At Charles Schwab Corp., the chore of keeping technology expenditures in check as the sputtering stock market wreaks havoc on revenues falls to Dawn Gould Lepore, the San Francisco brokerages vice chairman and chief information officer.
As others in the firm recently turned their attention to layoffs and cost-cutting measures, Ms. Lepore focused on sustaining tech-development momentum in a cost-conscious way, and matching computing power to declining demand.
Schwabs technology department is taking a more measured approach to rolling out consumer technologies and using flexible computing arrangements to contribute to the firms belt-tightening, she said.
The leaner technology budget is dictated by a plan Schwab laid out March 23, to eliminate as many as 3,400 positions 13% of its work force in the second quarter. Schwab, like many of its competitors, is taking these steps in reaction to the anemic stock market, which has driven once active technology-stock traders away in droves. In February, Schwabs daily trading volume fell 31% from a year earlier.
The trickiest part of managing technology spending in a volatile market is accounting for ups and downs in computing demand, Ms. Lepore said. We have to scale back even when ramping up and allow technology to be a shared advantage in tough and in good markets, she said in a speech Wednesday at GartnerGroup Inc.s Internet and eBusiness Conference in New York.
Equally important is to keep a hand in innovative technology, even when increasingly conservative customers are shying away from such services.
The economy is still dominated by the Internet, but with a little less praise, Ms. Lepore said. We cant be lulled into thinking that the Internet craze is over. It will continue to evolve.
Still, Schwab is backing off from making any new investments in wireless financial services for now. It has been offering wireless access to account balances and trading through its Pocket Broker product since last year.
Schwab plans to continue to support Pocket Broker, but will sit back and observe how customers are actually using it before investing further in new functionality. We are scaling back, but not too far, because it will be an important channel, Ms. Lepore said.
It is also using less computing power. In peak trading periods, about 100,000 customers accessed its Web site at the same time, and to keep up the company was installing new servers daily as the market closed, Ms. Lepore said. Now it is removing some of those servers.
We dont need as much overall capacity and hence we are de-installing some of our equipment, she said.
But Schwab still has multiple data centers, including two load-sharing centers and a tertiary one to take over in case of emergency.
Our philosophy has not changed at all in these economic times, Ms. Lepore said. If you scale back on backup, it is a big mistake.
From Our Archive