A winning Formula: Computer Associates' F1 partnership

McLaren is recognised as being the class act in the current Formula One field, having taken the drivers and constructors championship in 1998 and already showing that again it has the car to beat in 1999.

To complement and develop its technical superiority, the McLaren Formula One team has brought together an enviable group of business partners, of which software giant Computer Associates is, in the words of McLaren boss Ron Dennis, "a key component".

At the Australian Grand Prix in Melbourne I spoke with Amanda Lukianchuk, corporate marketing manager at Computer Associates in Australia and asked her to describe how the two organisations work together against the dynamic and competitive backdrop of Formula One.

SG: How did you become involved with the McLaren team?

AL: CA is a technology partner of McLaren. I think the team realised that technology could really help it in its aspirations to be world champions.

Then it seemed to be a good fit for us - if we're looking after them on that side, we would also sponsor them. That tends to be the way these things go anyway: if the team sees something that it needs, then it will look for a sponsorship arrangement with a suitable vendor.

SG: Have you had sponsorships in motor racing or with any other sports before?

AL: No, not really. Certainly not in such a global sport as F1. There are various local teams that we support. In Australia, CA sponsors the ACT Brumbies, a Rugby Union team. And this year we have taken out the 'naming rights' sponsorship for them, which in previous years was just a minor sponsorship. In the US, there's been some baseball teams but really it's very, very, minor stuff. The McLaren team is the first big global sponsorship CA has done.

SG: What do you then see as the key benefit? Obviously it's a chance for global exposure and being able to highlight the software products you're developing ...?

AL: Branding is a really big thing for Computer Associates. We don't do a lot of corporate branding so we make sure that it is very targeted when we do.

The second thing is the technology. We have done a few initiatives jointly with McLaren: newsletters, ads and press releases on how the team is using CA's software. And that to us is very important. It's OK to say that Computer Associates is a great company, but unless we can actually provide some business benefit to whoever it is that wants to use our products, then we don't see a lot of value in it.

McLaren uses CA's Unicenter TNG, which is an enterprise management system, to monitor its cars, as well as Jasmine, which is an object-oriented database, to keep a whole lot of data in picture format. The team is finding it very useful.

SG: Does Jasmine work on a historical basis so you can compare telemetry data from, say, a race and a previous testing period?

AL: It does, but only in so as far as you keep the data for that amount of time. But we have something new coming in with Unicenter TNG.

Our new product, called Unicenter TND, is a time-based product so if you see some problem coming up in your system - or, in this case, a Formula One car - you can actually roll it forward to see what would happen to it in the future, without it actually happening. So you can use it in a predictive sense.

We are, in fact, the only people in the whole world that are currently doing this. We call it our neugent technology - a 'neural agent' technology. And McLaren will hopefully be taking advantage of this as well in the future, because it would be very valuable for the team.

SG: So what other skills does CA bring to the partnership?

AL: There is a saying that the 'CA' of Computer Associates actually stands for 'Change Always' and we think there is a lot in that. We don't have hard and fast rules that can't be changed. We just adapt as we need to, to provide the solutions and satisfy the business needs of our clients.

SG: The relationship with McLaren is always referred to as a 'partnership' rather than a 'sponsorship'. What do you see as a difference between the two? Do you have a closer, stronger working relationship?

AL: Yes, we do. We have account managers on our side and they have account managers on their side, and we work together on all sorts of different things like, for example, advertising. We have an ad with Mika Hakkinen in it and the copy is talking about our product and how McLaren uses it.

We also develop user stories and things like that.

It is very much a case of a partnership between two companies working together saying, 'OK, we have this opportunity or we have this issue that we would like you to help us with, so let's work out how we can do it.' In a sponsorship, it tends to be a case of, 'Here's the money - what are you going to give me for it?'

SG: What has been the effect of your F1 involvement on CA's brand equity and brand image?

AL: We have many instances where people say: "Oh, Computer Associates, you sponsor McLaren." Or: "Mika Hakkinen has you on his left breast." So, in that regard it's been very, very good.

An added benefit has been that, because McLaren won the World Championship last year, the team has been splashed about everywhere, so the CA name is everywhere. It is then recognised very much more all the way round the world.

SG: It also gives your products, Jasmine and Unicenter, great coverage ...

AL: Yes, it does. It gives people an idea of what the products can do. If Unicenter can manage the telemetry out of a Formula One car, what can it do for your business? I think it gives everyone an anchor of reference.

SG: Have you got any idea of the effect of the partnership on CA's bottom line?

AL: I can really only talk for the Australian market. It's been influential in deals but something like a sponsorship would never actually clinch a deal. There's always lots of other things involved and it comes down to what the clients need and what business issues they need to solve.

Sometimes our product may not suit their needs. They may love Formula One and love what Unicenter does for McLaren, but it may not suit their business.

So the recognition factor is much more important.

