The Big Fix at Toyota Motor Sales

The TMS’s new decentralized IS structure

The TMS’s new decentralized IS structure provided a strategy that promoted transparency in major organizational or business units. It enhanced business alignment with IS and offered locaattentionio The TMS’ new decentralized IS structure while promoting the vision of the enterprise. Moreover, the decentralized IS structure strengthened the business and IS bond and changed accountability across all business segments. The model created a single cash pool to support projects (Wailgum, 2005).

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The decentralized IS system, however, met resistance from several business executives because they did not like the new approval process. Cooper had to dictate that the ESC would not support any project not supported by senior executives in order to overcome this challenge.

New IS structure

Cooper was trying to bring IT functions more closely with other daily business operations by using the new IS structure.

Cooper’s new plan could have been highly successful because the new IS model would effectively support The daily business operations. The CIO worked with a team that generated 18 initiatives to make the new IS structure a reality. Consequently, there was improved alignment with the daily business operations.

The role of the Executive Steering Committee

The role of the Executive Steering Committee at TMS involved situational approval of all major IT projects. It aimed to strengthen the business and IS bond. In addition, it also strived to enhance accountability for IT projects. The ESC shifted responsibility for IS projects vetting and monitoring to the business and demonstrated its inner working to TMS’ business units. The ESC maintained a single cash pool for all IT projects.

The ESC was a good idea because it enhanced IT project accountability, financial management, and ensured that all IT projects received support from senior business executives.

TMS

TMS used a project-by-project basis to allocate funds from a single cash pool to support the goals of each phase of the project. This approach allowed TMS to monitor spending, and unexpended funds could be distributed to other projects. In addition, the administrators ensured effective reallocation of funds to such projects. Regular pacing of projects yearly eradicated spending swings.

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A project-by-project basis allowed TMS to track costs on each project and noted their overall contributions to the business. It allowed the effective utilization of unexpended funds. The major drawback was that other projects had to wait for unexpended funds to be initiated.

TMS used rivalry to acquire market shares of its competitors. The rivalry among motor vehicle manufacturers in the US has been fierce, and therefore only firms that can create competitive advantage have been able to grow.

TMS has leveraged its IS structure and IT projects to support daily business operations and create a competitive advantage to grow market shares in the US (Porter, 1998).

Information Systems Triangle

The three components in the Information Systems Triangle are business strategy, organizational strategy, and information strategy (Pearlson & Saunders, 2012). The TMS business strategy showed how the company would acquire market shares by relying on customer demands, market forces, and organizational capabilities to create a competitive advantage.

Organizational strategies showed how TMS restructured its processes to implement business-level strategies by using the IT systems. TMS changed daily business processes, accountability, reporting, project initiation, evaluation, and decision-making processes with the ultimate aim of increasing market shares.

Information system supported the IT-oriented business strategy model at TMS. TMS was able to align IT projects with daily business processes to create a competitive advantage by leveraging on data, network management, architecture standards, and systems integration.

References

Pearlson, K., & Saunders, C. (2013). Managing and Using Information Systems: A Strategic Approach (5th ed.). New York: John Wiley & Sons, Inc.

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Porter, M. E. (1998). Competitive Advantage: Creating and Sustaining Superior Performance: New Introduction. New York: Simon and Schuster.

Wailgum, T. (2005). Toyota’s Big Fix: An IS Department Turnaround. CIO. Web.

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