Risk Factor

You may be able to trust your friends with your secrets, but your PC and telephone will rat you out in a heartbeat.

That's the gist of story in yesterday's New York Times about the ever increasing use of e-mail messages, Web site visits, text messages, and the like in divorce proceedings.

One New York lawyer said that 75% of her cases involve some kind of electronic communication, and that she routinely asks for court orders to seize and copy hard drives. Installing spyware on the family computer or stealing a phone to get at the stored text messages are also described as being common tactics used by one or both spouses looking for evidence of say infidelity.

Different states have different rules for admitting this type of information, but most lawyers interviewed said that if something is stored electronically, if will likely be used.

One more benefit of living in a computerized age.

"We donâ''t need hackers to break the systems because theyâ''re falling apart by themselves,â'' said Dr. Peter Neumann in an New York Times article, "Who Needs Hackers?" discussing how IT systems are falling apart. Peter and several others discuss the increasing complexity of IT systems today, and how system design and development haven't been keeping up, often as a matter of convenience more than lack of knowledge (which I also argue in my IEEE Spectrum article on "Why Software Fails.")

Some 19 years ago to almost the day (11 September 1988), the NY Times published a story titled, "In Computer Behavior, Elements of Chaos." In this article, the late Dr. Alan Perlis postulated that the break down in networks that were occurring with greater regularity during the late 1980s, "lies in the inevitable disparity between the real world and the models used to simulate it. Even the finest computer simulation is only an approximation. At some point that cannot be determined in advance, the discrepancies between reality and the computer's simplified world view will lead to a chaotic breakdown."

"The only way we can improve our systems is to be prepared to continually redesign them when they fail - which they almost certainly will."

Some things never seem to change, eh?

A nice little column by consumer reporter David Lazarus in the LA Times today on privacy - or the lack thereof - when a person signs up for a bundled subscription package, e.g., voice, video and Internet services, from one company.

According to Lazarus, if you sign up for Time-Warner's package in California, for example, the privacy agreement states that the company can monitor watch you watch on television and who you call, but what sites you surf and things you buy. It also says that Time-Warner is going to keep that information as long as you are a subscriber and up to 15 additional years, supposedly for "tax purposes."

And one more thing - Time-Warner says that it can also monitor what you send in e-mails if you use their service.

Given all this information about what you're doing and thinking, you'd at least think its customer service would be better. Or maybe that is why it is rated poorly.

One of the first things one learns as a risk analyst is that you better develop a tough skin. No one wants to hear about potential problems, and some people, as today's story in the Wall Street Journal (subscription required) points out, can get down right nasty about it.

In one example, the CEO of a software company got so angry about a a product continuing to slip its schedule, that he decided to make an example and fired the VP who told him about the latest slip. The CEO wanted to send a message, in other words: "I finally got so exasperated that I let the word go out that I simply did not want to hear any more 'excuses' about why the schedule could not be met".

Low and behold, no one was willing to be the next messenger ("No one ever came forward to tell me the truth about the status of the program for a very long time thereafter") which in the end, he admitted, cost the company even more time and money since no one was making decisions with objective information.

Funny how that CEO was evidently surprised by this - shoot people with bad news, get no more bad news, but reality still bites you in the butt anyway!

One of favorite maxims in relation to risk communication is by the late Nobel Prize winning physicist Richard Feynman who said in the relation to the NASA Challenger disaster and NASA's reluctance to hear bad news, "For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled."

Again, you can shoot all the messengers you want (or embrace only those who bring you good news), but what is - is. Live with it.

In June, I wrote about the AMA's approval of a policy that at the time was seen as likely increasing the use of implanted chips using RFID technology to record and transmit patient medical history.

The Associated Press has recently released an investigative news story questioning the safety of these chips. Some medical studies indicated that these chip implants appeared to induce malignant tumors in some lab mice and rats. While pointing out that what happened in the lab mice and rats doesn't necessarily mean the same thing will happen in humans, a more compelling question raised in the article was why these studies did not seem to be reviewed by the FDA when it approved the use of chip implants.

As acknowledged by the FDA, there are some risks associated with chip implants, "The potential risks to health associated with the device are adverse tissue reaction, migration of implanted transponder, compromised information security, failure of implanted transponder, failure of inserter, failure of electronic scanner, electromagnetic interference, electrical hazards, magnetic resonance imaging incompatibility, and needle stick."

It is way too early to see if this possible new health risk will slow down further the use of chip implants (VeriChip, the company that has been approved by the FDA to sell chip implants did see its stock drop by more than 10% on the publication of the AP story), but in a related story, the California Senate passed legislation that blocks the mandatory use of ID chip implants in employees. The bill had already been passed by the State Assembly and now awaits action by Gov. Schwarzenegger.

