Sweeping technology changes have made divestitures not only cornerstones of enterprise growth but also as a strategy for separation of non-performing assets. The success of a divestiture or spin-off hinges on minimal or no interruption in day-to-day businesses of the current and the new company, stable IT operations for both businesses after deal closure, the security of confidential information and IP, adherence to quality standards and regulatory compliance, and sensitivity to cultural diversity. A well thought out, comprehensive Discovery to Decommission (D2D) enterprise cloud strategy for divestiture can enable the existing company to exit from the transition service agreement (TSA) faster.
Process changes or new processes will be required for the “NewCompany” to operate independent of the parent company. Systems may need to be completely overhauled or modified to enable these process changes. A typical IT carve-out strategy includes five workstreams:
• Program management, governance, IT architecture, and IT process
• Application and related data
• Testing, validation, and regulatory strategy
• Go Live execution and stabilization
Cloud implementation brings in many opportunities such as:
Efficiency: Optimum utilization of resources where IT resource provisioning is in line with business requirement. This has a direct impact on IT cost. Also with cloud, the shift from capex to opex model significantly improves cash flow.
Expedited Transition Service Agreement (TSA) closure: Cloud offers reduced cycle time to set up IT systems to support new hived off businesses. This is because only logical separation is required as against setting up an entire infrastructure from scratch. Such a logical separation can be achieved quickly with an enterprise cloud that is in a “ready to be consumed” stage.
A mirrored governance structure between the enterprise and the cloud service provider is recommended for cloud migration. Migration from an on-premise data center can happen to either a private cloud or a public cloud as appropriate. Key considerations and drivers for this choice of the cloud is based on cost, latency, automation, regulations, and governance.
A fully dedicated core assessment team, which will consider such drivers and decide on the type of cloud, should span offshore, near-shore, and onshore locations. It should comprise of an engagement manager for overall management and governance, technology and functional domain consultants for actual migration, supported by a panel of experts playing critical advisory roles.
A three-tier governance structure is recommended for progressive review, relationship management, escalation management, health check, and strategic planning. The governance structure includes an executive steering committee, program steering committee, and program management team comprising both the enterprise’s and the service provider’s teams mirroring the roles on both sides. With such a mirrored governance team in place, any shortcomings, which may delay the separation can be negated. While cloud resolves the IT resource crunch issue, a well-defined governance structure ensures that implementation is seamless. For successful and quick migration, it is important to have visibility and control on both aspects.
Business continuity thinking
To ensure business continuity and availability in the event of an incident during divestiture, it is important to plan for disaster recovery (DR). As the earlier DR environment will no longer be relevant after spin-off, a separate DR environment has to be set up. Certain critical businesses such as BFSI require DR from “Zero Day” before they start their operations. Business continuity management during divestiture should include data replication monitoring, system availability monitoring, DR run book creation/modification, and mock and Live DR drill planning and execution as governed by the enterprise’s DR policy. Again a “ready to be consumed” cloud platform can considerably reduce turnaround time to build scalable DR solutions.
While a well thought out DR strategy helps in achieving better business continuity, a DR site can be leveraged to speed up divesture activity as well. It can serve as a test bed to prepare the final environment for the divested company before proceeding with final cut over. While leveraging DR site for such activity, care should be taken that existing DR setup is not disturbed.
Simultaneous upgrade, application remediation, and migration
A comprehensive D2D (Discovery to Decommission) process for executing migrations can ensure systematic planning and perfection to minimize any impact to business. A wholistic migration program must take into account migration of existing workload images to cloud, application rebuild on the cloud platform, legacy application replacement with SaaS, and optimization of the global application portfolio of an enterprise to minimize redundancy. This helps enterprises migrate their spun off business quickly, efficiently, and with ease. It is not only important that data is migrated to new system but also that data is decommissioned from previous system where it is no longer supposed to reside. With this structured approach there is minimal chance of system roll back and rework.
A robust IT carve out strategy for divestitures sometimes also include a centralized cloud command center by the enabling partner to manage incidents and emergency calls. To find out how such a D2D cloud partner can help expedite your divestiture agenda, connect with us at CloudInfra.Marketing@tcs.com.
About the author(s)
Satishchandra Doreswamy is Vice President & Global Head, Cloud Infrastructure, at Tata Consultancy Services (TCS). In this role, Satish leads the team in building a sustainable and scalable enterprise cloud business to help TCS customers navigate their hybrid cloud transformation journey.
Satish leads a strong team of cloud infrastructure experts to address and stay ahead of the rising market demand, advising them on the best ways to help customers achieve digital transformation success through cloud enablement. Satish is recognized for helping the team gain significant market share and mind share globally, all through leveraging TCS’ contextual knowledge, gained through customer engagements. Under his leadership, the team expanded its global presence with 14 availability zones (cloud centers).
Satish has about 29 years of experience, providing leadership across strategy, sales, delivery operations, business management, and mergers & acquisitions. Satish has been with TCS for more than 25 years, working in infrastructure services, banking, and financial services and BPO operations.
He currently resides in Bangalore, India with his wife and two children. Outside of work, Satish is an avid nature and wildlife photographer and spends his leisure time in nature trails and participating in philanthropic activities.