The News: Software vendor SAP and its SAP S/4HANA Cloud enterprise resource planning (ERP) suite are becoming official team partners of the Mercedes-AMG PETRONAS Formula One (F1) racing team to better track and manage the team’s expenses and complex parts supply chain under a recently announced multi-year deal. The partnership, which will begin in 2024, will center on the use of the SAP S/4HANA Cloud private edition platform, as well as the SAP S/4HANA Finance application, AI enablement, and more. Read the full press release about the SAP Mercedes-AMG PETRONAS partnership on the SAP News Center website.

SAP S/4HANA Cloud to Boost Efficiency of Mercedes-AMG PETRONAS F1 Team

Analyst Take: For SAP S/4HANA and the Mercedes-AMG PETRONAS Formula One racing team, I believe this new partnership is a big win for both. For SAP, it ties the brand to a high-visibility, globally known F1 racing team as a standard-bearer for its products and services. And for Mercedes-AMG PETRONAS, it gives the racing team the powerful capabilities and features of modern SAP enterprise applications that will enable the team to gain deeper insights into its data, team racing cars, parts inventories, and much more.

Today’s FIA F1 racing schedule is incredibly complex and generates massive amounts of performance, testing, and operational data that then must be synthesized and organized to provide useful information that can help racing teams get ahead of their competition. And that is exactly what the Mercedes-AMG PETRONAS team will get out of this partnership with SAP S4/HANA and related SAP ERP technologies.

One of the biggest challenges for the racing team is carefully monitoring and tracking its expenses due to F1’s strict rules that restrict team spending through cost caps that cannot be exceeded if teams want to continue being part of the F1 racing season. There are severe penalties if racing teams exceed their cost caps.

Using SAP S/4HANA, the Mercedes-AMG PETRONAS F1 Team will have the right tools to track these expenses and use its financial resources to better forecast costs, predict final budget needs, and optimize its parts stocks and parts supply chain for improved efficiencies. The racing team will also take advantage of SAP’s business AI technology, cloud resources, and other critical capabilities to streamline the team’s infrastructure and operations.

For the Mercedes-AMG PETRONAS F1 team in the intense world of F1, taking hold of these cost-cap challenges and optimizing the team’s complex supply chain are two critical areas that must be addressed to find success on racetracks around the world. With the huge capabilities and features of these offerings from SAP, I believe that this partnership will help accelerate and drive this F1 team to major successes on the track.

The racing team will also integrate other powerful SAP products, including SAP Build software and the SAP Business Technology Platform as part of the deployment of a transparent and intelligent enterprise architecture that will provide a single view of data and systems from various sources across the organization. These major improvements in technology infrastructure will help the racing team to shorten lead times to find and receive critical car components, which will be a huge boon during race weekends, according to SAP.

How Using SAP S/4HANA Will Help Lead the Mercedes-AMG PETRONAS Team to Success

I believe that bringing together SAP’s latest powerful technologies with the serious requirements of the racing team will graphically show the racing world how these kinds of tech tools are no longer an option for the best teams in racing. This partnership will show that these kinds of deals are necessary to bring the highest levels of success to racing teams, drivers, sponsors, and the F1 racing series, by packaging the latest and greatest technologies together to eke out every bit of performance for the winning edge. In my view, this intriguing partnership could also provide a roadmap for other racing teams that will be encouraged to pursue their own similar technology partnerships to take advantage of these tools and strategies.

The Mercedes-AMG PETRONAS F1 Team is the works team of Mercedes-AMG, which competes in the 20 race FIA F1 racing series across five continents. Based in the UK, the team includes more than 1,000 people who design, develop, manufacture, and race the team’s cars. The team includes seven-time World Champion Lewis Hamilton.

All eyes will be on this partnership between SAP and the Mercedes-AMG PETRONAS F1 team, I believe, as they bolster their technological and planning capabilities for another intense F1 racing season around the world. It will be fascinating to watch how SAP’s technologies drive the team’s success in 2024.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.