Morgan Stanley’s Return on System NonInvestment

Essay text:

in 1997 2. Key issues in the case • Retail brokerage group never accepted as an equal partner by the rest of Morgan Stanley. Former Dean Witter employees have claimed they felt like disrespected outsiders after merger • Retail Brokerage was not well-integrated with the rest of the company (it ran on different systems platform than the institutional brokerage side, its employee systems were not integrated) • IT infrastructure problems ( e.g.: outdated computer systems, not-upgraded desktop PC’s, printers clogged) ? firm’s technology problems, e.g. : customer Web site • Top brokers started to leave, profits dropped, margins lagged, nearly 1,500 brokers left the company ? as a result of a lack of investment in technology • CEO Phillip Purcell ? focused business strategy on maximizing profits instead of generating revenue ? technology is invested in low priority ? miscalculated and mismanaging areas of business (leadership problems) • June 2005 Phillip Purcell is resigned • New leadership place : John Mack ? address the issue of technology in its Retail Brokerage division, renamed : Global Wealth Management Group • October 2005 :Eileen Murray as head of Global Operations and Technology • Improvements : Broker desktop workstations have been replaced, new systems are better integrated with backend systems (have a better view of client portfolio) • Customer demands: upgrade its Web site for May 2006, the service available online to Morgan Stanley customers dated back to pre-2000 technology • The firm had previously assumed that top clients weren’t interested in online services because they get the direct attention of brokers ? research by Forrester : wealthy customers actually want more hands-on control of their portfolios, and therefore want more tools and services available online • Mack : addressing the issue ‘one-firm culture’ – repair the schism that developed after the merger with Dean Witter 3...