Paying the Price of Technology Failures

Mar 23, 2018

Downtown Honolulu
Credit Wikimedia Commons

High-profile failures of local government technology often make headlines in Hawai‘i. But there’s an everyday cost to those failures that are paid by businesses and citizens around the state. Pacific Business News editor in chief A. Kam Napier has more on the community price of old technology.

Sometime in between Hawaii state government sending out a mistaken missile alert and the city and county of Honolulu losing more than 66,000 sets of personal documents, PBN reporters began to wonder: Is there a cost to Hawaii business of having to interact with agencies that are technologically backwards or inefficient?

In energy, in real estate, in law — the industries we started with — the answer is yes.

For example, Holu Energy, an alternative energy company, tells PBN that it spends somewhere around $5,000 a year on printing and copy costs to submit the physical copies of documents required by the Hawaii Public Utilities Commission.

Downtown Honolulu from Aloha Tower
Credit Ken Lund / Flickr

For attorneys, the fact that many documents can be seen only by physically visiting government offices means dispatching paralegals or even junior associates to find and copy them. Law firms don’t eat this cost, of course, they pass it along to their clients at the going rate. One major Honolulu law firm estimates that its staff spends about one and a half hours per project on such legwork, at rates as high as $200 an hour.

In real estate, certain kinds of transactions are jeopardized by how slowly they get recorded by the Bureau of Conveyances. Specifically, these at IRS 1031 tax-deferred exchanges, and the tax break is worth anywhere from thousands to tens of thousands of dollars — but deeds aren’t recorded quickly enough for qualified buyers and sellers to take advantage of the deferment.