Toyota’s 10-Year Journey for a Faster and More Efficient App Dev Strategy

Challenge

Digital transformation is changing what people expect from a car manufacturer

At a significant turning point described as a once-in-a-century event, Toyota is moving at full-speed in its transformation from being a car manufacturer to becoming a mobility company.

"I feel that the value people seek in this product we call 'cars' has undergone significant changes," says Toshiyuki Hibi, Chief Officer of the Information Systems Group at Toyota.
"We've transitioned from an era where there was inherent value in owning a car, to an era where cars are perceived as a means to enjoy the value created through the experience of mobility. What people want in a car is also changing."

One of the factors accelerating this change in values is the rapid development of digital technology. This wave of digital transformation (or "DX" for short), which seeks to leverage the latest technologies to change the world for the better, poses an important challenge of how to effectively respond. Toyota recognizes this initiative as one of its crucial business challenges.

Solution

Implementing a productive and flexible IT environment free from legacy development

The Toyota Group, with Toyota Motor Corporation at its core, adopted OutSystems to tackle projects that are essential for pursuing digital transformation. Toyota launched its proof-of-concept activities in 2014.

Atsushi Inagaki, General Manager of DX Promotion Division at Toyota Motor Corporation and one of the key figures in the implementation of OutSystems, expressed the following at the time. "I felt that my mission was to establish a framework that allows us to swiftly modernize our legacy systems and enact digital reforms in the surrounding areas."

Inagaki's initial mission was to modernize large-scale legacy systems, including long-standing applications used at Toyota, such as parts catalogs.

"We were seeing warning signs of the decline of the labor force in Japan. In particular, the shortage of IT talent was said to become an increasingly serious issue on a global scale,” Inagaki explained. “In addition to modernizing our legacy systems, we wanted to create an environment that could adapt to changes in the future labor environment using IT solutions. We were looking for the tools that could achieve this."

Toyota evaluated various products to establish such an environment, including what were then referred to as "ultra-high-speed development tools." OutSystems was one of the leading candidates.

Inagaki described: "Toyota's legacy systems use a variety of programming languages, including PL/I and COBOL. The engineers who are adept at these languages will soon reach retirement age. We wanted to create a world where these engineers could easily adapt to new environments at a low learning cost, and where even those with limited knowledge and experience could easily comprehend the framework and create systems. OutSystems, which allows us to build a variety of applications based on a visual environment, was exactly what we needed."

Inagaki also valued OutSystems for its ability to allow for flexible and high-quality post-release system improvements by incorporating user feedback. Inagaki explained that what users want out of a system like this is a product that is "fast, reasonably priced, and efficient." In this context, "fast" means shorter development periods, "reasonably priced" means reduced development costs, and "efficient" means high-quality deliverables.

Prior to the full-scale implementation of OutSystems, Inagaki personally visited the company’s headquarters in Portugal. The main reason for this visit was to learn the corporate culture and the thoughts of the people involved in the development. After meeting with OutSystems executives and engineers, Inagaki was thoroughly convinced that this was the right choice.

Results

Setting up a low-code Center of Excellence at Toyota Group

Toyota's first full-fledged use case with OutSystems was a relatively small application used in the User Department, called the "Sheet Metal System." Development work with OutSystems achieved approximately a 30% reduction in work hours compared to conventional development methods.

Building on the successful results of this project, Toyota began to accelerate the full-scale deployment of OutSystems. The scope of application was gradually expanded, starting with the migration of a system for managing the production of procured parts.

"Initially, there was some resistance from engineers who complained that they can't work with a tool like this,” Inagaki explained. “Incidentally, around the same time, Toyota was starting to work on activities aimed at improving development productivity and reducing lead times, and OutSystems was introduced as a tool for these efforts. This marked the beginning, as more and more teams started to show interest in OutSystems for their projects. This trend extended beyond the engineering IT domain to include corporate IT.”

Regarding the deployment of OutSystems, Inagaki said, "If your goal is to improve development productivity, then give OutSystems a try. If there's anything you don't understand, the in-house help desk will answer your questions anytime." He also explained that this has not changed significantly since Toyota introduced OutSystems. However, as more projects continued to demonstrate positive results, the amount of interest in OutSystems also grew. This led to the need for a more robust help desk and better training for development personnel.

"For a while after introducing the tool, our main problem was that there were very few engineers who could actually use OutSystems. I remember struggling with educating engineers and figuring out how to create a standard system to increase productivity using OutSystems," Inagaki recalled.

Toyota Motor Corporation, in collaboration with Toyota Systems and partner companies, has made efforts to simultaneously strengthen the help desk framework, accumulate and disseminate case studies and practical know-how, and organize common components used in development. By 2020, the scope of implementation of OutSystems had expanded to cover the entire Toyota Group, and the system that was established is now functioning as a Center of Excellence (CoE).

"As the scope of use expands and scales throughout the entire group, the demand for the use of OutSystems grows not only for direct users, but also for development partners,” said Inagaki. “To meet this demand, we need to build a framework that allows our partners who aren't as familiar with OutSystems to have an accurate understanding of the tool and to create applications that adhere to the group's standards. To achieve this, we've organized a consortium to facilitate close communication among stakeholders, and made efforts to strengthen the capacity of the help desk and the CoE in collaboration with Toyota Systems and partner companies."

The information exchanges and technology sharing for improving development productivity with OutSystems are not limited to employees of Toyota Motor Corporation, Toyota Systems, and others in the Toyota Group. It also includes partner companies. There is also an ongoing initiative to create educational programs that involve accepting temporary transfers from partner companies to train their employees.

Furthermore, within the Toyota Group, in addition to the traditional waterfall model of development, there has been a gradual shift toward the more compatible Agile approach since the company introduced OutSystems.

To achieve results in an Agile development, it is essential to not only use suitable tools, but also to undergo a shift in mindset among team members regarding team composition and system development. Yuki Matsunaga, Group Manager of the Business Innovation Support department in the DX BPR promotion division of Toyota Motor Corporation, is one of the leaders working on enacting these changes. Matsunaga has been trained in Scrum and is currently serving as a Scrum Master for an Agile development project in the Corporate Department.

As of October 2023, 23 companies in the Toyota Group have begun using OutSystems, both in Japan and overseas offices. Particularly at Toyota Motor Corporation, it is used in over 70 projects across various business domains. Utilization extends beyond legacy modernization, including front-end development to connect legacy systems with users.

In the span of nearly 10 years since OutSystems was first introduced, a wealth of practical know-how has been accumulated through many projects. At the same time, organizational support structures for systematic utilization through proof-of-concept activities and consortiums have also begun to form. Looking back at these efforts, Inagaki reflects, "I feel that OutSystems has finally become everyone's go-to tool within the organization."

This initiative is planned to be further strengthened in the future. Establishing evaluation indicators for projects adopting OutSystems, as well as strengthening the operational and maintenance structure utilizing the features of OutSystems as a platform, are among the immediate areas of focus.

"There's also been a recent movement to promote a shift toward the cloud wherever possible. We think there's a feasible direction we can take in utilizing the cloud for infrastructure, while leveraging OutSystems as the development and execution environment to avoid lock-in by cloud vendors", explained Inagaki.

OutSystems is becoming one of the essential tools in driving digital transformation within the Toyota Group. Inagaki, who has been leading the efforts since the initial introduction, concluded: