Gary Niblett and Gerald West presented on the challenges of divesting businesses that use SAP systems. Divestments are complex due to commercial, legal, and technical factors. There are various techniques for separating divested entities from shared SAP instances, ranging from direct separation at sale date to transitional service agreements. Key considerations include contractual documents, licensing, access controls, and ensuring appropriate data separation. Questions were invited from the audience on untangling SAP systems during divestment transactions.

1. Divesting Businesses Means Untangling SAP
Gary Niblett and Gerald West (Serco)

2. Introductions
Gary Niblett
SAP Divestment Portfolio
Manager
Gerald West
Head of Security and
Controls Assurance 2

3. Agenda
1. The Divestment Scenario
and Serco’s Programme
2. Why are Divestments
Challenging?
3. Contractual Documents
4. Techniques to Separate SAP
5. Licensing – SAP &
Other Apps
6. Security and Controls
Aspects
7. Questions?
3

4. The Divestment Scenario
• Sits on Corporate Single Instance
SAP System (Global Template)
• Discrete parts of the overall
Business Divested 2012-15
• Can be complete Legal Entities
(Company Codes) or part of
• International Services Company
Seller
Buyer

5. The Challenge
One of the
most
complex
business
transactions?
Complexity
• Deal Sensitivity
• Inappropriate
data access / loss
• Timescale, Scope,
Cost, Reputational
Risk
Risk Business
Readiness
Availability of
appropriate
internal and
partner
support
5

6. Complexity
• Commercial / Legal
• Regulatory
• Emotional
• Share Price Sensitivity
• Deal Structure Variation
• Systems / Processes
• Infrastructure
• Operational Transition
• Licencing
• Data / Security

7. Complexity
- Who will offer to
buy & what do they
want
- This can (and will)
change
considerably!
Deal Structure Systems /
Infrastructure
Separation
- Lots to Consider!
- Not to be
underestimated!
7

8. Risk
• Inappropriate data access / loss
8
• Deal Leak
• Timescale / Scope /Cost /Reputational
Risk

9. Risk
• 3rd party data kept
separate
• Host data not given
to 3rd party
• CAN’T DO what I’m
not supposed to!
Data access /
loss
Timescale / Scope
/Cost / Reputation
• Deal will develop
over time
• Who will buy?
• What will they want?
• What are we
prepared to provide?
9

10. Business Readiness
• Are internal and external
resources prepared and
suitably skilled?
10
• How ready is the
Acquiring Business?

11. Business Readiness
• Typically already
under pressure!
• M&A
• Group Finance,
Business Finance
• Finance SSC
• Fleet, Mobiles, IT, etc.
Internal Resource External Resource
• Who will/may be
needed?
• Availability of
appropriate external
support?
• What position is the
Acquirer in?
11

12. Contractual Documents
Sale Agreement Transitionary Services
Agreement (TSA)
Lack of focus, detail, ambiguity will COST!
What is being sold and
for what. Will specify
the approach
including any TSA
arrangements
Detail the approach during
the TSA Period, what
services will be provided
and how /when will the
transfer happen
12

13. Techniques
Direct Separation at or shortly
after Sale Date
Typically Increasing Complexity
Provide a
System
Export
Provide a Full
System Copy via
System Landscape
Optimisation (SLO)
Acquirer has their own
system (maybe SAP,
maybe not)
Acquirer wants your
SAP System or part of it
Set up Business on a Stand
Alone Platform e.g. SAP
Business ByDesign 13

14. Approach – is a TSA Required?
• Typically a ‘simple’
Business being
divested
• Acquirer well
prepared
Direct Separation
at Sale Date
Transitionary Services
Agreement Required (TSA) to
support Migration Approach
Increasing Complexity
• More commonly a TSA will be required
to facilitate systems setup and transfer
• Typically 3-9 months duration.
Sale Date
TSA End
Date
TSA Period
14

15. What are you Selling?
• .
15
A Complete Legal Entity
Sale Date
TSA End
Date
TSA Period (if required)
Part of a Legal Entity
Sale Date
TSA End
Date
TSA Period (if required)
Create Newco
Trading
If selling parts of a legal entity (collection of Assets) it is advantageous Tax wise to
create a new legal entity ‘Newco’ and sell this after a short trading period

16. Licencing
• Agreement - SAP Contractual Position
• Novation - Divestment Clause
• Transition Timeframe
• Solutions

17. Security and Controls - Checklist
• SAP Access
17
• Non-SAP Applications/Directories
• Assignments of Users
• Hierarchies & Delegated Authorities
• Data Processes

18. Security and Controls – SAP Access
• Segregation of Users (Grouping)
18
• Clarity on organisational restriction mechanisms
• User access restricted by organisational entities
• Detective report to flag exceptions
• Speedy remediation process

19. Security and Controls – SAP Separation
• Challenge - Divested company wants our SAP
system
19
• Options - SLO/System export
• Data Security/ Data Handling
• Software licencing

20. Questions?
20

21. Divesting Businesses
Means
Untangling SAP!
Thank You
Gary Niblett
Blue Change Limited
Structured Business Change
gary.niblett@bluechange.co.uk
07714 934932
Gerald West
Serco plc
gerald.west@serco.com