Why use Managed Services?

Divestitures
Overview

The current economic environment will continue to see a high degree of divestment activity as some organisations look to grow and others to focus on core competencies. Divestitures impact all areas of a company. The goal has to be achieving effective business continuity while transitioning business processes, data, people and IT systems.

The Challenge

There is often a year’s ‘phase out’ for the divested organisation to move from one organisational structure to the next. This is hardly sufficient time to select and implement a new ERP or supply chain system. Yet organisations that have spent years integrating and consolidating their business processes and IT systems find themselves with 12 months to de-couple and transition them.

Areas to address: The supply chain

Most medium and large companies have amassed a large number of customers and trading partners across the globe. They have fixed contracts in place. They have a huge amount of historical data regarding these relationships. It is vital that the divested organisation maintains continuity in its supply chain and B2B transactions – at least in the short term. In the future, the acquiring organisation is likely to impose its business processes and contract agreements in order to achieve efficiencies through economies of scale. The inability to maintain positive and productive relationships with customers and partners will damage short term profitability and long term growth.

Areas to address: IT systems

Separating IT environments is generally regarded as one of the most challenging aspects of any divestiture. It is challenging enough when those systems are entirely internal but much more difficult for B2B systems that are likely to be integrated with external partners. The nightmare scenario is where the IT systems are not sold with the organisation and new systems have to be put in place – with data transferred – to meet the divestiture deadlines. Even when this is not the case, it is likely that the acquiring organisation will want its acquisition’s systems to integrate with its corporate IT infrastructure.

The role of B2B Managed Services

Within divestitures, B2B Managed Services can play two key roles. First, it is an interim solution through the transition period to ensure business continuity. For example, providing electronic invoicing services with partners that ensures any transition of supply chain, financial or ERP systems remain invisible to your trading community.

Secondly, companies increasingly regard IT and supply chain as non-core activities so divestiture not only acts as a catalyst to focus on core competencies it is an opportunity to upgrade to the latest B2B infrastructure and systems without significant investment or increasing internal headcount. It also ensures that the divested organisation can quickly accommodate the trading network of its new owner should that be appropriate.

Issues to consider

  • How integrated are your current systems and processes with the parent organisation?
  • How long do you have to complete the divestiture transition process?
  • How will you protect your customer and trading partner relationships during the transition?
  • Will you have to a new B2B infrastructure following the divestiture?
  • How will you ensure the data quality and integrity of your B2B systems during the transition?
  • Will you have the correct level of B2B skills available after the divestiture?

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