The Conference Board, a leading business thought leadership organization, has released a report on the trend of companies using virtual worlds. As the Conference Board notes in its press release,

Leading companies including Cisco, IBM, and Dell already have a substantial presence in Second Life. Retailers such as Circuit City and Sears also have a presence, and information services providers such as Reuters have built large installations that offer a menu of financial data, including videos of up-to-the-minute news clippings.

The Conference Board report discusses eight questions executives should ask about whether they should create a presence in virtual worlds, ranging from "What is your entry strategy" to "Is your IT department up for the job?"

You can tell that virtual worlds are more than a fad when the Conference Board writes a report on it.

In today's New York Times, there was a letter referring to the mid-August tragic fire at the Deutsche Bank building in New York City that cost two fire fighters, Joseph Graffagnino and Robert Beddia, their lives. I have been following the fire and its aftermath because of the risk management issues involved.

The letter struck me because it reminded me of what happens in so many IS&T project failures:

Many construction and demolition problems occur because of unrealistically low budgets or severe scheduling restrictions placed by the buildingâ''s owners when soliciting bids. Building owners trying to foist low budgets on contractors will generally require the contractor to cut corners.

Time will tell whether these were contributing causes to the eventual fire and loss of life, but if it were an IS&T project failure I was evaluating, experience would say to give it a high probability.

Zalmai Azmi, the FBI's CIO, was reported in Federal Computer Week as saying that, "Cultural differences are the biggest obstacle preventing intelligence agencies from starting information-sharing programs."

He reportedly went on to say that, â''The introduction of new blood would help do things differently."

Good luck. I thought that too over thirty years ago when I worked as a junior engineer in the Defense Department. I still hold that same thought today.

I wonder if Azmi is hinting that there may be problems behind the scenes with Sentinel, the follow on to the infamous Virtual Case File system. Information-sharing is a critical aspect of Sentinel.

Is Azmi worried that even if Sentinel is built, FBI agents won't be inclined to use it, or they will find ways to keep information from being shared with other agencies?

" ... the technology road is bumpy... This is life in the technology lane"

And it is full of pot holes. No, that wasn't in Steve Jobs open letter to early adopters of Apple's iPhone, but it was at least implied.

Mr. Jobs had to issue the apology after thoroughly irritating customers who shelled out $599 a few months ago for their new iPhone only to learn that Apple was cutting its price by $200 to try to gain a strategic if not insurmountable market share during upcoming Christmas season.

Jobs appears to be following former HP Chairman and CEO Lewis Platt's old dictum, â''We have to be willing to cannibalize what weâ''re doing today in order to ensure our leadership in the future. Itâ''s counter to human nature, but you have to kill your business while it is still working.â''

Investors didn't take to kindly to Jobs announcement, as they viewed it as Apple cannibalizing its earnings too soon and therefore their investments. Apple also didn't help matter much by announcing a new iPod which appears a lot like an iPhone without the calling features. Apple's stock dropped about 5% in all this week.

Probably more of an issue is that many folks who bought iPhones now think they were not only out $200, but went from being cool to being uncool. Even my local small town newspaper has an article about how much coolness that $200 bought.

It will be fascinating to watch whether Jobs $100 rebate offer to those customers who bought the iPhone early will be mollified. It will also be interesting to see how Apple prices products in the future - it will be hard to have another rapid price drop without driving away a sizable portion of your early adopters.

A bigger problem problem may be news stories like the one that appeared in today's Newsday about some iPhone customers getting monthly bills in the thousands of dollars. One man received a $4,800 phone bill when he got back from a Mediterranean cruise. He brought along his iPhone which kept checking his email accounts, all at international phone rates.

While his iPhone contract with the AT&T Web site says: "Substantial charges may be incurred if phone is taken out of the U.S. even if no services are intentionally used," the point is made in one of six different agreements an iPhone user has to agree to.

As pointed out last July by Wired magazine, the iPhone contract is very long and legally murky, and warned potential iPhone users that they needed to spend some extra time reading the 6,700 word contract. If you don't, you may get surprised, as obviously the person with the $4,800 phone bill did.

If all this buzz starts to create a perception that it is better to be a late adopter of Apple's products, investors may be even quicker to sell the company's stock when things go a bit funny.

In case you missed it, this week was the 25th anniversary of the first personal computer virus. The virus, dubbed, "Elk Cloner" was created for the Apple II by Rich Skrenta, when he as a ninth-grader as a prank.

It is also the fiftieth anniversary of the launch of the Ford Edsel, which became synonymous with the word blunder.

Just thought you'd want to know.