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 / Summer 2009 / Issue 55(originally published by Booz & Company)


Toyota’s IT Transformation

We followed this with a series of conversations with leading Toyota executives. We asked them: “What business process issues do we face in building a more efficient, leaner organization? Is the business model changing? What pain points are impeding our progress? And what could IT do better?”

Moving away from the traditional role of relationship management in IT, we were stepping into the role of business strategist. Through these conversations, we began to appreciate at a much deeper level the nature of business operations. And we learned the language and political skills to use when interacting with business units.

Then, during a series of “bottom-up” meetings, we asked critical business managers and subject matter experts to help us document the business processes they used repeatedly when doing their jobs. We traveled vertically down each process in the vehicle supply chain, and then horizontally across major areas like customer relations, product quality, and finance.

This “top-down” and “bottom-up” work led to a new project list — one that only sketchily resembled the prior set of projects that we had halted. For example, a manager had previously wanted a program to track and trace a vehicle within her limited part of the business, which accounted for only about a third of the supply chain. With our demand management analysis, we could come back and say, “The business identified almost 200 capabilities for improving the supply chain. We grouped them, we looked at the dependencies, and now let’s see if the business needs align well with the program that we can build to make the supply chain more transparent and efficient for everybody.” The result was an end-to-end supply chain track-and-trace project, incorporated into the full business unit’s five-year plan. From here, we are developing the ability to check individual IT projects against each business unit’s five-year strategy, to ensure that we support needs in the proper priority.

The difference between the IT “alignment factor” of just a few years ago and that of today is almost unrecognizable. Not only is the performance of our projects notably better, but the business is looking at IT through a new lens. This is a far cry from when we first slowed down the project work and began our discussions with the business side. Now, rather than weapons being pointed solely at IT when a system goes over budget and turns out to be disappointing when finished, everyone’s accountable. A popular sentiment in IT these days is, “You’re in this with me, Mr. or Ms. Business. Let us work together to manage and deliver your project — and to make sure the project is the right one for the enterprise.”

Author Profiles:

  • Barbra Cooper is the chief information officer at Toyota Motor Sales USA Inc.
  • Karen Nocket is the automotive systems divisional information officer at Toyota Motor Sales USA.
  • Also contributing to this article were Booz & Company Partner Cynthia McNeese and Principal Kumar Krishnamurthy.


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