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, these being enrollment and school opening seasons in the Philippines.

Ms. Manansala said GSIS members are in dire need of financial support from the GSIS during these months. However, she said IBM seems to be “too big a company to care for the anguish it has brought not only to the GSIS but more so to GSIS members and pensioners.”

She said to this day, despite the promises from IBM Laboratories in Toronto, Canada to come up with a final fix, the GSIS has yet to receive anything concrete from IBM.

Elamparo said the GSIS is now evaluating the extent of the actual damage caused by the IBM softwate, including business-side losses due to delayed transactions and other opportunity losses.

Meanwhile, Manansala assured members that apart from going after IBM, the GSIS has implemented other measures to solve the problem brought by the IBM software.

“We have already brought in foreign and local consultants who are not affiliated with IBM to help us solve these technical problems. We cannot just rely on IBM because, time and again, IBM proves itself incapable of fixing its own problems,” she said.

She added the GSIS has also started working with other database system providers to replace IBM and to upgrade existing hardware, although she noted that migration to a new database would take time.

Ms. Manansala assured GSIS members and pensioners that despite the IBM software crashes, the GSIS has activated its back-up system. She said every data related to the records of every member and pensioner is intact.

“Fortunately, the GSIS has a safety net for emergencies such as these. We assure our members that no data is lost. However, with the series of crashes the GSIS continues to experience and until IBM comes forward to provide a permanent solution to this, we have to bear with the slower processing of transactions,” she said.