Contents

• This paper is based on the following case study -
• “I would describe it as almost 1970s-like,” said Barbra Cooper of the basic and somewhat insular IS
organization she inherited when she joined Toyota Motor Sales as CIO in late 1996. She found PC
and network management, and such basic IS disciplines as business relationship and financial
management, lacking, with the result that “No one understood the cost of delivering IS.” Far from
being business partners, IS personnel, when they were consulted at all, were little more than
“order takers.” More often, business units that perceived in-house IS as unable to deliver were
buying their own IS with no thought to architecture standards, systems integration, or business
benefits.
• 
When a downturn in the global economy prompted Toyota executives to look more closely at
the American division’s spending, Cooper, already coping with local complaints about IS’s
bureaucratic unresponsiveness, found herself under pressure to explain costs as well. She
subsequently formulated, over the course of many weeks, a strategy that would focus the energy
of a decentralized, highly transparent IS organization on the company’s major business segments.
A team of eight staffers assembled by Cooper to make her vision reality generated a list of 18
initiatives, each of which was provided with a project owner, a team, and a mechanism for
evaluating the team’s success.
• Improved alignment with the business side was at the top of the list of initiatives. Cooper identified and embedded in all the business units top-performing senior personnel, whom she called divisional information officers (DIOs). Accountable for IS strategy, development, and services, the DIOs were charged with forging relationships with, and gaining the respect of, the high-level business executives who headed the management committees on which the DIOs sat. “I still believe in managing IS centrally,” insisted Cooper, “but it was incumbent on us to physically distribute IT into the businesses. They could provide more local attention while keeping the enterprise vision alive.”

• DIOs’ accountability and responsibility was for the vertical area they served. Corporate
Manager of Business Systems Ken Goltara, for example, headed up a small group of internal
customers all of the associated vehicle-ordering systems, logistics, and dealer portals. For Ken’s
customers, it’s a one-stop shop as he handles all the systems for the Toyota, Lexus and Scion
organizations.
• 
Situating approval for all major IT projects in an executive steering committee (ESC) chartered
by Cooper served to further strengthen the IS-business bond, and fundamentally altered
accountability for projects. The committee included, Cooper, her boss, Senior Vice President
and Planning and Administrative Officer Dave Illingworth; Senior Vice President and Treasurer
Mikihiro Mori; and Senior Vice President and Coordinating Officer Masanao Tomozoe. The goal
for the ESC was to shift responsibility for IS project vetting and monitoring away from IS towards
the business by exposing IS’s inner workings to Toyota Motor Sales’ business side.
• 
Project funds were to be maintained by the ESC as a single pool of cash, distributed on a
project-by-project basis as each phase of a project’s goals was achieved. This window into what was
spent (and not) would enable other projects to identify and go after unexpended funds, and the
administrators to reallocate those funds accordingly. The more regular pacing of projects
throughout the year, moreover, eliminated spending swings.
• 
Many business executives initially balked at the new approval process. Instead of following the
prescribed channel for seeking funding through the ESC, they allied themselves with lower-level
business sponsors engaged with IS in business case development and implementation. After about
half a year of dealing with senior-level business execs’ unwillingness to take responsibility for IS
projects, Cooper dictated that the ESC would not approve any project not backed by a higher-level
business executive, a corporate manager at the VP-level or above. With business executives, not the
IS executive, held accountable for achieving the business benefits of IS projects, both departments
had the same stake in the outcome.

Description

This paper answers the following questions on the case study -
• How would you describe TMS’s new IS structure? [1]
• What are its advantages [3]
• What are its disadvantages [3]?
• Which archetype describes the new structure? [1]
• How did the new structure change decision rights? [1]
• How did it change accountability for IS project success? [2]
• Why, in your opinion, would business executives shy away from the new approval process? [2]
• In your opinion, will Cooper’s demand that each project be backed by an executive solve the problem? Explain. [2]