DID YOU HEAR?
IT security is a huge concern for all corporations, but a recent report says corporations should take a close look inside their own company. A report by International Data Corp. indicates around 90 percent of security breaches are internal, with more than 45 percent carried out by disgruntled employees. The report, sponsored by Tivoli Systems Inc., sampled some of Europe’s largest organizations, all of which had experienced security breaches. The report highlighted the distributed, multi-platform nature of many IT systems as a major security problem, with more than 37 percent of security professionals stating that the number of different platforms was the most difficult aspect of administration.
Charles Schwab & Co. Inc. and IBM announced they were beefing up Schwab’s core computer systems to guard against breakdowns that have threatened the surging popularity of online trading. The two companies will work together to install a system that allows Schwab’s mainframe computers to share customer data stored on machines in separate offices. Schwab plans to use IBM’s Geographically Dispersed Parallel Sysplex technology (GDPS), which enables mainframe computers located as far as 25 miles apart to share data as if they were side by side. This technology should help Schwab contend with the constant trading of its 2.5 million online customers.
Companies are paying a steep price to have their Y2K computer problems solved, but insurers will also be feeling the brunt of Y2K in a large way. A report by the Wall Street Journal says insurers could pay between $15 billion to $35 billion for claims and legal costs related to Year 2000 computer problems, potentially ranking the expenditures second only in size to asbestos and pollution-cleanup claims. The estimate of insurers’ Y2K burden comes from Milliman & Robertson Inc., an actuarial firm that has made past estimates for asbestos and environmental claims. Wall Street stock analysts say a $35 billion hit wouldn’t cripple the industry, but that it would eat up about 10 percent of the industry’s surplus. The report says the largest amount of expenditures, $5 to $10 billion, will come from insurers battling their own customers in court over what’s covered under the policy.
It is important to make sure every detail is correct before signing a contract. Lockheed Martin found that out the hard way, as a recent report says a misplaced comma in a contract cost the company $70 million. The report says an international contract for the U.S.-based aerospace group’s C-130J Hercules had the comma misplaced by one decimal point in the equation that adjusted the sales price for changes to the inflation rate. In Europe, commas are used instead of periods to mark decimal points. Lockheed Martin informed its customer, who Lockheed refused to name, of the mistake, but the customer held them to the contract.