SG: Apart from the testimonials and the advertising which you've done with McLaren, in what other ways is the partnership marketed?

AL: We keep our clients updated on how McLaren is doing throughout the year. We get bulletins from McLaren and then we send them out to our clients here in Australia so that they can keep up to date. The people who are really interested in F1 get that added benefit. Of course, it's a great discussion point with anybody. You're always talking about F1!

SG: So how does CA measure the return on its investment in the partnership with McLaren?

AL: With any sponsorship, there are two main areas of opportunity: exposure and networking.

Exposure increases our brand awareness; it gets the Computer Associates name out into the general community, including our target market.

The networking area is far more personal. It allows us to give our clients an opportunity to get up close and personal with the team, the drivers, the races, the excitement. We, at CA, get very excited about the whole F1 environment and we share that with our clients.

For those who really love car racing, this is very special.

The third area is the software partnership that we have with West McLaren Mercedes. This is very valuable to us as it is an immediate reference for our Unicenter TNG and Jasmine products. The team has assisted us greatly in the production of demonstration systems for these products using hypothetical F1 data.

SG: Do you think IT may take over tobacco's current position as key backer of the sport?

AL: It could very well do. With all the laws that are coming in and the prosecutions against the tobacco companies, you just don't know what is going to happen with them in the future. But IT really is the future, Full Stop. I can see IT companies taking over more and more sponsorships on a larger scale.

SG: You must have been very happy with McLaren bringing home the championship last year. Does that put additional pressure on the company?

AL: Computer Associates has never been known to rest on our laurels and the McLaren team has never rested on its laurels either, so we'll be endeavouring to leverage as much as possible this year from its championship wins and from other things we are doing.

SG: The partnership at the moment is set to finish in 2001. Will you be extending that and how do you see the partnership changing?

AL: Two years in the IT industry is an awfully long time. I'm sure you'll agree that two years in Formula One is an awfully long time too!

As I say, we intend to leverage very much over those next two years of the partnership, so who knows? We hope for big things.

Life in the fast lane

Siobhan Gleeson then met partner co-ordinator for Tag Mclaren Marketing Services, Richard Carmichael, to ask him what keeps their relationship on the fast track.

SG: Talk me through how the relationship with CA started. When did you get together and how has it developed over time?

RC: In mid-1996 Lars Ahlberg, who was manager for Northern Europe for Computer Associates, was a F1 fanatic. CA was looking to become more widely known around the world and he penned the idea that F1 should be the platform the company should go for as the sport is hi-tech, global and attracts a following from both hardware and software manufacturers and vendors.

From what I know, CA went round a number of the teams but realised that the marketing potential for McLaren was that much greater.

The deal came to fruition in February 1997, with the launch of the West McLaren Mercedes brand name and from that time it has grown and developed quite considerably.

SG: And the partnership is funded by software supply and a financial contribution?

RC: There's a number of ways in which CA act as a technology partner. But yes, quite a considerable amount of cash changes hands, as well as people and software products.

SG: Aside from the software products Unicenter TNG and the Jasmine database, what do you see as the key benefits of having CA as a technology partner?

RC: Firstly, it's a good company to bounce names and ideas off. If we're going to purchase a software product, CA may have come across the company we plan to purchase off before and have some background on it. Also, CA has a lot of products that potentially could become useful to us. It is currently the second or third largest software company in the world, so we were not exactly going to sneeze at it when it came along and offered us money and people to increase how we run as a team!

It is a very well-respected international organisation with a great name, and it fits very well alongside the other companies we have on the car. And CA is a very good technology partner.

SG: How pivotal is CA to McLaren's superiority?

RC: It's very difficult to put winning or success per season on just one item. At the end of day, it is a team effort and the partners themselves - be they technology partners, principal partners or official suppliers - all play a vital part.

There's no denying a company like CA does help us to win a world championship, but I wouldn't say it comes ahead of any of the other partners in there because it is, after all, a team sport.

SG: Computer Associates is currently developing its TND technology. How keen is McLaren to incorporate its use over the medium to long term?

RC: We would like to have a look at it. There is certainly benefit to the McLaren team of being able to use this sort of technology but until we've had a chance to really evaluate it, I couldn't comment on it.

I think potentially if it falls within the rules, so yes, it would be a very attractive product to use.

SG: Do you think the F1A will start to put restrictions on the use of IT?

RC: I think it could be well be a move it looks into because you see more and more IT companies on cars. Hardware manufacturers are vitally important to the design and manufacture of the car and when it comes down to number crunching - be it computational fluid dynamics, aerodynamic research or basic mathematical calculations - we need databases. So IT suppliers are vital to Formula One and in the last five years they've become a lot more apparent than they were previously.

I think there may become a day when the FIA cracks down on it, but at the moment there are quite strict rules on what you can and can't do.

