Customer Solution Case Study
/ / Web Portal Saves Toyota and Dealers Millions Per Year and Accelerates Delivery of New Business Value
Overview
Country: United States
Industry: Automotive
Customer Profile
Toyota Motor Sales USA (TMS) is the U.S. sales organization for Toyota Motor Corporation, the second largest automaker in the world based on global sales.
Business Situation
TMS needed to replace its aging minicomputer-based solution for communicating with dealers with one that is easy to manage and would accelerate the delivery of new business value.
Solution
Dealer Daily, based on Microsoft® Windows Server SystemTM, is a comprehensive, easy-to-manage Web portal that connects Toyota and Lexus dealerships with one another, TMS, and third-party suppliers.
Benefits
n Saves dealerships hundreds of millions of dollars over the next five years
n Saves TMS tens of millions of dollars over the next five years
n Simple and cost-effective to manage
n Can be centrally administered and upgraded / “Our Windows Server System–based solution is a key enabler for growth in both revenues and profits.”
Ken Goltara, Vice President of Business Systems Development, Toyota Motor Sales USA
The minicomputer-based solution previously used by Toyota Motor Sales (TMS) was expensive to manage and could not support the level of business process integration that TMS wanted to have with its 1,200 Toyota and Lexus dealers. Dealer Daily, the company’s new solution, is a comprehensive, easy-to-manage Web portal built on Microsoft® Windows Server SystemTM, server infrastructure software that incorporates software innovations to help companies do more with less. The solution puts a wealth of information and capabilities at the fingertips of Toyota and Lexus dealers, enabling them to connect with TMS, one another, and third-party suppliers in new and profitable ways. By taking advantage of the management products in Windows Server System, such as Microsoft Operations Manager, TMS has cut the cost of daily management for Dealer Daily by 25 percent and shifted those resources toward the delivery of new features that enhance business growth and profitability. The enhanced productivity and new capabilities provided by Dealer Daily are expected to save the dealerships hundreds of millions of dollars and TMS tens of millions of dollars over the next five years.
Situation
Toyota Motor Sales USA (TMS) is the U.S. sales unit of Toyota Motor Corporation, the second largest manufacturer of automobiles in the world. TMS has continually gained market share over the past several years, with sales increasing from 1.4 million to 1.8 million vehicles between 1997 and 2003. Continuing to fuel that kind of business growth depends heavily on how well the company interacts with and meets the needs of its resellers—in this case, the nationwide network of 1,200 Toyota and Lexus dealers.
Prior to 2000, the primary channel through which TMS interacted with its dealers was the Toyota Dealer Network (TDN), a text-based application that ran on a minicomputer installed at each dealership and invoked applications running on a centralized mainframe located at TMS headquarters in Torrance, California. For TMS and its dealers, the aging legacy system presented several obstacles to maximizing business growth:
n Limited productivity—TDN did not integrate with any of the dealer management systems that dealerships use to support their daily business operations: selling vehicles, arranging financing, processing warranty claims, managing parts inventories, and so on. Because of this, dealership personnel had to continually rekey data into multiple applications—a task that left room for errors and took valuable time away from serving customers.
n Poor supportability and manageability—To upgrade TDN, TMS had to create tapes and CDs, mail them to all 1,200 dealers, and then wait for dealers to have the time to load the upgrades—a process that took weeks and cost more than a million dollars to upgrade all 1,200 dealerships. Owing to their labor-intensive nature, upgrades were scheduled only twice a year instead of being driven by business needs.
“We needed a system with greater manageability and flexibility—one that could help to fuel continued business growth,” says Ken Goltara, Vice President of Business Systems Development for Toyota Motor Sales. “We envisioned retiring all minicomputers from dealerships and replacing them with a rich, dynamic, and customizable Web portal that would deliver more functionality, be easier to manage, and improve dealer productivity. We wanted to eliminate the costly and error-prone redundancy of having dealers key in data first to their dealer management systems and then again into their dealer communication systems. And we wanted the solution to work in the most cost-effective way, allowing us to leverage the investment in our mainframe-based systems.”
