Running a business sometimes feels like an adventure trip. This is especially the case during times of change when entire industries are forced to move forward. Globally, more than $3.6 trillion in mergers and acquisitions happened in 2019 alone. And the outlook for all business transformations, including divestitures and carve outs, is rising driven by the current pandemic situations. Mergers and Acquisitions help organisations to secure their further growth and ensure their very existence. Companies also often decide to outsource, spin-off or sell individual business units. Some are divesting certain divisions to focus more strongly on their core business – others want to raise capital for investments in further growth.
Multiple M&A business scenarios driving ERP carve-out projects include:
- Legal entity or business assets sale
- Integration of an acquisition following company or asset acquisition
- Entity sale following an acquisition
- Corporate merger or split
- Selective carve-out of legal entities into a new SAP system
- Selective carve-out and merge into existing SAP system and chart of accounts
Why Data Transformation is the “Big Deal” in M&A and Carve-out deals?
Mergers or Carve-outs are incredibly complex projects by nature – that pose a particular challenge for the IT department. Often more than half the synergies available in a merger are related to IT. The key post-transaction reason M&A activities fail to deliver their expected value is a failure to properly integrate the technology. Besides standardising and restructuring IT systems, the focus is on data during system mergers or when a division is separated from an existing organisation. Which data must, can or may be migrated, and which historical data should be archived? There are many aspects to consider and many rules to follow. Data selection and migration at such a high level can become unnecessarily time-consuming if carried out incorrectly.
Typical business and technical challenges involve:
- Different architectures in the systems you want to merge
- Adapting applications, data and processes
- Visualising how the spin-off will affect your IT landscape
- Legal restrictions on data transfer, accurate data selection and deleting data in the source system
- Standardising organisational structures and designing a detailed project roadmap
- High data volumes
- Taking in-house developments into account and avoiding downtimes
- Different country-specific procedures in finance, controlling, materials management, sales and production
- Intra-transparent System Landscape comprising interfaces, organisational structures, functional usage
Thus, executing data migration, the centre piece of all transformations is often the most daunting aspect. The considerations are: how to make it simple, fast and secure with minimum business disruption in the remote-first world today. Organisations need support in every phase from due diligence, transitional agreement (TSA) support to audit trails with state-of-the-art software and services – for a successful outcome.
Yet the journey does not have to end in uncertainty if you plan it in advance and with the right partner. Complex projects such as mergers, carve-outs are now possible with minimum risk thanks to automated software approach – ensuring that you reach your goal securely. The software’s precise predictions allow you to plan transformation projects in detail along with accurate cost estimates. In addition, it can greatly reduce system downtime, an important cost factor, using the near-zero downtime method, therefore keeping your ongoing business operations largely uninterrupted. Unlike manual mergers, software automated mergers are much less error prone and consume fewer resources. Furthermore, the standardised process from planning to implementation has a positive effect on lead times and the project duration. All in all, rapid implementation ensures the agility of your company – an essential aspect for staying at the top in today’s increasingly competitive market environment.
Did you know that:
- Data migration for even the toughest M&A scenarios and post-merger integrations can now be done in 24 hours or less?
- You can successfully implement an SAP Carve-out project with complete system split in 3-4 months?
How? With automation. In 2015, SNP software was deployed to successfully split one of the world’s largest technology companies’ SAP Landscape and 50 TB database — five times that of the entire U.S. Library of Congress — into two separate, publicly-traded instances in 36 hours! SNP software merged two companies to form one of the world’s largest chemical companies. SNP has delivered some of the world’s largest and most complex SAP merger and carve-out projects. Our clients trust us to automate and accelerate their SAP transformations through SNP BLUEFIELD™ approach powered by CrystalBridge® – The Data Transformation Platform with Near-Zero Downtime. The essence of over 25 years of experience with 12,500 successful transformation projectsprovides a level of insight and control that can’t be achieved with traditional methodologies to “Keep the lights on”!
The one-stop shop end to end transformation solution supports customers and partners through 360 degree project preparation, system analysis, roadmap creation, running the transformation, going live and post-support like SAP Managed Services. The SAP ecosystem trusts BLUEFIELD™ approach to:
- Merge enterprises and systems: fast, secure and remotely – without business disruption.
- Reduce the usual time window for your M&A, Carve-out projects by up to 75%.
- Ensure faster ROI and risk-free implementation
- Save up to 70% of the time, effort, and cost of your project, compared to traditional methods
- Achieve a carve-out with minimum risk and costs after the sale of a business unit
- Provide an efficient system within budget for the carved-out unit
- Secure, legally compliant data transfer to the buyer of the divested unit
- Adhere to due diligence issues
- Reduce the complexity of your SAP project through best of breed selective data migration scenarios
- Collapse multiple projects into one project with reduction of test cycles as well as downtime
- Offer flexibility to go-live on the day of your choice
- Move your operations to the SNP Cloud or partner clouds if desired
CLICK HERE to meet a BLUEFIELD™ Transformation Expert to “Keep the best Transform the rest”!
For more questions or a demo connect at SNP JAPAC Hotline +65 9820 9905 or email at email@example.com
This article is sponsored by SNP group