Your company has decided to divest part of its business, the deal is official, and the steps towards the final separation need to be kicked off.
Typically your firm will have set up a global program to manage this divestiture. The IT separation and, more specifically, the IT Infrastructure separation will be one of the subprograms to manage.
The IT divestiture program usually engages a central team in designing and partly executing everything that needs to be done to carve out all user related IT infrastructure and services. The local IT organizations will provide the relevant country- or site-specific knowledge and execute those actions that need to be carried out on site.
In general, a carve out project has following central objectives:
1. Hand over a running business
The buyer expects the acquired business to continue working seamlessly. This aspect is usually an essential part of the Transitional Service Agreement (TSA) that both companies sign.
In high level this involves:
- Applications and SW that the employees need.
- Mail history, mail forwarding, etc.
- Shared or individually accessed data.
- Maintain networks operative until the buyer connects them to their network.
2. Protect intellectual property
When handing over the data, it is important to make sure that no confidential data is included. You’ll want somebody from the divesting business to sign off what data can be delivered.
3. Minimize remnant costs
Costs in IT have a certain inelasticity, meaning that smaller volume now, might not reflect immediately or automatically in your expenditures because you have ongoing contracts that allow only a certain degree of flexibility in adjusting volume, cancellation penalties, etc. It’s necessary to examine as many contracts as possible to figure out which can be split, transferred to the buyer, canceled, or adjusted to the new volumes.
It is important to clarify in the acquisition deal, or latest when drawing up the TSA, which IT costs will be transferred to the buying company: Leased Hardware, Cancellation penalties, etc.
4. Get a hard sign off at the end of the project.
As the carve out progresses, and each country or migration unit, is handed over to the buyer’s responsibility successively, it is important to get partial sign-offs and a final sign off at the end.
From this point on, any upcoming issue is now the concern of the buyers IT organization with no exception.
Having this sign off means that the clean-up can start. Data can be deleted, Servers decommissioned, contracts canceled, and user accounts removed thus contributing to reduce remnant costs further.
Contact us and let us know where you are in your divestiture project and how we can contribute to a smooth execution.