GSIS'S BIG BUGS

The Philippine Star
06/12/09

For an organization founded in the late 1930s, recent changes to its overall operating system have become a most painful – if not frightful – experience. I am referring here to the Government Service Insurance System, pension fund caretaker of the interest of more than 1.5 million state employees.

When you talk about GSIS these days, it would be hard to separate it from its president, Winston Garcia, an appointee of President Gloria Macapagal-Arroyo who is believed to be strongly linked with the powerful Garcia clan that rules the province of Cebu.

GSIS and Garcia have been the object of much media exposure in recent years ever since the state pension fund decided on a high-tech journey that called for the computerization of all its records.

During the early days of its records-straightening quest, the complaints supposedly came from a rogue gang preying on the inefficiency of the GSIS’s fragmented and antiquated manual data recording system. In fact, quite a number of ghost members had been weeded out of the listing.

Other anomalous discoveries included delinquent repatriation of members’ debts by several government units, loans spuriously made on behalf of members, and pension funds of deceased members still being withdrawn purportedly by a syndicate.

In the process, there were also legitimate concerns, such as records of members erroneously inputted in the computer database, which inadvertently caused delays in the processing of loans or sick benefits. It’s easy for these kinds of complaints to quickly spread around and make people lose sight of the bigger picture, however noble it may be.

Long-term view

At this point, I would like to interject that GSIS and Garcia have always harped on the objective of solving long-standing problems, including the low collection efficiency of the agency’s loans and premiums due to decades of neglect of appropriate records and inefficient remittance and collection processes.

All these problems had undermined the long-term viability of the GSIS, and at a time when the Social Securities Service, the private sector’s counterpart, was reeling with the threat of bankruptcy, this did not add up to a comfortable picture.

Computerization seemed to help GSIS, and for the next years, hefty increases in profits were being reported. The actuarial life was also slowly being extended, making for a more robust outlook for that would rebound to better benefits for GSIS members.

As with most endeavors to migrate records from a manual system to a computer platform, bugs will be solved and there is an end seen to most of the problems, particularly those that were enumerated above. As complaints subsided, GSIS decided to move ahead with succeeding phases.

More woes in Phase 2

The next step was to bring e-commerce to the fingertips of each and every GSIS member and pensioner. Clearly, the benefit of moving fully to “paperless” transactions to GSIS was in the hundreds of millions of pesos yearly – and this is just by saving on mailing and postage, check issuance, and other administrative costs.

But as well-meaning change is oftentimes misunderstood, some members found this next level of computerization to be just a tad beyond their ken. There were complaints of sick and disabled pensioners being forced to make long journeys to the dedicated transaction machines.

Not many appreciated being forced to learn how to withdraw their money using an electronic card, or to travel farther to a GSIS vending machine instead of to the nearest bank to withdraw previously mailed check payments.

These types of complaints eventually faded away, as people learned to cope with the new system. But there was one that just did go away.

A growing number of members and pensioners were starting to complain of difficulties in withdrawing loans or their pension checks using the electronic cards during certain periods. Initially, these glitches were being blamed by Garcia on saboteurs who he said were out to ruin his reputation.

System failures

For three years, there were intermittent system failures that would disrupt the disbursement of funds from the GSIS teller machines. Complaints would be heard every so often, to be silenced when the machines were smoothly running again.

Then in end March this year, GSIS said its IBM database management system called DB2 suffered a major collapse, affecting 90 percent of the GSIS operations, including processing of loans and claims and updating of membership records.

Two days later, the system collapsed once again and despite repeated attempts, GSIS said it was unable to restore the system. When the pension fund firm informed the local contractor of the problem, it was told weeks later that the DB2 was inherently unable to process the amount of data that was in the system.

Hounded by thousands of members who were irked at being poorly served, and with its back against the wall, GSIS sued IBM and its local provider for selling them a lemon. IBM has chosen to fight back by filing a libel suit against GSIS.

Members at losing end

What these latest developments are telling us is that GSIS members will have to brace themselves for some major discomfort in the next few months. As the war develops on the legal front, GSIS may not receive the promised fix for the bugs that seem to be limiting the DB2’s performance.

In the meantime, let’s hope that GSIS will have a fallback strategy that will enable it to continue processing and disbursing loans and pension payments without the help of its electronic cards and teller machines.

If I were a GSIS member, I could empathize with GSIS and Garcia for being on the raw end of a deal. But then again, I could be really cranky with GSIS for not getting the services that I should get, bugs or no bugs – and for not being told what to expect now that IBM and its local contractor prefer to fight it out in the courts.

As things stand, everyone wind up as losers – IBM’s reputation as reliable service provider, GSIS much acclaimed computerization program, and most of all the members who were promised to be provided with modernized services. Woe!

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.