Solution
Dealer Daily, the company’s new solution, is a comprehensive, easy-to-manage Web portal that puts a wealth of information and new capabilities at the fingertips of Toyota and Lexus dealers. Built on Microsoft® Windows Server SystemTM integrated server software and developed with the assistance of Microsoft Consulting Services, Dealer Daily connects each of the 1,200 Toyota and Lexus dealers to Toyota Motor Sales and other Toyota subsidiaries, other dealers, and external vendors in new and profitable ways:
n Toyota Motor Sales—System-to-system integration between Dealer Daily and dealer management systems enables dealership personnel to perform daily business activities without keying data into multiple systems. Instead, personnel just enter information into the local dealer management system, which forwards that data to Dealer Daily for processing against the TMS mainframe. Results of those transactions are returned by Dealer Daily to the dealer management system in a matter of seconds. Dealer Daily also enables dealers to work more closely with other corporate subsidiaries such as Toyota Financial Services. When a customer wants to finance a vehicle, dealerships can submit a loan application based on already captured customer data through Dealer Daily to Toyota’s financing system (which utilizes an Oracle database running on UNIX), enabling Toyota to respond with an offer in as little as 15 seconds and increasing the chances that Toyota will win the customer’s financing business as well.
n Other dealers—Dealer Daily enables dealerships to communicate and interact with one another in ways that streamline business processes and reduce expenses. For example, Dealer Daily’s pipeline management features enable dealerships to do a “virtual swap” with another dealer before the desired car is shipped from the port to a dealership. In the past, such a swap often required the physical transport of a vehicle after it was delivered to a dealership, at a significant additional expense. For Lexus dealers, Dealer Daily also facilitates the sharing of service information, so that customers can take their vehicles to any dealership and know that the dealership will have a complete history of all work that other Lexus dealerships have performed in the past.
n External vendors—Dealer Daily enables dealerships to conduct business with external vendors such as audio component suppliers and electronic key manufacturers directly through the portal. For example, before Dealer Daily, Lexus dealers used the telephone or fax machine to send orders to the independent vendor that provides electronic keys for Lexus vehicles—methods of communication that often resulted in incomplete or incorrect information. Today, dealers enter orders for new keys directly into Dealer Daily, which checks that the data is accurate and complete before electronically presenting the order to the vendor for fulfillment. Vendors receive orders within seconds of submission, cutting hours and sometimes days off the process.
Dealership personnel see three primary areas on the Dealer Daily portal: an information area, with documents and content that can be customized by each TMS regional office (see Figure 1); a message board for TMS to notify dealers of incentive programs, service bulletins, and other topics; and more than 120 business applications. Toyota hosts most of those applications on its own—functionality that ranges from sales reporting to downloading software for reprogramming a vehicle’s on-board computers. Other applications, such as customer satisfaction surveys, are hosted by third-party providers. Regardless of where applications are hosted, users enjoy seamless access and can move among them without regard to the underlying technical infrastructure.
“Dealer Daily provides our dealers with a single point of entry for all the business that they do with Toyota,” says Goltara. “That might seem like the way it should always have been, but it wasn’t. Now it is, and Toyota, our dealers, and our customers are all reaping the benefits. Our Windows Server System–based solution is a key enabler for growth in both revenues and profits.”
Content on Dealer Daily is easily managed by TMS employees located at the company’s headquarters and in regional offices using a Web-based editing interface that is hosted directly on the portal. Built-in workflow and approval tools ensure that newly modified content is approved at the proper level before it is propagated to the live portal. Documents and other files also can be uploaded to Dealer Daily and hosted on the portal, enabling TMS to deliver new training and sales collateral in a matter of minutes—without the delay and expense of shipping boxes of printed materials to each of 1,200 dealerships.
Today, Dealer Daily is used by more than 35,000 dealership personnel, who generate roughly 6 million page views per day. However, the same physical solution also serves two other user groups. Associates at TMS headquarters use a separate Web interface hosted on Dealer Daily to support internal business processes, such as approving parts claims that are submitted by dealers. Third-party vendors interact with dealerships and process the orders that are submitted through a third Web interface hosted on the portal.
