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Case Study:

Lotus F1 Team drives success with Dynamics AX

In an industry where every thousandth of a second counts, the Lotus F1 Team is committed to taking advantage of any opportunity – no matter how small – to improve its performance on the track. Like every other team competing in the Formula 1 Championship, the Oxfordshire-based outfit is constantly pushing the limits of its people, processes, cars and drivers in an attempt to outperform its rivals.

This effort doesn’t just stop when the car is designed and built; it continues throughout the entire season. In any given race, around one hundred areas for concern or interest arise on the car. There may be a break or failure, or something more subtle. Generally, twenty of these things warrant further analysis. Between two and five of these will result in a required change to the car. Everyone must be able to focus on their part of the puzzle. Minutes wasted can mean milliseconds given up on the track and translate into millions of lost winnings.

Season upon season the competition between the teams intensifies, where the difference between winning and losing comes down to a battle in which only those that can bring developments to the circuit the fastest will prosper.

In the last year, the Lotus F1 Team has entered into a period of transformation as part of its renewed effort to return to Formula 1 Championship title contender status. At the beginning of 2012, Patrick Louis was promoted to chief executive officer, with Thomas Mayer being brought in to fill Louis’ previously held role as chief operating officer. Since then, they have been working alongside team principal Eric Boullier to restructure the team’s processes and structures to give it that winning edge.

As part of their business transformation strategy, Louis and his colleagues were aware that they needed a better IT infrastructure in place to help improve the company’s processes. “At the end of the day, we are a racing team, and everything we do is at a fast pace,” says Thomas Mayer. “We needed an IT system that could keep up with us and our legacy systems just couldn’t do that.”

“It was apparent that the IT solutions we had in place weren’t fit to support our evolving business,” adds Graeme Hackland, Lotus F1 Team’s CIO. “We experienced a lot of problems accessing and analysing the right information. Our core enterprise resource planning (ERP) system was based around Sage and we used SAP BusinessObjects for reporting and budgeting. Beyond that, we had a whole load of individual applications – some of which we built in house and customised – to help run specific processes. We experienced a great deal of issues around integration, which meant we could never truly track what was going on business wide.” Consolidation of these applications and processes was a priority step in realising the team’s objective.

Lotus F1 Team’s problems were not unique. In fact, they’re very indicative of how the F1 industry has changed over the years. As technical director James Allison explains: “For the last 20-30 years, Formula 1 has been pursued at a cottage level. Through the 1990s the teams started to grow and they continued to so do into the millennium,” he says. “We moved to our current site in Enstone in the UK in 1992. Since then, the team, people and systems have all grown at an unprecedented rate. If we had known we’d end up like this, the types of business systems that we’d have chosen to use back then would have been very different. Everything we have works, but it’s more down to the virtues of some key individuals rather than the systems’ innate capabilities. Our overheads are also very high and our departments have got used to operating in a very siloed manner. We needed a system in place that would support rather than hinder our brilliant team.”

Ultimately, Mayer and his team want to ensure that all of the company’s processes and tools are centred on its people and are designed to help them get their jobs done, better. After all, the less time people have to spend moving a plan, a design or a part from point A to point B, or dealing with data entry, the more time they can focus on their area of expertise.

The goal for implementing tools to support the Lotus F1 Team in their objectives all came down to finding an ERP solution that would integrate performance and manufacturing systems in a single environment. The end state; ability to fine tune and drive every aspect of the business, from managing the design, manufacturing and testing of the 20,000-plus parts on each car to analysing real-time data from the race track.

Hackland and his team carried out an extensive evaluation of 13 ERP solutions, which were assessed on eight different criteria – user experience, architecture, business process management, production, support, reporting, integration and total cost of ownership. In addition to this there were over 835 more in-depth requirements. One solution stood out from all the rest.

Microsoft Dynamics AX came out as the clear leader,” says Hackland. “We’d set a target of finding a solution that would provide at least 95 per cent of the functionality we required out of the box and Dynamics AX did that and more.”

According to Christian Pedersen, general manager of Microsoft Dynamics, it was one of the fastest deals he’s been involved in. “Our sales cycles typically start with us approaching a customer, building up a relationship and carrying out a proof of concept. This process can go on for over a year. However, we’d just launched Dynamics AX 2012 and we’d put a lot of effort into promoting the product. Lotus F1 Team heard about it and approached us directly. They flew over to Redmond to meet us and we discussed how we could work together. They weren’t just looking for a vendor to go in and implement some software – they were looking for a business transformation partner. We had appreciation for one another’s purpose. Talk about Formula 1 speed; it was one of the fastest deals we’ve ever done!”

