Divesting Businesses Means Untangling SAPGary Niblett and Gerald West (Serco)

Introductions

Gary Niblett SAP Divestment Portfolio

Manager

Gerald West Head of Security and Controls Assurance 2

Agenda1. 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

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

The Challenge

One of the most

complex business

transactions?

Complexity

• Deal Sensitivity• Inappropriate

data access / loss• Timescale, Scope,

Cost, Reputational Risk

Risk BusinessReadinessAvailability of appropriate internal and

partner support

5

Complexity• Commercial / Legal• Regulatory• Emotional• Share Price Sensitivity• Deal Structure Variation

• Systems / Processes• Infrastructure• Operational Transition• Licencing• Data / Security

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!

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Risk• Inappropriate data access / loss

8

• Deal Leak

• Timescale / Scope /Cost /Reputational Risk

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

Business Readiness• Are internal and external

resources prepared and suitably skilled?

10

• How ready is the Acquiring Business?

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?

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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

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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

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 DateTSA End

Date

TSA Period

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What are you Selling?

• .

15

A Complete Legal EntitySale Date

TSA End Date

TSA Period (if required)

Part of a Legal EntitySale 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

Licencing• Agreement - SAP Contractual Position

• Novation - Divestment Clause

• Transition Timeframe

• Solutions

Security and Controls - Checklist

• SAP Access17

• Non-SAP Applications/Directories

• Assignments of Users

• Hierarchies & Delegated Authorities

• Data Processes

Security and Controls – SAP Access

• Segregation of Users (Grouping)

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• Clarity on organisational restriction mechanisms

• User access restricted by organisational entities

• Detective report to flag exceptions

• Speedy remediation process

Security and Controls – SAP Separation

• Challenge - Divested company wants our SAP system

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• Options - SLO/System export

• Data Security/ Data Handling

• Software licencing

Questions?

20

Divesting BusinessesMeans

Untangling SAP!

Thank You

Gary NiblettBlue Change Limited

Structured Business Changegary.niblett@bluechange.co.uk

07714 934932

Gerald WestSerco plc

gerald.west@serco.com