GSIS to sue IBM for bug that delayed transactions

MANILA, Philippines - The Philippines’ state-run pension fund for public employees may sue the local unit of IBM Corp., which claims to be the world’s largest and most profitable information technology company. A series of legal actions are currently being prepared by the Government Service Insurance System (GSIS) for the company’s alleged failure to correct defects in its computer software, the pension fund said. “The software could not absorb infinite transactions contrary to the claims of IBM," GSIS legal counsel Estrella Elamparo said during a briefing. The GSIS blamed a recurring computer glitch in a software system bought from IBM Corp. three years ago. Two demand letters dated May 14 and 21 have already been sent to IBM’s Armonk, New York headquarters, Elamparo said. She added that these documents asked IBM to rectify supposed errors within a given period but these have already lapsed. The pension fund will “file cases in the coming days," Elamparo said. “Through this [briefing], I hope IBM would be compelled to provide solutions." These supposed defects, which reportedly occur at least twice daily, have delayed the processing of transactions of 20,000 GSIS members for two months, Connie Manansala, GSIS executive vice president for operations, said during the same briefing. Of the pending claims applications, a fourth represented retirement benefits, Manansala added. The delay reportedly giving rise to reports that the pension fund has gone broke. However, the pension fund remains capable of processing applications although in a “very slow manner," she said. “There is delay in processing. But we still accept applications over the counter," she said. Before the glitch, the GSIS was able to process 40,000 transactions a day, dispense loan applications in over a minute, and takes just a day to process members’ claims and benefits. Next: IBM rejects claims made by GSIS IBM rejects claims made by GSIS For its part, IBM in the Philippines “completely rejected the claims made by the GSIS." The company expressed its “disappointment with the approach taken by GSIS, which is ultimately not helpful to resolving this matter, nor in the best interest of its members," it said in a emailed statement. “GSIS did not engage IBM in the selection, customization and implementation of this system," the company said in its statement. Although it said that the IBM was the original equipment manufacturer provider of one of the technology vendors engaged by GSIS, the company does not have any maintenance or support contract with IBM. “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 issues," the company said. Although the glitch was identified last year, it took awhile for the GSIS to identify which software was causing it. The said application was reportedly part of the defective software supplied by IBM. Purchased by the GSIS for P80 million, the software application forms part of a package that allows the pension fund to provide services through the internet and automated teller machines. During the last two months, IBM sent two computer “fixes or patches" to repair the glitch but “it didn’t work," she said. This has prompted the pension fund to shift to another platform to replace the defective IBM software, Manansala said. At the same time, Manansala assured that the GSIS remains healthy, having booked earnings worth P53 billion, released total loans worth P41 billion, and paid claims or benefits worth P37 billion last year. With a cash position of P484 billion, the GSIS can still pay members’ claims until 2055, she said. - GMANews.TV