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Successfully Managing Carve-outs

Successfully Managing Carve-Outs with SAP ERP and SAP S/4HANA

In today’s dynamic business world, many companies face the challenge of having to represent business units as a carve-out or spin-off within their IT systems for various reasons. Restructuring or consolidating business units presents the same challenges for an IT project.

All such transformation projects require careful planning and execution, as they have a significant impact on the IT systems in use – especially when comprehensive, integrated systems like SAP ERP or SAP S/4HANA are involved.

What Does the Right Preparation and Planning Look Like?

A successful carve-out starts with thorough preparation. In addition to identifying the affected organizational units, related business processes must be analyzed and, if necessary, redefined. The assignment of employees and their respective responsibilities also plays a crucial role. Without effective change management from the very beginning, restructuring efforts will not only fail due to IT challenges but also due to organizational resistance.

Furthermore, the relevant data and systems must be analyzed at an early stage, and appropriate measures must be prepared. Within the context of a reorganization, companies should carefully consider whether to conduct:
 

  • Data Cleansing,
  • Standardization,
  • Harmonization, or
  • Optimization of Data,
  • Systems,
  • or Processes.

A common cost driver during implementation is compliance and reporting requirements if they are not addressed in advance.

Successfully Managing Carve-Outs with SAP ERP and SAP S/4HANA
Mapping a Carve-out in SAP


What Challenges Can Arise During Implementation?

As is often the case, effective project management is a key success factor in the technical implementation of a carve-out or the restructuring of organizational units within an SAP system. A well-coordinated and realistic project plan that also accounts for organizational aspects such as change management is essential. Effective project communication—an often underestimated task—is also a crucial element.

On the technical side, data migration in all its facets is one of the main components of a carve-out project. It is essential to clarify and implement key questions such as which data will be migrated, when, how, and to where.

No SAP system operates in isolation. Therefore, interfaces to connected systems such as warehouse management, CRM, BI, or other systems must be given special consideration. Additionally, custom code, system extensions, and modifications must be reviewed to determine whether they are affected by the carve-out and need adjustments.

Last but not least: testing and cut-over. These final steps require the utmost attention to prevent issues during the technical transition and go-live.

A successful carve-out requires close collaboration between IT teams, business departments, and external partners or consultants. With the right preparation and a clear plan, companies can overcome challenges and fully leverage the benefits of a new corporate structure.

XEPTUM has extensive project experience and expertise in all aspects of carve-out and restructuring projects. We are happy to support you with your carve-out project.

Contact us for a personalized consultation and learn how we can help you achieve your goals.

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