Charles Schwab & Co.

Topics: Strategic management, Management, Corporation Pages: 4 (929 words) Published: January 30, 2014
EXECUTIVE SUMMARY

IT had become a problem for Charles Schwab & Co., a big financial services company. IT staffers’ responses to business requests had become slow and expensive but the company kept throwing money at overdue projects because it didn’t see an alternative. For years now, companies like Schwab seeking to deliver higher business performance by harnessing IT have focused on alignment. But even at companies that were focused on alignment, business performance dependent on IT sometimes went sideways, or even decline.

General ineffectiveness at bringing projects in on time and on budget and ineffectiveness with the added complication of alignment to an important business objective becomes the two main issues to IT disappointment and failure.

In order to help a company moving to high effectiveness, emphasizing simplicity, “rightsourcing” capabilities and creating end to end accountability are the three critical principles. Before going further alignment, a company should first focus on its effectiveness. Research shows that company with IT spending lee than average usually grow considerably higher.

Charles Schwab & Co. has recently taken some substantial steps in the direction of effectiveness and alignment by lunching an advanced utility, which provide customers with additional value while reducing Schwab’s costs to competitive level.

CURRENT SITUATION

“Alignment Trap” – High IT alignment to business objectives but low efficacy in completing IT projects. •“IT Enable Growth” – High IT alignment to business objectives and high efficacy in completing IT projects. •“Maintenance Zone” – Low IT alignment to business objectives and low efficacy in completing IT projects. •“Well Oiled IT” – Low IT alignment to business objectives but high efficacy in completing IT projects.

IT faces some challenges when they try to align business goals. In large companies, which have several business units, IT might be highly aligned with the goals...
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