FINANCIAL MANAGEMENT UPDATE

Driving Value Creation at Toyota Motor Sales

By Anne Ozzimo

"My top mission is helping our executives and business partners see where the opportunities for profitable growth are, and I rely on PeopleSoft to help me in that effort."—Tracey Doi, senior vice president and CFO, Toyota Motor Sales U.S.A.

Among those companies considered leaders in value creation, Toyota Motor Sales U.S.A. (TMS) stands out for its unique approach. The U.S. subsidiary of Japan's Toyota Motor Corporation is revolutionizing its finance operations by combining the latest enterprise software and business process re-engineering techniques with decades-old Japanese business practices based on respect for the individual and the Kaizen system of continuous improvement. It's a powerful combination that is helping the TMS finance team support the company's double-digit growth in the United States.

Helping manage Toyota's torrid growth is a challenge most CFOs would envy, and no one knows it better than Tracey Doi, group vice president and chief financial officer for TMS. "Toyota's growth has been phenomenal in the United States," says Doi, "but the challenge we face now is how to make that growth sustainable and profitable, while keeping our infrastructure costs as low as possible."

Soon after she joined the company, Doi realized that the finance organization at TMS needed to get closer to its divisional business units, rather than just delivering financial information to the parent company in Japan. Having been trained in the Kaizen system of focusing on people, process, and technology to drive continuous improvement, Doi launched a pilot transformation project within the accounting department she called "Driving for Higher Performance." The cornerstone of that project was an upgrade to a full suite of Oracle's PeopleSoft Enterprise financial management applications.

"My vision for the finance organization was to simplify our business processes, align ourselves with our internal customers, and help provide them with the right information to support our growth objectives," recalls Doi. "We chose PeopleSoft to help us do that." Doi opted for a plain vanilla implementation to take full advantage of the finance best practices embedded in PeopleSoft Financial Management solutions. She recommends that other CFOs go vanilla as well. "I strongly encourage leveraging the best practices that PeopleSoft has learned from all the other major companies—that's a huge benefit."

Embedding finance managers in the line is another best practice cited by the CFO Executive Board, and the No. 1 priority of CFOs involved in finance transformation efforts in 2005. Value-driven CFOs use their embedded teams to align finance with corporate strategy, providing decision support to help business units improve their enterprise performance and profitability. It's a practice Doi embraced early on to better support the division heads at TMS and demonstrate to management the value that finance can bring to Toyota as a whole.

Although she reports into the CFO's office, finance manager Kelly Foltz has been embedded with the Lexus division for almost five years, providing support and analyzing valuable financial information for business planning, budgeting, forecasting, and strategic projects. She relies on Kaizen techniques and PeopleSoft to help move the finance transformation effort at TMS forward.

To support process improvements, Foltz and the other embedded members of Doi's finance team use PeopleSoft to obtain information that is timely, accurate, and relevant. "My team monitors the financial performance of the Lexus division and shares that information with Lexus management," notes Foltz. "We use PeopleSoft to efficiently drill into the details of Lexus income and expense trends, and the actual versus budget performance at various account and project levels."

Toyota's finance team also uses the transactional data within the PeopleSoft system to create executive dashboards used by division heads and management to identify future investment opportunities. "Using the transactional data we get from PeopleSoft, we provide our executives with timely market information on the risks and opportunities, and where we should be strategically investing for the future," concludes Doi. "My top mission is helping our executives and business partners see where the opportunities for profitable growth are, and I rely on PeopleSoft to help me in that effort."

Anne Ozzimo is a product marketing director for Oracle's financial applications and writes frequently on financial management issues.

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