It’s not an industry often thought of in conjunction with ERP or accounting systems, but the auto racing industry is under the same pressures as any other organisation to get its finances in order off the track
One of the most incredible things about my job is the different kinds of organisations I get to work with. ERP is a great equalising force. If you make revenue and incur costs, you need a system to manage it. For me, it means getting to meet people from all walks of life, from sweet manufacturers, through to gift shop good retailers, museums, charities (as per my last post) and even sports businesses. While the outputs of these businesses are all very different in nature, there’s one thing all of them have in common – they need a supporting business management and finance system that can give them a real-time view of expenditure and income.
One of the organisations Greentree works with on a global basis, whose story really stands out, comes from the auto racing industry. Specifically, Chip Ganassi Racing Teams – a leading competitor on the IndyCar, NASCAR and IMSA circuits, America’s equivalent of Formula 1. Perhaps it’s not an industry you imagine you have much in common with. And yet, behind the scenes, the challenges faced for a racing team are just the same as any other business looking to be successful; especially when it comes to financial accountability.
A complex revenue model
Now, of course, the goal of every racing team is delivering wins. And, to win, there’s a lot going on behind the scenes. You need the best car parts, the best staff and – of course – the very best drivers. But that requires funding. Each time a team enters a race like NASCAR or IndyCar, it can cost upwards of $200,000 per vehicle they enter. That means investment. And, behind that investment are the sponsors.
The need for real-time data
As viewers of the sport, we see the sponsorship logos presented on the cars the brand is backing, but, as well as the advertising, both team management and the sponsors require precise updates after each race, detailing the costs of managing a 50-person race crew for each event. As with any other business – and as you’ll know – creating these reports and gathering this information in a timely fashion is stressful; and it takes time – especially with traditional finance systems and processes. Win or lose, the team must do everything it can to provide the right reporting, both internally and externally; clearly demonstrating to sponsors that it is spending its money in a way that will help generate the best possible return.
Holistic insights – across your operations
But getting that complete overview of all expenditure – team expenses, cost of parts, salaries, race day hospitality, for example - means having a system in place that will capture everything – so updates can be given to sponsors shortly after the event. That’s where we’ve been helping them. Using Greentree, live information sharing between Chip Ganassi’s widespread offices is possible, and they’ve been able to establish Quad accounting, delivering granular reporting on the multitude of expenses that the various companies involved in putting the race car on the track run up at their events. The team can sort through all financial data and extract the most specific of costs at any time – right down to the number of fuel pumps or rear-end housings it has purchased. That means they’re prepared to report back in a timely fashion after each race.
This is a really common problem across the finance function. Siloed data, disparate processes, and an inability to see the whole quickly enough can slow decision making and make it challenging to separate meaningful insights from rafts of data.
Sponsorship – customers or investors for any other business – is crucial to success – so holding on to customers/investors/sponsors when you have them is vital. That means showing you’re a slick operation, using their money well. You want to let them know you’re a business they want to be associated with and stay with. Yes, that means success on the track, but it also means being able to provide a meticulous level of detail back to sponsors soon after each event. After all, what’s worse than letting the stress of not being unable to account for all costs efficiently detract from the joy of a win?