How Toyota's CIO radically restructured her entire approach to IT and regained the trust of the business
READER ROI
- Why Toyota's business side hated its IS department
- How Barbra Cooper came up with a plan to save IS
- How IT changed its stripes without retrenchments or great angst
At Toyota Motor Sales USA's headquarters in Torrance, California, 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 enterprise-wide 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 CIOs' 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.
The Bad Old Days
When Cooper joined Toyota Motor Sales in late 1996, her reception was lukewarm. She was an outsider in a company that prizes employee loyalty. Employees with "only" five years of experience, including CFO Tracey Doi, call themselves "newbies".
Cooper was surprised to find that IS was so isolated and primitive. "I would describe it as almost 1970s-like," she says. Business units were buying their own IT systems because in-house IT couldn't deliver. There were no PCs or network management. And basic IT disciplines - such as business relationship management and financial management - were largely absent. "No one understood the cost of delivering IT," she says.
The little face time that IS did have with the business managers was more in an "order taker" role rather than a "let's build the solution together" partnership. Relationship managers Cooper inserted in each business unit were powerless to effect any real change.
Worse, business execs cut deals with their go-to guys in IS for project approval and funding, with no thought to architecture standards, systems integration or business benefits. "Every creative person around here went running with their list of their ideas to their key IS contact who they knew the best," recalls Doi.
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