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GSIS files P100-million damage suit against IBM

June 5, 2009 6:44pm
MANILA, Philippines - State-run Government Service Insurance System (GSIS) has sued IBM, its local unit, and a software supplier after an application reportedly crashed, affecting 90 percent of its operations.

In a 17-page complaint filed before the Pasay City Regional Trial Court, GSIS said it suffered actual damages up to P5 billion as a result of the crash.

Defendants include Armonk, New York-headquartered IBM, its local unit IBM Philippines, and supplier Questronix Corp.

“As a consequence of the database crash, and the resulting inability of the plaintiff to process the thousands of loans and claims of its members and pensioners, plaintiff has been ridiculed and maligned in public fora and various media and its employees were humiliated and cursed by irate members and pensioners," it added.

In March 2009, GSIS’ Integrated Loans, Membership, Acquired Assets and Accounts Management System (Ilmaams) “grinded to a halt" due to “unexpected crash" that affected 90 percent of the state-run pension fund’s operations.

Loans and claims could not be processed while membership records could not be updated and transactions could not be recorded, GSIS claimed.

However, this is not the first time for GSIS as the database crashed again in April.

The ILMAAAMS project is intended to provide an end-to-end software package solution that will handle all information and processing requirements of membership, loans origination and administration, acquired assets and accounts management.

“Defendant IBM Corp. is liable to the plaintiff for the damage caused by its flawed product. Defendant IBM Philippines is equally liable for the damage thus caused not only because it is IBM Corp.’s domestic subsidiary, but, more importantly, because it is through IBM Philippines that IBM Corp. does business in the Philippines," GSIS said.

IBM owns database management system software DB2 that manages the Ilmaams system of GSIS that is supposed to ensure data integrity and to provide security to the data.

“Not only did the DB2 corrupt the data, and therefore failed to ensure that the data was consistently organized as intended, DB2 also caused the database itself to crash, and therefore failed to ensure that the data would continue to be accessible," GSIS said.

“In an agency that services at least 1.5 million public servants and where multi-million transactions are executed day in and day out, a standstill in it computer systems is catastrophic," it added.

The state-run pension fund for government workers said Questronix neglected to inform or warn the limitation of the DB2 software used in the Ilmaams project

“Worse, defendant Questronix, which was engaged as the project’s systems integrator and DB2’s maintenance contractor precisely for its supposed expertise to keep the DB2 software in good working condition, inexcusably failed to prevent the said software from corrupting the data it was designed to manage which eventually resulted in the series of crashes of the plaintiff’s database," it added.

As a result of the public bidding, the P80-million project was awarded to Questronix as main contractor and lead integrator, in joint venture with Team Synergia, Inc. and Tera System Inc. in 2006.

It consists of two systems: Real and Other Properties Owned and Acquired System (Ropoa) which will handle the acquisition and monitoring of acquired assets; and System Applications Products in Data Processing (SAP) which will handle the loans-related transactions, premiums monitoring and maintain the master data for the member or agency accounts. - Ruby Anne M. Rubio, GMANews.TV
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