Solving Problems of Business Divestiture and Carve-Outs Conundrum
Mergers & Acquisitions, Business Divestiture and Carve-Outs
Due to market changes and value decisions, companies tend to sell either a sub-business, product range, or Assets to a competitor or new buyer. In other cases, the Business performs either an internal reorganisation with a forecast to sell in future or a consolidation of multiple ERPs to move to a central ERP. Business decisions arising from mergers and Acquisitions (M&A) or divestitures are widespread and have rapidly increased in the past few years. As most of these transactions are confidential, some real business progress may happen way before the real IT carve-out. Potential challenges for Business arise in the below key areas:
- Data and Security Accuracy
- Business Continuity
- Change Management
AG’s framework for M&A and divestitures employs proven methodology and practices gathered from successful carve-out experiences, using tested technologies and an agile approach. AG's SAP Carve-out practices support businesses in making crucial decisions and speeding up the initial review to minimise risk and recognise the drivers for change management, which is crucial for successful carve-outs.
Strategy & Approach
Our strategies are aligned with different kinds of Business carve-out scenarios such as organisational restructuring, business shutdown or closure, sale of the business unit or assets and ERP consolidation. AG's Governance methodology aims to reduce business and operational risks and increase resilience to changes, which is essential for an Agile approach.
- Day One Readiness
AG’s tested approach, which engages an agile framework and integrated testing cycles, will focus on absolute value proposition by enabling users to smooth the transition to the new ERP from Day 1. Our key elements of the Change Management plan including but are not limited to:
Business ownership & Involvement at all stages
Identification of caveats for change and remediation
Intertwined Change Management and Project Planning
- Connected Systems
With Intelligent Enterprise as the core of operations, AG’s Application Integration suite accelerates connection to third-party applications identified as part of the carve-out. Our integration expertise support the adoption of Industry 4.0 by ensuring that the existing landscape is tightly integrated and connected. Our support for integration includes but is not limited to:
- Reduced System downtime
Business downtime during the cutover phase before Go-Live is critical to ensure Business continuity. A poorly planned cutover combined with extended downtime may increase the business's transformation and operational efforts and cost. Multiple test cycles and dress rehearsal simulation of cutover, including the data migration and integration activities, helps eliminate more extended downtime. AG’s innovative methodology and proven approach help to enable low or near-zero downtime for large transformations.
- Data Migration Services
The key to successful carve-out is identifying the business rules for data separation and ownership. Every carve-out is unique due to the type of divestiture.
- Company Code level split
- Plant-level Split
- Mixed Organization- Profit Center level split
Our Data migration services consist of expertise in readily available tools like SAP SLO & LT, Datavard etc., as well as custom migration programs with core ABAP/HANA architecture, which helps for rapid migration, cleansing and validation of data.