Toyota closes e-business group

Following in the footsteps of General Motors Corp., Toyota Motor Sales USA is shutting down its e-business unit this month and folding it into the overall business, according to a spokeswoman for the U.S. division of the Japanese automaker.

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

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," DeJoseph said. "We're taking what we've learned and we're putting into practice throughout the various business units."

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

General Motors Corp. 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 was made a separate entity in August 1999 to give it autonomy and position it for fast success.

Kevin Prouty, an analyst at AMR Research Inc. in Boston, said most automakers 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 corporations.

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 AG took that 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 auto manufacturers ultimately learned.

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