case study 9 1 it governance at toyota

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IT Governance Case Studies Collection

The “IT Governance Case Studies” category is an insightful resource for CIOs, IT executives, and technology leaders. It offers a curated collection of case studies that showcase real-world examples of successful IT governance implementation. As part of our CIO Reference Library, this category aims to help IT leaders learn from the experiences of other organizations and apply practical insights to their own IT governance initiatives.

IT Governance is crucial in ensuring that IT investments support and drive the business strategy of an organization. Below is a table with examples of IT Governance across various industries.

Each of these examples highlights the practical implementation of IT Governance principles to manage IT resources effectively, ensure compliance, and align IT strategies with organizational objectives across different industries.

By exploring this category, you will gain insights into:

• The challenges and opportunities faced by organizations in various industries as they implement IT governance initiatives
• These organizations employ IT governance frameworks, methodologies, and best practices to achieve desired outcomes.
• The process of securing stakeholder buy-in, setting objectives, and establishing governance structures and policies
• The role of communication, change management, and continuous improvement in ensuring the success of IT governance initiatives
• The impact of IT governance on strategic alignment, risk management, resource optimization, and overall organizational performance
• Lessons learned and recommendations from organizations that have successfully navigated the complexities of IT governance implementation.
• The influence of emerging technologies and trends, such as digital transformation, cybersecurity, and data privacy, on IT governance practices and outcomes

By staying up-to-date with the latest IT governance case studies, CIOs and IT leaders can gain valuable insights and practical knowledge to inform their governance initiatives. Visit this category regularly to discover new case studies and learn from the experiences of organizations that have successfully implemented IT governance, driving strategic decision-making and fostering business growth and success.

IT Governance Example: Optimizing Technology Investments in a Higher Education Institution

Learn how an IT governance framework optimized technology investments in a higher education institution. Discover a real-world example and best practices.

Case Study: A Holistic IT Governance Framework

How does IT Governance ensure successful strategy implementation? Read On!

Case Study on Effective IT Governance

The proper implementation of corporate governance is an absolute necessity to ensure accountability and data transparency, support healthy competitiveness among organizations. This paper discusses challenges and highlights the importance of governance. It provides several examples of good governance giving special attention to effective IT governance, whose implementation has now became

Case Study: How does IT Governance Drive Business IT Alignment?

This study offers an in-depth analysis of IT Governance’s role in achieving Strategic Alignment within organizations, highlighting key findings and implications for business and IT leaders. Excellent Read! (150+ pgs)

Sample: Reengineering IT Governance

This comprehensive sample provides structure, policies etc. to implement IT governance in your organization.

Case Study: How to Assess and Improve IT Governance?

How to design an effective IT Governance Capability? Read On!

Case Study: Approach to IT Governance

A case study in IT Governance

Sample 1: IT Governance in the Enterprise

This presentation provides an overview of IT Governance in the enterprise. This sample can be used as a template to create an IT Governance capability in your organization.

Case Study: How to Improve Stage Gate Performance

This case study explores the impact of the quality of information on the results achieved through the stage gate process. An excellent discussion for the CIO to follow to understand why a perfect stage gate is not enough without reliable inputs. Excellent Read! (200 pages) This case study will help

Case Study – Project Portfolio Management (PPM) Implementation

This case study explores the implementation of Project Portfolio Management (PPM) with a focus on the value delivered. It discusses the causes of PPM not delivering to its potential and proposes ways to overcome them. Excellent Discussion for the CIO! (100+ pages) As a CIO, if you are struggling with:

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Managing and Using Information Systems: A Strategic Approach, 7th Edition

ISBN: 978-1-119-56115-6

October 2019

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This revised and updated seventh edition discusses the business and design processes relevant to IS, and presents a basic framework to connect business strategy, IS strategy, and organizational strategy. Readers are guided through each essential aspect of information Systems, including information architecture and infrastructure, IT security, the business of Information Technology, IS sourcing, project management, business analytics, and relevant IS governance and ethical issues. Detailed chapters contain mini cases, full-length case studies, discussion topics, review questions, supplemental reading links, and a set of managerial concerns related to the topic.

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The Contradictions That Drive Toyota’s Success

by Hirotaka Takeuchi , Emi Osono and Norihiko Shimizu

Summary .   

Reprint: R0806F

Toyota has become one of the world’s greatest companies only because it developed the Toyota Production System, right? Wrong, say Takeuchi, Osono, and Shimizu of Hitotsubashi University in Tokyo. Another factor, overlooked until now, is just as important to the company’s success: Toyota’s culture of contradictions.

TPS is a “hard” innovation that allows the company to continuously improve the way it manufactures vehicles. Toyota has also mastered a “soft” innovation that relates to human resource practices and corporate culture. The company succeeds, say the authors, because it deliberately fosters contradictory viewpoints within the organization and challenges employees to find solutions by transcending differences rather than resorting to compromises. This culture generates innovative ideas that Toyota implements to pull ahead of competitors, both incrementally and radically.

The authors’ research reveals six forces that cause contradictions inside Toyota. Three forces of expansion lead the company to change and improve: impossible goals, local customization, and experimentation. Not surprisingly, these forces make the organization more diverse, complicate decision making, and threaten Toyota’s control systems. To prevent the winds of change from blowing down the organization, the company also harnesses three forces of integration: the founders’ values, “up-and-in” people management, and open communication. These forces stabilize the company, help employees make sense of the environment in which they operate, and perpetuate Toyota’s values and culture.

Emulating Toyota isn’t about copying any one practice; it’s about creating a culture. And because the company’s culture of contradictions is centered on humans, who are imperfect, there will always be room for improvement.

