Inside Toyota Australia’s tech transformation

A complete organisational restructure of the entire IT division in 2009 which involved consolidation of four level one help desks into a single integrated service desk helped Japanese car manufacturer, Toyota Australia, make improvements in its operational and service delivery.

Toyota Australia Information Systems Division (ISD) service delivery corporate manager, Ellis Brover, says that improvements included millions of dollars of costs savings on outsourced services based on a new tender that clearly defined what services were required and what ISD was prepared to pay for, significant improvements in operational efficiency and the levels of service delivered to the business.

“That [IT] transformation program was all about process improvement, technology renewal and value for money,” he says.

“For example, by bringing related functions together we could clearly see that we had four level one help desks where we could have one. This was leading to customer confusion and high cost.”

While the decision by Toyota Australia to make some manufacturing staff in Melbourne redundant earlier in 2012 did not affect the ISD staff, Brover says that even in IT the division needs to be as competitive as possible.

“The Toyota philosophy is about competitive improvement. Even in IT we always need to do more with less,” he says.

2012 strategy

Following the IT restructure of 2009-10, Brover says the company has been able to introduce new technology such as the IT Infrastructure Library (ITIL). ITIL is a set of practices for IT service management that focuses on aligning IT services with the needs of business.

“We trained and certified all of our staff and created a dedicated service management team,” he says.

“Apart from the process improvement side, we also did technology renewal and we’re still doing that. This involves a comprehensive review of our infrastructure including the modernisation of our data centre, servers and storage.”

In addition, Toyota ISD has upgraded its desktop environment to Windows 7 from XP.

“On the value for money side, we did a cost benchmarking exercise starting in 2010 to understand where we needed improvement,” he says.

“We’ve had a lot of productivity benefits from having up to date technology which works much faster.”

As the organisation has only recently completed the Windows 7 migration, Brover says there are no plans to go with Windows 8 anytime soon.

According to Brover, it moved from an uncontrolled environment with XP to a stable operating system environment with Windows 7. This will allow the organisation to undertake easier upgrades to future versions of Windows.

Keeping on the Microsoft path, the company is currently evaluating the vendor’s Office 365 and similar cloud-based email systems. A decision on whether the company implements Office 365 will be made in early 2013.

“We’ve just finished doing an upgrade to Office 2010 internally so we’ll stick with that before we consider moving,” Brover says. “We also recently installed Windows Server 2010 as a large part of our transformation has involved modernising and replacing a lot of legacy hardware and operating systems.”

For example, Toyota Australia previously used a number of Windows 2003 and 2000 systems.

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Tablets

While the organisation is largely a Microsoft shop, in 2012 it rolled out iPhones and iPads for staff and Toyota dealers.

“There has been much higher productivity [with tablets] as Toyota has a lot of staff who are very mobile,” he says. “There are dealers in rural and remote locations, so for them they get a great deal of benefit out of iPads and mobile devices.”

However, Brover adds that ISD is currently evaluating Windows 8 tablet offerings to see if these could be implemented in the future.

“When we looked at usability and manageability, the iPads stood out as being corporate-friendly and easy to manage in a secure fashion,” he says.

In addition, the company has a BYOD policy that supports iPhones and iPads. This is because ISD has 100 full time IT staff and contractors with outsourcing agreements through Fujitsu for data centre services while NEC provides telecommunications services.

“Hopefully we will have completed our data centre refresh by the end of 2012 which includes firewalls, routers, servers and storage,” Brover says.

Toyota culture

Turning to the wider Toyota business, the response from the board has been “very positive”.

“One of the big changes that happened within our IT division is a cultural change to be more of a business centric division,” he says.”That’s been strongly welcomed by the board and it also means we’re providing the business tools that are needed to get the job done.

“We still have some way to go, and I don’t want to pretend that we’ve finished our journey yet, but our perception with business users is changing dramatically.”

He adds that the total transformation of the ISD division won’t be complete until the end of 2013 but adds that it will “never stop improving” because the Toyota culture is based around constant improvement.

Brover was also insistent that the company does not follow Japanese culture but what is referred to as the “Toyota Way” based on production principles such as continuous improvement.

“There is a lot of alignment between what the IT world is doing and what Toyota has been doing for many decades now in manufacturing,” he says. “That is one of the things that helped us make it a success – there is a natural business understanding within Toyota of what we are doing.”

According to Brover, the transformation of the Australian arm of the business has been used as a case study for other divisions of Toyota.

“The mobility rollout and introduction of ITIL has been the two areas where there has been a lot of interest,” he says. “Where it is going is that IT needs to become more imbedded in the business and more relevant.”

Brover insists that, for CIOs looking to undertake a similar IT transformation, the CIO needs to think about the people and cultural aspects, not just the technology itself.

“Another piece of advice would be to stick with the project, as it can be fairly hard going. Things like introducing ITIL is not an easy process and it doesn’t happen overnight.”