Malfunction

As the insurance system’s computers lie idle and long queues form in its offices, an exasperated GSIS decided to sue the computer giant responsible for supplying chronically malfunctioning software.

At the same time, computer giant IBM is threatening to sue GSIS for libel. This is for saying that the software GSIS purchased from the company is faulty.

In the meantime, tens of thousands of pensioners and government workers are going through hell to access benefits due them from the public insurance system. As much as 90 percent of the GSIS’s computers have been affected by the software failure.

Respondents in the case filed by the GSIS are IBM Corporation, IBM Philippines and business partner Questronix Corporation. The suit seeks P100 million in damages for breach of contract in the supply of defective software.

The public insurance service earlier purchased a system worth P80 million from IBM through Questronix. This was to implement the GSIS’s Integrated Loans, Membership, Acquired Assets and Accounts Management System (ILMAAAMS). This project should have fully computerized the operations of the insurance service and, as a consequence, speed up processing of benefits to millions of members.

As in most big-ticket system purchases such as the GSIS did with IBM, the supplier is supposed to not only install the system and ensure it is operational. The supplier is also accountable for after-sales services, training of personnel in the use of the new system and repair of the system should it show problems in operation.

After complaints regarding frequent breakdowns, Questronix director for business solutions Bert Bartolome admitted in a May 15, 2009 letter to the GSIS that indeed it was the IBM DB2 software that is the source of the malfunction. In that same letter, the local IBM partner said the final solution to the problem could only come from the Ontario laboratory of the American computer company.

The Ontario laboratory, for its part, stated that there are technical limitations to the software. These limitations were not mentioned by IBM and Questronix when they sold the system to the GSIS.

In order to solve the problem, IBM offered GSIS supplemental software to patch the deficiencies of the original system. That patch did not work either. The computer system continued to malfunction.

After the Band Aid software failed, IBM now appears to have changed its approach to the problem plaguing the GSIS system: bullying the buyer.

The computer giant is now saying that since it was Questronix that made the sale to GSIS, the matter is entire Questronix’s. IBM is, in short, washing its hands of any responsibility for the billion-peso problem and dumping the same on the laps of its Filipino partners.

This is akin to holding, say, GM car dealers entirely responsible for defects in automobiles produced by the now bankrupt US car giant. In every precedent, it is GM that has recalled vehicles sold through its dealers to replace defective parts free of charge. That is the standard practice from which IBM is now departing.

It is akin to saying that it is the cigarette vendor who ought to be held responsible for any adverse effects on health the product causes. In the US, the huge cigarette manufacturers have shelled out billions of dollars to pay out damage claims filed by consumers.

Faced with the specter of entirely shouldering a huge damage suit, Questronix has begun to change its tune. The local partner of IBM is now saying, in effect, that there was nothing wrong with the system it sold GSIS. But its earlier letter admitting the IBM software to be defective and responsible for the malfunction flies in the face of whatever new posture it might adopt in response to the damage claims.

IBM is now obviously just trying to protect its reputation when it threatens to file libel charges against the GSIS. But that reputation is now completely shot. Unless, by some techie’s magic, the computer system gets up and running, the tens of thousands of GSIS members now lining up for hours to avail of benefits know that the delay is due to a substandard product.

IBM is now sounding like GM and Chrysler, now both bankrupt, who continue to maintain that nothing is wrong with their cars. Well, the fact that they are now bankrupt means they are not selling enough of their products to make the two carmakers financially sound.

The GSIS should press on with their suit and hope to win a ruling before IBM goes the way of GM and Chrysler.

I am no compute expert. But from the looks of it, it seems the computer system installed by the GSIS is doomed.

IBM does not want to acknowledge responsibility for the malfunctioning software. Its local subsidiary and its sales partner are both saying there is no problem. All of the respondents to the GSIS damage suit are now saying that the only case at hand is one of libel against their companies’ good names.

The behavior of these peddlers of software and hardware is not very encouraging. Is seems that the battle will be waged in the courts and not in the software labs.

The greater likelihood is that, out of sheer necessity, the GSIS will have to replace the defunct IBM system with something else. The cost for solving the problem will ultimately be shouldered by the members of this insurance system.

If IBM is not made to pay for peddling a lemon, it will be ordinary GSIS members — like me — who will ultimately pay for corporate irresponsibility on the part of the suppliers. That makes the grievance personal.