Don't pay attention to the politics in  this Washington Post article, "Old Technology Foils Schwarzenegger's Wage Order," but skip to the bottom of the first page for this quote:

The state's payroll system was designed more than 60 years ago and was last revamped in 1970, Hallye Jordan, state controller's office spokeswoman, said in an e-mail.

California is scarcely alone in this: other government agencies, a myriad of private sector businesses, and nonprofits galore are in the same boat. One of the things we discovered in the Y2K problem was that for many organizations, the details of policies and procedures exist nowhere except in the actual code of ancient systems. Want to know what the details of the policy covering salary advances for an employee's vacation time off in the event that the employee resigns mid-vacation? Chances are the HR department won't know, and the legal department is likely to pore over contracts and memos until deciding that they, too, don't know. The answer is often right here--in this 300 page printout of (most of) the COBOL source code for the payroll system.

We can move forward to Web 2.0 and social media, but what are we going to do with the legacy systems and legacy attitudes -- the "drag of the installed base"?