Toyota's Big Fix: An IS Department Turnaround
How Toyota's CIO radically restructured her entire approach to IT and regained the trust of the business.
CIO — At Toyota Motor Sales USA's headquarters in Torrance, Calif., there's a circular patch of manicured earth that separates the IS building and corporate headquarters. A brook winds its way through lush flowers and pine trees, and a terraced path connects the two buildings.
For many years, this was about the only thing the two groups shared with each other.
For the business execs at Toyota Motor Sales (TMS) peering across the courtyard at the Data building, the deep black windows were a symbol of IS's opacity. These executives felt that IS was unresponsive, and they had little clue where the money was going. "One of the complaints was that we spent a lot of money on IT projects, and [the business] was frequently disappointed with the results," recalls Bob Daly, group vice president of Toyota Customer Services. Daly says badly handled projects-such as a delayed PeopleSoft ERP implementation and a protracted parts inventory initiative-led to finger-pointing between the two factions.
Meanwhile, behind the darkened windows of the Data building, Barbra Cooper's IS staff was buried under the weight of six enterprisewide projects and could barely keep their heads above water. Called the Big Six, they included a new extranet for Toyota dealers and the PeopleSoft ERP rollout, as well as four new systems for order management, parts forecasting, advanced warranty and financial document management. Feeling besieged, the IS group made the mistake of not explaining to the business all the things it was doing and how much it all cost. It was a classic case of mismanaged expectations and fractured alignment.
By late 2002, Cooper realized that if she wanted to win back the respect of the business⬠and remain in her post⬠she would have to make some radical changes. A conversation with Toyota Motor Sales' CEO, in which he questioned the sharp incline of IS's spending curve, stopped her in her tracks. In her 30 years in IT, Cooper had developed something of a reputation for coming in to clean up other CIO's messes. Now, she had to take a long look in the mirror and fix herself. And in the summer of 2003, that's exactly what she set out to do.
This is the story of how Cooper completely upended the structure of Toyota's IS department in six months in a bid to weave IT functions more closely into the daily business operations. The process was painful: She changed IS employees' jobs, exposed all of IS's shortcomings and forced her staff into the business offices. But just over a year into the new plan, IS and the business are now standing shoulder-to-shoulder when planning and implementing IT projects. And Cooper is still CIO of Toyota Motor Sales.
