In my last blog post, I wrote about the challenges businesses face when navigating SAP migrations and transformations, particularly in complex scenarios like mergers, acquisitions, and restructurings. I introduced migration tools like CrystalBridge that help organizations manage their SAP environments more efficiently, reducing risk and ensuring that critical data is transferred and transformed correctly during transitions.

For this post, I wanted to take a deeper dive into the topic of divestitures. In such scenarios where a part of a business is sold, the primary challenge is to transfer relevant data to the acquiring company while ensuring a cleanup in the seller’s SAP system. While a greenfield approach is theoretically possible, a standardized and tool-based approach offers a more precise and efficient approach for data management, especially in light of growing cloud adoption and tightening compliance regulations.

Considerations should include historical data, flexibility in choosing the cutover date, minimization of downtime, the balance between automation and manual work, as well as testing, and validation.

Different scenarios can occur when divesting a business unit:

The complexity of a carve-out depends on how the business unit being sold is structured in the SAP landscape. Current tools provide robust handling for:

1. Complete company codes: Carving out an entire legal entity from an SAP system is relatively easy using SNP’s technology. This approach is not only driven by a standardized methodology, content, and a high level of automation – it also comes with downtime minimization features to reduce business disruption during the separation.
2. Plants or operational units: Divesting operational units, such as individual plants, is more challenging and inherently more complex. The best approach is to carve out a plant into its own company code, and then follow the standardized method of carving out an entire company code.
3. Co-mingled data: Handling co-mingled data continues to be one of the most challenging aspects of divestitures. However, advanced data migration techniques and selective extraction tools allow businesses to separate and securely transfer their data, even in highly integrated systems.

Clone and delete approach

SNP Kyano supports two approaches for carve outs: selective migration and the clone and delete approach. In this approach, the complete SAP system is copied and undesired data is removed. The clone and delete approach is the go-to method for carving out entire business units from an SAP system, such as company codes or controlling areas. This approach is very standardized in SNP’s toolset and driven by our BLUEFIELD methodology and Mission Control.

Starting with high-level organizational units such as controlling areas or company codes, all data associated with these units is identified across all SAP modules. Subsequently, all such data belonging to these units is deleted, no matter if it’s transactional data, master data, or technical data such as change documents or IDocs.

The major advantages of this approach are a short implementation timeline and the ability to hand over a copy of an SAP system containing only the data from a subset of the company codes to the buying party in an M&A deal.

Selective migration approach

The alternative to the clone and delete approach is to physically migrate the relevant data, e.g. into an already used SAP system on the side of the buying party of an M&A deal. However, even though historical data can be migrated using SNP’s migration tools, this approach is better suited for small data volumes.

Cutting-edge tools for company reorganization

Several specialized tools and partners are available to support SAP migrations and data transformations in M&A and divestiture scenarios. At SNP, we provide services that help manage complex transformation projects. Our CrystalBridge software and SNP Kyano platform facilitate divestitures by enabling businesses to analyze system landscapes and selectively extract or migrate their data. With features that allow for more efficient and controlled data transformations, our tools help address challenges like managing sensitive information during carve-outs.

As data privacy regulations tighten, ensuring compliance during divestitures has become a growing concern. We offer mature tools and technologies which minimize downtime, provide integrated data validation, support optional data anonymization, and enable selective deletion. With a clear and content-driven approach, we help businesses implement company reorganizations quickly while protecting their sensitive information. Our platform provides such capabilities, supporting our customers’ compliance needs throughout the divestiture process.

By integrating these solutions into divestiture projects, businesses can better manage data security and privacy, ensuring a smooth transition for both the selling and acquiring companies.

A proven track record of successful business transformations with SNP

At SNP, we have helped hundreds of customers with complex carve-outs and SAP transformations. For companies like Novartis, SHW Automotive, and BSW Timber, we delivered tailored solutions and consulting services to manage critical carve-outs and migrations with minimal business disruption. Whether you’re implementing a global system transformation or executing a time-sensitive carve-out, our expertise ensures a smooth and compliant transition, making us a trusted choice in the industry.

For more information, you can explore our range of customer stories.