Ambitions and targets vary among individuals. Some aspire to be pilots, while others aim for a doctorate. Similarly, many people have the ambition of owning and driving a Toyota Lexus. However, these ambitions are not easily attainable due to the high cost associated with affording a Lexus.
Upon studying this case, it was discovered that a data administration issue had occurred. Specifically, cheques totaling $400 were mistakenly sent to customers who were not eligible or did not own a Toyota Lexus. These cheques were intended to compensate for tyre replacements but were only meant for Toyota Lexus customers. What makes this problem particularly serious is that some customers who had not owned a Toyota Lexus for some time also received these cheques.
And the worst part was that they became aware of this problem when one of the cheques was received by the Auditor of Toyota Motor Sales USA who no longer owned the vehicle. The following is a case study that emphasizes the value of money for customer services and the importance of accurate data administration by keeping it organized in an efficient way. Research and Analysis: Toyota Lexus believed in high customer service and satisfaction and pursued this by contacting vehicle owners, picking up their vehicles for servicing, and providing a courtesy car.
After servicing customers’ vehicles, the company would wash them, fill up the fuel, and return them as a goodwill gesture. Toyota Motor Sale’s Corporate Information System played a crucial role in enabling such high-level customer service. The system was utilized by Toyota’s call center in Iowa to offer warranty assistance, roadside support, prepaid maintenance, and more to customers. All of these efforts aimed to ensure exceptional customer service, drive sales and profits, and attain organizational goals.
The problem occurred in 1998 when Toyota Motor Sales USA (TMS) faced a data administration problem. They were issuing checks worth over $400 to customers who either did not own or had previously owned a Lexus. This was an undesirable situation for the company, as it resulted in unnecessary expenditure. Luckily, one of these checks reached the Toyota auditor, who had once owned a Lexus. This incident led them to discover a failure within the Corporate Customer Information System.
This technical problem could have been resolved earlier if the overloaded system had not exceeded its storage capacity. When data exceeds the limit, it inevitably crashes. The problem was further worsened by the software’s sensitivity, as it incorrectly placed the right data in the wrong location. Unfortunately, time constraints also added to their challenges, as they needed to minimize the resolution time for a specific query.
Toyota Motor Sales USA operated under the principle of logical organization in its Customer Information System. According to Raymond McLeod in his book Management Information Systems (1998), logical organization involves integrating data from multiple locations to provide a unified view for users. The system stored data in 14/15 different locations within the company. In order to address customer queries, call center staff members had to open multiple applications, typically 4 or 5, to access customer details from the database.
The process of accessing customer data before solving their queries was time-consuming and inconvenient for customers. This gave a negative impression of Toyota Lexus’ gold plated service. Additionally, increasing the number of staff was necessary to assist customers due to the time it took to access their data. The following decisions were made:
Upon recognizing the gravity of the situation, the President of Toyota Motors made it obligatory to adopt a centralized database management system. Consequently, all customer records would be consolidated into a solitary database. While it may appear uncomplicated to gather records from various locations and merge them into one database, Toyota faced challenges in doing so. This undertaking encompassed a sequence of data management procedures. Primarily, they had to acquire all the necessary data since not all of it was accurate, leading to erroneous check postings.
Ensuring the new system’s output was accurate necessitated verifying the data, as it filters out inaccurate information. This stage emphasizes the ‘Garbage in and Garbage out’ concept, where incorrect input results in incorrect output. Hence, genuine and verified data had to be stored on a storage device. This data could serve as the initial input for the new system, with the possibility of adding new data if needed. Furthermore, measures were implemented to safeguard the data from potential harm and arrange it in a user-friendly format for convenient access.
Toyota faced the challenge of growing call volumes to their call centers. They were reluctant to hire more staff and sought a business intelligence system. However, implementation costs and compatibility issues with their company deterred them. Then, at a conference, John Gonzales, Toyota Motor Sales USA’s data quality manager, discovered Informatica’s data extracting, transforming, and loading software. The software aimed to gather data from various sources and consolidate it into a central data warehouse.
Informatica’s representatives were invited by Toyota Motor Sales USA to demonstrate the software’s compatibility with the company’s requirements. They showcased an abstract model of the software, highlighting its ability to categorize data and manage data relationships. This detailed and impactful demonstration convinced Toyota of the software’s potential, leading to its successful implementation and the resolution of their dilemma. The user-friendly interface played a crucial role in Toyota’s decision to purchase the software.
Ensuring the user-friendliness of software is crucial for any organization before making a purchase. If employees struggle to use the software, it becomes not worthwhile. Additionally, organizations must address the challenges employees face when adapting to changes that affect their established methods. Toyota appropriately considered these difficulties and introduced software that allows easy access to complex data for its employees.
By April 1999, Toyota had successfully installed and prepared their new Informatica’s Power Mart. However, this marked the start of a new challenge as it was estimated that an additional six months would be required to transfer the data and ensure accurate output. Toyota encountered numerous inconsistencies in the databases pertaining to vehicles, motors, and addresses. These discrepancies had to be resolved before implementing the software, resulting in the examination of millions of records before entering them into the new system.
Toyota employed external resources to rectify data errors. They consulted the Department of Motor Vehicles and reached out to customers via phone. This effort enabled Toyota to establish a data warehouse that can store up to 250 gigabytes of data. The entire project incurred a cost of around $250 million, but Toyota views it as a prudent and valuable investment.
Toyota implemented new software, resulting in them avoiding extensive call centre operations and increasing sales from 750,000 to 1.7 million vehicles per year. This upgrade allowed Toyota to reduce costs and maintain customer loyalty. Accurate database administration is crucial for an organization dealing with large amounts of data, so Toyota should have regularly monitored their Corporate Customer Information Systems and stored data at a single location. The inefficiency of their system was evident as it took too much time to access records and there were no checks on incorrect data, causing errors in check postings. Any changes made should have been thoroughly analyzed to meet organizational needs. Despite the substantial $250 million investment, the introduction of Informatica’s Power Mart centralized database management system effectively reduced data processing time after a successful proof test, ensuring ease of use. Using Informatica’s Power Mart resulted in quicker response times to customer queries, leading to increased satisfaction and higher sales volume. Employees also benefited from the convenience of accessing data without opening multiple windows.The company was able to save money by avoiding the need to expand their call center in order to handle customer inquiries. Toyota’s investment of $250 million was successful. Recommendations for improving data management and system usage include regularly filtering out garbage data, allowing only useful data into the information system, conducting random checks to prevent errors, implementing a centralized database for faster processing, ensuring regular backups of important data stored in a separate location in case of crashes, providing proper staff training on complex data handling and system usage, restricting access to prevent misuse, and conducting thorough analysis before purchasing new information systems.
References:
– Gallagher, Sean – Baseline, June 2002
– McLeod, Raymond – Management Information Systems, 1998
Bibliography: http://www.personneltoday.com/Articles/2007/04/10/40089/the-elegant-solution-toyotas-formula-for-mastering-innovation-book.html
– Gallagher, Sean – Baseline, June 2002
– McLeod, Raymond – Management Information Systems, 1998
