Schwab's leap of faith

FINANCIAL SERVICES GIANT Charles Schwab is a leader in online trading and benefited greatly from the early adoption of online services for its customers. InfoWorld Features Editor Owen Linderholm spoke to David Pottruck, CEO of Schwab, and Dawn Lepore, CIO, about the role of IT and the value of IT for the company and in general.

InfoWorld: Does IT provide a real business value to Schwab and to a modern business in general, and if so, how can that be measured?

Pottruck: One of the simple things we look at as a core measure of our company's efficiency is the revenue per employee: We look for the revenue per employee to go up each year. We also have the notion of the revenue per unit of work, and oftentimes the revenue per unit of work goes down because of price competition. That means if you want revenue per employee to go up and revenue per unit of work is going down, units of work per person have to go up dramatically. Technology is indeed how we do that. So we attribute most of our improvement in revenue per employee to the employment of technology to automate work or eliminate work or simply make people more efficient and more effective.

InfoWorld: In terms of the relative importance of IT to Schwab and businesses in general, is it more on day-to-day operations, day-to-day revenue generating, or business strategy?

Lepore: I think it's both. In some companies one person has the day-to-day operations and the other person has long-term strategy with technology. I've always been a believer that one person should have both of those roles. You build your credibility and your right to have an opinion on the strategy by delivering on a day-to-day basis. You really have to do both because technology has to further the strategic goals of the company and sometimes even drive the strategic goals of the company. It also has to be able to deliver on behalf of your clients and your customers. It's too easy to get too disconnected from what it's like to really serve clients on a day-to-day basis with technology, so I really do think that both sides are exceptionally important.

InfoWorld: How much understanding do business executives need nowadays about information technology? And how much should IT executives know about business?

Pottruck: One of the things we are working on at Schwab is training our businesspeople to better understand and work with tech people. The ability of businesspeople to completely appreciate the challenge of technology people and how to work with them is crucial.

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