Microsoft’s ‘Dynamic Business’ vision was a key differentiator for Lotus F1 Team, helping it to translate its aspirations into a reality. “Dynamic Businesses are connected, forward-looking organisations that thrive by empowering their people to reach their full potential,” says Pedersen. “Microsoft is redefining how business solutions empower people for greater success, predict potential issues and opportunities, and enable organisations to expand the possibilities for competitive advantage. Ultimately, we want to help our customers drive innovation, achieve speed and agility across their processes and empower their people. Lotus F1 Team believes in our vision and knows that we’re committed to taking its business to the next level.”

The partnership between the two companies was announced in March 2012 and the project kicked off straight away. Microsoft Dynamics was to build one environment for the Lotus F1 Team that it would be able to use to improve manufacturing productivity, collect live, accurate information, make informed decisions, compete for funding and, ultimately, build a faster car.

A phased approach
With Microsoft Dynamics as its official business transformation partner, the Lotus F1 Team is in the unique position of having some of the Microsoft Dynamics AX R&D team onsite for the implementation. This R&D team can gather real-time feedback from the specialised needs of Lotus F1, such as very rapid prototyping and engineering change management, and bring innovative new ideas to future releases of Dynamics. “We didn’t come into this project with good in-house Dynamics AX skills. But if you’re managing a transition such as this, you need that experience,” says Hackland. “It’s brilliant that we have the Dynamics R&D team working side-by-side with us. They get direct feedback from us so that they can better understand our needs. They know that in order for our 2014 car to be designed and manufactured using Dynamics AX, we need it to be ready by November this year and we’re all pulling together to make that happen.”

The effort of going through and evaluating our haphazard legacy systems has opened our eyes to the true value of process

James Allison, Lotus F1 Team
Phase one of the project, which covers human resources (HR), finance and procurement, went live in November 2012. It was the same weekend that Kimi Raikkonen clinched victory in the Abu Dhabi Grand Prix.

“Our finance, purchasing, HR, and store departments are now using Dynamics AX to track resources, improve collaboration and boost productivity,” says Mayer. “Staff are already benefiting from having a greater level of transparency across these departments and we’re moving to the point where we’re achieving one version of the truth with all of our data. The solution also offers them with a familiar, intuitive user experience, which means they’re genuinely excited to use the software and can easily use it without the need for extensive training.”

Phase two – which will cover all manufacturing and engineering operations – is being rolled out currently and is due to go live later this year. “This is when we will start to see the real benefits on the car,” says Allison. “We can’t wait to be able to use tools that will allow us to plan confidently and collaborate more effectively. When we’re designing the car for the next season, we work on the basis that for every three weeks in the design phase we will shave 0.1 seconds off the car lap time. With Dynamics AX we expect to be more efficient, giving our designers and engineers as much time as possible on the design phase. The longer we can spend on this, the faster our car will be.” In effect, this means that if the team can keep designing for an additional three weeks this year, they will potentially gain 0.1 seconds on the competition. That translates into potentially one grid place on the track.

“By the time this is all done, we will have replaced ten legacy systems with Dynamics AX,” says Hackland. “It’s going to be fantastic having one toolset that is going to cover everything at the push of a button. Capacity planning at the moment is currently very manual. That will all be handled through Dynamics AX. We also look forward to being able to link up all our processes so we can start properly analysing and tracking performance. This will allow us to determine what processes to be concentrating more on and to understand if our investments – time and money – are paying off.”

Lotus F1 Team’s goal of having a simple, common IT infrastructure to help manage its entire operations in a more coordinated and streamlined fashion is becoming a distinct reality. “The effort of going through and evaluating our haphazard legacy systems has opened our eyes to the true value of process,” says Allison. “We have people who spend their entire working day looking at how they can shave half a gram off a component or add a newton of downforce to something that already has a lot of downforce. Now they also realise the efficiency gains that they can gain from improving process.”

Long-term business transformation partners
Lotus F1 Team and Microsoft Dynamics may only be a year into the project, but the benefits that they have both been able to achieve already has resulted in an extension to their partnership, which will now go into 2016. “As an official business transformation partner of Lotus F1 Team in 2012 we have witnessed exciting times; both in the factory, where phase one of Microsoft Dynamics and Lotus F1 Team’s business transformation was completed in record time, and on track, where we have seen results and exposure beyond our expectations,” says Pedersen. “We can herald this partnership with Lotus F1 Team as a best-practice for our existing and new clients. We are excited to strengthen our bond further and look forward to see the manifestation of this hard work in the factory with even stronger results in 2013.”

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