No executive needs convincing that Toyota Motor Corporation has become one of the world’s greatest companies because of the Toyota Production System (TPS). The unorthodox manufacturing system enables the Japanese giant to make the planet’s best automobiles at the lowest cost and to develop new products quickly. Not only have Toyota’s rivals such as Chrysler, Daimler, Ford, Honda, and General Motors developed TPS-like systems, organizations such as hospitals and postal services also have adopted its underlying rules, tools, and conventions to become more efficient. An industry of lean-manufacturing experts have extolled the virtues of TPS so often and with so much conviction that managers believe its role in Toyota’s success to be one of the few enduring truths in an otherwise murky world.

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• Case Study 9-1 IT Governance...

Case Study 9-1 IT Governance at Toyota By Rajiv Kohli, William & Mary On January 1, 2019, Toyota...

Case Study 9-1 IT Governance at Toyota

By Rajiv Kohli, William & Mary

On January 1, 2019, Toyota Systems Co., Ltd was formed with a merger of three IT subsidiaries that had been developing digital and communication technologies to support Toyota's push into connected cars.i But the foundation for the transformative role of IT at Toyota was laid by Barbra Cooper, the first Chief Information Officer (CIO) of Toyota Motor Sales, long before this merger.

When Barbra Cooper came to Toyota Motor Sales in 1996, Toyota's IT was in trouble. Though Cooper had developed an industry reputation as a turnaround strategist, she was surprised to find that IT at Toyota was "1970s-like." Business units were buying their own technology because IT couldn't meet business needs. Moreover, IT was determined to maintain an IBM-mainframe environment. Basic IT disciplines such as business relationship management, financial and project management, and even security for the building that housed the mainframe were largely absent.

"No one understood the cost of delivering or even supporting IT," she says.ii IT personnel were more like order takers rather than strategic partners. Business executives short-circuited IT project approval and funding process by making deals with IT executives and little thought to architecture and data standards, system integration, or business benefits.

In the first three years, Cooper ramped up six large core projects in an effort to bring the enterprise up to date in such areas as dealer systems, warranty, vehicle distribution, and an ERP system for the back office. The first few years of focusing on replacing outdated applications and adding entirely new functionality for the business, by default, created a project-centric operating model for IT and it was time to address a more balanced structure.

A new IT strategy evolved that rebalanced the business model to be both highly efficient and cost effective at operating IT and fostered a trusted partner relationship between IT and business built upon a culture of accountability and deep strategic understanding. This laid the foundation for business leaders to work closely with IT to experiment with digital technologies embedded deeper into the vehicles and to examine how customers would interface with such technologies.

The key mechanism to building trust and shared accountability was the appointment of an experienced and senior-level IT executive (Divisional Information Officer-DIO) into each business division along with staff to manage the day to day needs of the business. DIOs operated in a matrix governance structure in which they reported to Cooper, yet engaged with senior business executives as trusted partners in planning.

A push toward Enterprise Architecture resulted in a disciplined set of standards across the divisions in key areas. As long as business divisions adhered to the standard frameworks for data, infra-structure (hardware, operating systems, and network integration), and security, they were free, and even encouraged, to innovate on behalf of their business division's unique requirements. The DIO role transformed Toyota IT's to that of a "consultant."

To build greater transparency into the corporate IT process and to better understand the cost drivers, Barbra Cooper promoted a methodology and an organizational structure to tame the business leaders' historical pattern of "free range" IT demand, often by politicizing it. Cooper chaired an Executive Steering Committee (ESC) to review and approve all major IT projects requested by the business. The ESC members were Toyota executives: Chief Operating Officer, Chief Financial Officer, and Chief Coordinating Officer (highest ranking Japanese representative in the North American company).

The ESC controlled and released project funds for each project as each phase of the project's goals were achieved. This "cash flow" strategy allowed everyone to see where money was being spent, but the methodology didn't allow one large project to hold tens of millions of dollars hostage for several years while a project evolved. If a particular project was slowed down or even stuck due to unforeseen challenges, the administrators could "sweep" the unused funds for that project phase back into the pool and other projects could compete for those dollars. This served as an incentive for project managers and business stakeholders to have strong project governance and oversight. It also eliminated spending peaks and valleys during the fiscal year and established a "rolling three year" budget across fiscal year boundaries since projects needed to be flexible and avoid a formal "real-location" due to a budgetary year-end.

In 2010, Toyota Motor Sales Company appointed Zach Hicks as CIO, who reported to Barbra Cooper, now CIO of Toyota Motors North America (TMNA). Together, Cooper and Hicks expanded digitization and created an organizational structure as well as adoption of cloud technologiesiii and established mechanisms to gather, secure, and leverage customer-centric data. Cooper retired in 2012 and Hicks was promoted to CIO of TMNA. Building upon the governance model of two decades ago, Toyota Connected North America was established in 2016, with Hicks appointed as the CEO, to focus exclusively on developing fast cycle-time connected vehicles and to develop selfdriving cars with partners such as Pizza Hut and Avis Budget Group.iv

As TMNA's Digital Transformation & Mobility, an umbrella organization for futuristic technologies that includes Toyota Connected, embarks upon developing new forms of mobility services and autonomous driving technologies, the IT governance that Cooper began in 1996 served as the foundation for IT-Business partnership that has made this journey possible.

Discussion Questions

1. Describe the advantages and disadvantages of TMS's move to a "hybrid" decentralized IS structure?

2. How did the new structure change decision rights? How did it change accountability for IT project success?

3. Why, in your opinion, would business executives shy away from the new approval process?

4. In your opinion, will Cooper's demand that each project be backed by an executive, solve the problem? Explain.

5. Which leadership competency is the most valuable to have in order to take on this level of transformational change?

Earl Stokes Verified Expert

8464 Answers

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