Two divestiture scenarios: fixed vs. open-ended timeline
With the current business climate, many companies are anticipating or actively preparing to divest their business. In some cases, they already have a buyer and a finalized separation approach. The timeline for this scenario is usually fixed and physical separation milestones need to be achieved on time to avoid financial repercussions. However, it is common that while still looking for the buyer, a buyer has not been identified, but the entity to be divested has been determined by the business. The timeline for this case can be open-ended, often causing redundancy and increased TCO as a separate system landscape is created from a carve-out that needs to be supported and maintained until the buyer takes it over.
In either case, strong collaboration and mutual understanding between the business and IT will ensure achievable separation requirements and realistic transitional service agreement (TSA). Datavard has more than twenty years of experience in divestiture scenarios and determining the optimal approach/solution based on your business needs.
Adopting a system carve-out strategy that fits your needs
Datavard’s extensive experience in divestitures allows us to tailor customer-specific carve-out scenarios. Generally, solutions involve one or all of the following high-level approaches:
- Logical separation – used to separate an entity within an existing system allowing the business to prepare for separation without establishing a new system landscape. A new company is created, and all relevant information is migrated ensuring business continuity.
- Physical separation – carve-out or migration of a divested line of business. Typically, company code is the preferred and standardized level of carve-out due to its relatively clean “silo”, but other organization units can be utilized as well.
- Masking – often used to obfuscate sensitive data so that a buyer cannot determine the underlying information. This is effectively used when transactional data of entities is highly co-mingled or there is minimal data that is considered “sensitive” by the business.
- Customer Specific Solution – In most cases the above approaches are combined and customized as necessary based on the required business outcome.
Divestiture is a complex process and requires assistance from experienced individuals. Datavard is available to help you understand the options, risks, and solutions to achieve your outcome whether it is a question of SAP approach or general advice for terms and TSA. Schedule time with one of our tenured architects to get your questions and concerns addressed:
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