For example, you can't transmit data to a car, you can only receive information from it. And you're not allowed to have an active intelligence on board a car, either.

SG: McLaren makes a point of referring to its business sponsors as 'partners'. Was this a conscious decision on the team's part in terms of strengthening and developing the relationship long term?

RC: Yes. At the end of the day, we don't like to see names come and go off the car. Every year, if you have 25 or 30 different names associated with the team, of which maybe only a third are on the car, some will fall away. Maybe the partnership doesn't work; perhaps internally the company can't make it work; their chairman leaves or there's a revolt internally and they come away.

We like to develop long-term relationships. We call it a partnership for a very simple reason: the direct definition of sponsor is someone who gives money - and that's it. Companies don't give us money. They give us a combination of things and from that they want something in return, not just advertising. So we call them partners because they work very closely with us.

We have day-to-day contact with a number of these people around the world.

Sometimes, eight or 10 times a day we have meetings with them and we work with their different geographies and different locations globally, so it is a true partnership.

They benefit from the image, name, fame and reputation of McLaren. In return, we benefit because we can build, design, research or run a better organisation using their skills and products.

SG: Does having CA as a technical partner make it easier to attract other types of sponsors?

RC: The CA name has certainly now become a lot more available on people's lips. There's no denying that if you have world brand leaders' names on the car you will attract other world-class companies. If you run a car without well-known companies on there you're going to struggle to attract other well-known companies.

SG: How does McLaren help CA to maximise return on its investment in the team?

RC: We have a number of different areas that CA has bought into within the contract. It can use the image of the car, the drivers, the merchandise, the VIP hospitality and so on, internationally.

CA can use it to motivate its staff internally. It can bring people to the factory. It can use a replica car or the image of the team to show that it is a cutting-edge company that is pushing itself forward in a very exciting and dynamic sport.

SG: How would you rate CA's success in marketing the McLaren association?

RC: In marketing terms, a lot of companies are very envious of what CA has done.

Three or four years ago, nobody would have known who CA was. Today, people know it's on a racing car, and hopefully the word is beginning to spread.

I know within the IT community it is very well known as a company: it is a major powerhouse and force. We think it has done a very good job with how it's marketed the association. We hope to increase this, but we want to see slightly more use of the image in some countries where it's never been used before - mainly the homebase in North America. At the moment F1 is not a big deal there but we're going back racing there in 2000.

SG: Does winning the championship make it easier to keep partners like CA happy?

RC: It makes it more difficult. Once you start delivering victory, that's what they expect. We win three or four races - great. Then when we lose or breakdown they come straight back to us and say: 'Why didn't you win for us this weekend?' With the partnership, they believe they are part of the team, and they are. When we win, we win for our partners and yes, the pressure is on, not just from them but also from ourselves. We want to win again and they expect us to deliver a second World Championship.

SG: How did people react after what happened at Melbourne?

RC: A lot of the people were very worried at the beginning of the season that the cars didn't finish the race. But they knew, having read either our Website or any of the press, that our cars were launched quite late in the season and had not done a huge amount of testing before the season began. There were bound to be one of two reliability problems with the enormous amount of changes we made to the car. There are 3,500 parts on an F1 car, excluding the engine. We kept just nine of those from last year.

Yes, people were upset and they wanted to know why, but we were able to explain to them what went on. Fingers crossed that for the rest of the season we will start delivering victory after victory and they'll think Australia was just a little bit of a hiccup!

SG: The current contract with CA is set to expire in 2001. Will you be looking to extend it and how do you see the partnership changing?

RC: We hope it grows both in terms of a closer relationship between the organisations and also financially as well. We think that the better we do and the closer we work with CA, the more it will realise the benefits we can offer and hopefully the more it will give us on a technology front.

As we grow, hopefully the partnership will grow with us. We're building a facility where we're going to house all of our businesses, not just the F1 team. I'm sure CA will play a major part in the new building, what goes in there and how it's managed.

SG: Where do you see IT's involvement in F1 leading? How important will companies like Computer Associates be to the sport in the future?

RC: Enormous. If tobacco is ever totally banned by the Government or by the F1A, all the teams, with the exception of Stewart and Sauber, will have to look for different partners.

IT companies are, even today, seen as pretty boring. They make white boxes that sit on your desk or software you can't see - so if they can be associated with a sport, be it F1, sailing, football, rugby ... Look at any sport today; the IT companies are pouring in. Also they (IT firms) are cash rich, innovative and run by some pretty active young people. They're not set in their ways like insurance companies and banks. They get up and do things very differently from other companies. Motorsport works in a similar way to that. It's fast, decisions have to made quickly and it changes from week to week. Hopefully, McLaren will keep its good relationships with companies like CA and the other technology partners but will also attract new partners in areas where we need them.

We are looking for people who are the best in the world at what they do. We can offer them a partnership with a company that it is the best in the world at what it does. It's a win-win situation.

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