Saturday, January 9, 2010

toyota's business intelligence

Just around the time of the bubble (i.e. 1999-2000), Toyota discovered that their business intelligence systems were, well, unintelligent. As is often said, garbage in, garbage out. While the company had set up a data warehouse intended to capture real-time, accurate data for decision making, they had failed to set up the controls required to eliminate human error, and as a result, they missed out on the true value of BI. While they had the right ideas in place, they had the wrong technology for the job.

When it comes to choosing a business intelligence platform, it's important to assess the robustness of the implementation. In many cases, being a "first-mover" is a positive characteristic, but when it comes to implementing a BI solution, it is often best to shop around and see what others are using. Talk to contacts, check the web, and take a look around. A costly BI system that doesn't work isn't worth the dollars you'll spend. While this might sound like an elementary lesson, Toyota learned the hard way.

Years after their failed BI implementation, they determined the wrong technology was in place. After a second costly reimplementation, their BI systems finally proved their value. Toyota uncovered an $800,000 billing error from a shipping company in the initial days after the implementation was completed. Over the next 4 years, they increased the volume of cars they handled by 40% while head count increased by a marginal 3%. Productivity gains such as these run rampant across firms who adopt business intelligence systems that work. In fact, the systems more than pay for themselves, and quite handsomely. Many case studies assess the ROI of such investments at the double digit percentage level, which is above the majority of firms' policy requirements.

So, in an attempt to make this blog more interesting, we'd like to ask for your feedback. What kind of information sources do you have at your disposal within your organization? Does each department have individual data sources? Or is everyone querying a centralized warehouse? Are key decision makers waiting unnecessarily for information? We'd love to hear your stories, so don't be shy.


  1. A good Performance Management System incorporated with that, will ensure a Successful R.O.I.

  2. Thanks for the feedback Ted! What is your background? Which BI Solutions have you worked with?

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