Formula 1 team Mercedes-AMG Petronas is using cloud-delivered enterprise resource planning (ERP) software from SAP to boost its regulatory compliance efforts as the sport prepares for new regulations from the Fédération Internationale de l’Automobile (FIA).

The FIA’s cost cap is set to increase from $140m to $215m to make room for new technical regulations and previously exempted items. Formula 1 (F1) teams now face growing complexity in managing performance within stricter financial boundaries.

Mercedes will adopt SAP’s Cloud ERP Private system as its so-called digital core. This will, the two entities have stated, provide real-time financial insights, predictive analytics and streamlined operations.

Michael Taylor, director of IT for the Mercedes-AMG Petronas F1 Team, said: “SAP’s technology gives us the agility and transparency we need to compete at the highest level while staying within the financial guardrails of the sport.”

In an interview with Computer Weekly earlier this year, Steve Riley, head of IT operations and service management at the F1 team, said it advises its new starters not to feel that, because they’re in IT, they’re not directly contributing to the outcome of each race.

“Some of your role might be contributing to the race that’s happening this weekend. Some of it might be capability that’s going to help deliver performance in 12 months,” he said. “But IT contributes to the outcome of races, seasons and championships. And I always enjoy talking with our new people about that contribution because it’s something that isn’t quite as front of mind sometimes.”

One use case for the SAP cloud-delivered ERP software cited by SAP and Mercedes is stock inventory management. SAP Cloud ERP Private should serve as the foundation for tracking and valuing more than 14,500 individual components in each racing car.

This is expected to reduce manual effort in FIA reporting, thereby better ensuring the real-time valuation of parts.

“SAP’s technology gives us the agility and transparency we need to compete at the highest level while staying within the financial guardrails of the sport”

Michael Taylor, Mercedes-AMG Petronas F1 Team

Riley told Computer Weekly that the team’s IT department will face new challenges at the end of the season as regulations focused on car dimensions, power systems and sustainability requirements will bring fundamental changes to the way teams and cars operate.

“Private cloud-type solutions [then] become more of an opportunity for us,” he said. “We see the regulations not as constraints, but as opportunities. We’re looking at where we can discover openings that other teams can’t.” 

The technology setup from SAP is expected to enable the team to track and allocate costs across research and development, manufacturing and race operations, automate compliance reporting with built-in audit trails, and model financial scenarios to support business decision-making.

The team is also looking to use SAP Business AI to forecast budget needs, optimise supply chains and manage inventory more precisely. It hopes this will enable it to strengthen sustainability tracking and operational decision-making – both key to the 2026 FIA financial regulations.

Data models are already being used to reduce carbon footprint and improve efficiency at Mercedes-AMG Petronas, while predictive capabilities support inventory and supply chain optimisation.

The team is also using SAP’s Business Technology Platform (BTP) and SAP Build solutions to develop custom applications that digitise workflows and enhance collaboration across departments.

For the supplier, Sebastian Steinhaeuser, a member of the executive board and chief operating officer, said: “The Mercedes-AMG Petronas F1 Team is setting the standard for digital transformation and AI-driven progress in motorsport.”

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