IT infrastructure – plan, do, check, act

The most important IT issue to address in a carve-out is how to extract the affected organisational unit from the existing IT infrastructure effectively, efficiently and with as little impact as possible on daily operations. This requires a high level of expertise and understanding.

Experience has shown that the classic ‘plan-do-check-act’ approach works best.

• Plan: Start by conducting a detailed assessment of the current business processes, including their associated IT applications and information objects.
• Do: Next, compare this assessment to what you have planned for the new entity.
• Check: The comparison will highlight what needs to be done to ensure that business operations can continue successfully while achieving the carve-out goals. It will draw attention to the interdependencies between the two systems and what actions are needed.
• Act: These actions are then implemented during ongoing operations. In this phase, close collaboration between the IT department and other entities ‒ in particular, the new entity ‒ is extremely important. Feedback loops help minimise the negative impact on current business processes.

There’s a high risk that the entire IT environment could fail if using a ‘big bang’ approach where it goes through a large, sudden transformation. This would have a detrimental effect on the business processes that it supports. Using an agile approach can help avoid this risk. Individual IT objects (applications, processes, structures, or data flows) are adapted to the new organisational structure in small, fast, and low-risk sprints. The last step involves validating and, if necessary, restructuring, and documenting the new IT landscape of the carve-out entity.

Very few IT departments will have sufficient knowledge, experience, and resources to handle a carve-out on their own. In addition, most IT departments’ time and staff budgets are only designed to handle ongoing operations and well-established processes. It is usually advisable, therefore, for businesses to bring in external support and assistance from specialists to handle these unique and complex processes.

This article is part of a series of short articles about managing a successful carve-out. Other articles include:

• Could carve-outs be a strategy for success in the automotive industry?
• The people factor – inform, involve, empower
• Valuations – accounting, taxes, and transaction prices make valuations a key aspect of the carve-out

For more information on carve outs or to discuss how we can help your company, please get in touch with us below.