Kaizen: A Process of Continual Improvement
Like all aspects of Toyota’s business, the evolution of Dealer Daily from its inception to its current form is an example of kaizen—a Japanese word for a work process and ethic that involves the continuous search for improvement and the constant implementation of measures to realize incremental improvements. At Toyota, kaizen often involves teams of employees who work together to revise standards and business processes, driving continual improvements in efficiency, quality, and working conditions.
Dealer Daily was initially deployed in 2000, at which time it supported only Toyota dealers and ran on the Microsoft Windows NT® Server operating system version 4.0, Internet Information Server version 4.0, SNA Server version 3.0, and Microsoft SQL ServerTM version 6.5. System-to-system integration with dealer management systems was added a short time later, in the summer of 2001. By then, TMS had a solid infrastructure upon which to continue building and had developed 60–70 percent of the system’s present-day functionality. But TMS still saw room for improvement—and an opportunity to apply the principles of kaizen.
Integrated Management Tools
One such opportunity was in the area of supportability and manageability. By the end of 2001, TMS had rolled out Dealer Daily to approximately 250 of its 1,000 Toyota dealers. “Dealer Daily was a solid application initially but began experiencing scalability issues as the rollout progressed and the system’s workload continued to increase,” says Zack Hicks, who at the time was the National Manager for E-Business at Toyota Motor Sales. “To minimize the potential impact of downtime on dealers, we dedicated three operations staff members and four developers—10 percent of our workgroup—to continuously monitoring the system. Additional resources were assigned from 6:00 A.M to 10:00 P.M. at month-end, which is when Dealer Daily experiences its heaviest usage.”
TMS reduced the effort required to support Dealer Daily by deploying Microsoft Operations Manager (MOM) 2000, which exposes all components of the solution to highly refined levels of continuous monitoring and continually checks the health of all server hardware, operating system services, and applications. Upon detecting any abnormal behavior, configurable processing rules built into MOM notify the appropriate personnel by e-mail or pager and determine which, if any, automated responses to execute. Information from the Microsoft Knowledge Base is appended to many MOM alerts, providing TMS IT professionals with the information that they need to rapidly understand what is happening and implement the appropriate corrective actions.
“Microsoft Operations Manager integrated seamlessly with the other Windows Server System components,” says Mylene Mayers, Manager of Dealer Daily Development at the time. “It added an entire new layer of management capabilities to Dealer Daily, enabling us to focus our attention on exploiting the integrated capabilities of Windows Server System instead of baby-sitting our production environment.”
Today, no IT resources are dedicated to monitoring Dealer Daily. Instead, development and operations personnel are free to focus on other tasks that add value to dealers and TMS. MOM monitors Dealer Daily at both the infrastructure and application levels, checking everything from the health of hard disks and the percentage of server processor utilization to the speed at which Dealer Daily transactions are processed. Alerts for infrastructure-related issues flow directly from MOM to members of the operations team, while alerts for application-level issues—such as slow transaction processing by the TMS mainframe or the Oracle-based system—are sent directly to developers or to the appropriate personnel in an external group.
Improved Manageability Frees Resources to Add Value
According to Goltara, Dealer Daily costs 25 percent less to run today than it did when the solution was initially deployed—money that he has been able to redirect toward delivering additional value for TMS and its dealerships. Examples of new features and projects that the labor savings provided by MOM have helped to finance include the addition of functionality to support Lexus dealerships, a reporting tool that enables the Lexus division to improve its loaner vehicle program, tools for certifying used vehicles, hundreds of dealer-requested enhancements, and a usability study to determine how to further enhance Dealer Daily and improve the productivity of its 35,000-plus users. Some of the cost savings were used to migrate Dealer Daily to the Microsoft Windows® 2000 Server operating system with Internet Information Services (IIS) 5.0 and SQL Server 2000—key upgrades that have further improved solution scalability and performance. In fact, TMS is supporting all 1,200 Toyota and Lexus dealers using the very same physical hardware that in the past had exhibited performance and scalability issues with a 250-dealer workload.