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December 21/28, 1998

Chief Of The Year

Debra Chrapaty's aggressive technology leadership has helped make E-Trade one of the leading brand names on the Internet

By Gregory Dalton

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Past InformationWeek Chiefs Of The Year

1997: Randy Mott, Wal-Mart

1996: Denis O'Leary, Chase Manhattan Bank

1995: Cinda Hallman, duPont and Co.

1994: Tom Trainer, Reebok

t's 5:30 a.m and Debra Chrapaty, E-Trade's CIO, sits at a conference table with several bleary-eyed staff members as they run through their daily check of the company's information systems just before the opening bell of the U.S. stock markets. A staffer in a bright pink Mickey Mouse shirt is leading the group through a list of changes made--or about to be made--to the company's applications and network. A router was removed here, a file was tweaked there. As a few humorous references are made to excruciating workloads and sleep deprivation, Chrapaty cheerily but firmly weighs in and keeps the discussion moving. The meeting winds up around 6 a.m., and the staff heads off to support the securities trading that lies ahead.

When Debra Chrapaty came to E-Trade in July 1997, these morning meetings--which include personnel at headquarters in Palo Alto, Calif., as well as at data centers in Rancho Cordova, Calif., and Atlanta--were held when the markets opened at 6:30 a.m. Pacific time. That meant staff members called her before the meeting to discuss system changes just ahead of the opening bell. Chrapaty moved the meeting up one hour so the staff could start the day ahead of the markets rather than running to catch up with them. "I said I want everybody in at 5:30 a.m., including customer service and trading," she says. "Everyone needs to understand the changes and how they tentacle into their organization."

Debra Chrapaty

That attitude typifies Chrapaty's approach to managing IT. "I don't want to keep pace with the technology," she says. "I want to be ahead of it."

The 5:30 a.m. meetings, which Chrapaty refers to as change-management sessions, had an immediate impact--system errors dropped 75% during the next quarter. But that was just the beginning. Over the next 12 months, she restructured the company's trading system into a three-tier architecture based on Netscape Application Server for session management and Web-page generation, BEA Systems' Tuxedo as the transaction-processing engine, and an Oracle database. What makes the combination unique, she says, is the customization work E-Trade has done on the software and the fact that all applications were written entirely in reusable Java code.

Chrapaty then set about changing the company's Web site into a financial services portal, where consumers can not only make trades but also get access to loans and purchase insurance policies. All this was accomplished while E-Trade was growing rapidly--E-Trade is adding 2,000 customers a day to a base of 550,000, and the number of trades made daily, which averaged around 15,000 when Chrapaty arrived, now runs about 40,000 to 50,000.

Chrapaty's hard-charging technological leadership has been essential to her company's success in building one of the leading brands on the Internet. It's a major reason E-Trade now accounts for about 2% of all shares traded on the Nasdaq exchange, according to company officials. It's also a major reason Chrapaty was chosen as InformationWeek's Chief of the Year for 1998.

Chrapaty's aggressive style matches the company she works for. E-Trade started in 1982 as TradePlus, a back-end servicer of discount brokers. It was relaunched in 1992 as a PC-based dial-up trading service and was one of the first Web-based trading houses. The company is now leading a group of online traders attempting to establish an all-electronic options exchange that's taking dead aim at the Chicago Board Options Exchange and the American Stock Exchange, which dominate the options markets.

E-Trade also exemplifies the new breed of Web-based enterprises that achieve their market penetration and rapid growth based primarily on their prowess in harnessing information technology. "I came to E-Trade because technology is the product," says Chrapaty. "We're a technology company."

Chrapaty is charged with pushing that technology forward. Fully half of E-Trade's 650 employees report to Chrapaty, who is CIO of E-Trade Group and president and chief operating officer of its technology division, E-Trade Technologies. She controls a budget of more than $100 million--a whopping 39% of E-Trade's $254 million revenue for the year ended Sept. 30.

Chrapaty's former boss at the National Basketball Association, where she was chief technology officer for two years, says her technology prowess is impressive. "She played a pivotal role in bringing us out of the technology Dark Ages." says Ed Desser, president of NBA television, new media. and business development. Chrapaty installed the NBA's first LAN, its first distributed network, and its first standard databases and desktop systems. Chrapaty was able to accomplish all that, Desser says, in an organization "that historically didn't place much emphasis on technology."

Chrapaty wants to do more at E-Trade than simply implement technology. She believes that conventional, project-oriented thinking about IT is a prescription for mediocrity. "The traditional MIS industry is over," she says. "We just put in Oracle Financials and HR--that's not a success factor, that's a given. At some companies, that would be the project for the year. Not here."

Team Building
Chrapaty relies heavily on her technical staff and is careful to develop personal relationships with them. When she came to E-Trade from the NBA, she was afraid that an aggressive New Yorker in a California company could create cultural friction. So she invited members of her staff and a few technology partners to participate in a team-building exercise. They met one day at a water park, where everyone was handed water pistols and instructed to let loose and have fun. Chrapaty wore a T-shirt with a big bull's-eye printed on the front. "It opened her up and made her more accessible," says VP of product development Pam Kramer, who reports to Chrapaty.

"My philosophy is to be outwardly casual and inwardly rigorous," Chrapaty says. Eschewing the trappings of a Silicon Valley power broker, Chrapaty's E-Trade office is decorated with traditional dark wood furniture. And she keeps a cot in the basement for the occasional overnight duty.

People who have worked with Chrapaty say she can be very demanding of herself and others. "Debra is one of the toughest CIOs," says Keng Lim, a former Netscape executive who developed the Kiva Application Server, which became the Netscape Application Server when the company Lim founded was acquired by Netscape. "And she likes to be known as tough."

That toughness is tempered by a sense of humor and a nurturing side that build the confidence of her staff even while she is prodding them to do more, faster, sooner. "She's got an uncanny ability to lead and motivate in one breath and in the very next breath she can discipline," says Doug Nassur, VP of technical operations at E-Trade.