Carve-outs
Everyone plans the ERP go-live. Nobody plans the goodbye.
In a carve-out, the old ERP never gets switched off. It just belongs to someone else now.
Process design, change management, data migration: all critical, all funded, all over the steering committee slides. What never makes the slide is everything still open in that old system on day one. Thousands of transactions:
- Half-shipped sales orders.
- Contracts renewing under an entity that no longer sells them.
- Payments still landing in the old entity's bank account.
- Service calls opened in the old system, but closed in the new one.
Get one wrong and your customer doesn't see a clean separation. They get billed twice, billed incorrectly, or worse, not at all. It's changing the wheels while the car is still racing.
Decide early, in writing, for every transaction type
- What's the cut-off for migrated transactions?
- What happens to in-flight transactions?
- How do operational and technical teams identify and close transactions in the legacy system, and deal with the volume?
- What reconciliation proves it worked?
Designing for people who haven't been hired yet
The other carve-out trap: the most important people usually haven't been appointed. The leadership team arrives weeks before close, sometimes after, and the only voices available belong to the parent, who will design the parent's process at the parent's scale. What works:
- Ask the sponsor for the bare minimum capabilities the new entity needs to succeed commercially, and focus relentlessly on those.
- Cut scope to what Day 1 actually requires. Everything else is optimisation.
- Fit to standard, and mean it.
- Appoint interim process owners from today's organisation to make the calls, and log every decision with the reason behind it.
Unglamorous work. But it's the difference between a separation your customers never notice and one they never forget.
Scott Armstrong is a programme director who recovers and delivers ERP, finance, data and CRM transformation for large organisations. Talk to Scott about your programme.