Toyota closes e-business group

Toyota Motor Sales USA is shutting down its e-business unit this month and folding it into the overall business.

Toyota Motor Sales USA is shutting down its e-business unit this month and folding it into the overall business.

Integrating the e-business unit into the corporate structure is the end of a natural progression that began in November 1999 when the "Office of the Web" was created, Toyota spokeswoman Diana DeJoseph said.

The Office of the Web was established to boost the company's Internet strategy in all business units, including supply chain management and retail distribution, she said. "We've accomplished what we needed to accomplish and this is the natural next step. We're taking what we've learned and we're putting it into practice throughout the various business units," DeJoseph added.

The 24 people who worked in the Office of the Web will be moved into the various business units they were supporting.

Toyota's decision to dispense with a separate e-business unit follows the approach of General Motors, which began merging its e-commerce group, e-GM, into the overall enterprise last November.

At the time, GM said it wasn't retreating from e-business but simply following a plan that entailed melding the division into the rest of the company. The e-GM unit had been made a separate entity in August 1999.

Kevin Prouty, an analyst at AMR Research, said most car makers started e-business units as incubators to help the companies figure out how to conduct business differently and more efficiently.

The problem, said Prouty, was that the culture inside the corporations adapted to the e-business initiatives quickly, leading to a duplication of effort during the implementation of e-business projects because the e-business group was disconnected from the overall operations of the business.

Ultimately, the companies decided that the people on the business side of the corporations were better qualified to work on the e-business projects, Prouty said. The way to eliminate any duplication of effort was to have the overall enterprise drive the e-business strategy, he said.

DaimlerChrysler took this approach to e-business from the beginning, Prouty said.

He said the strategy of DaimlerChrysler's e-commerce group was to figure out ways IT could help the business, not to look at how IT could make money on its own - a lesson other car manufacturers ultimately learned.

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