An Operation Without Risk: Carve-out

Carve-outs - the sale or spin-off of business units and subsidiaries - have long been a standard tool of agile corporate strategies, just like their opposite, mergers and acquisitions. But what is done at management level with contracts and signatures causes headaches for IT teams at buyers and sellers.

The latter want and must ensure that the former can only access the data and documents relevant to them and no more. Conversely, buyers need access to all relevant data of the purchased company or business unit for business and legal reasons. There are the authorities, who demand that financial data and documents are stored unchanged and unalterable for many years and can be accessed at any time by external auditors and the internal audit department.

And then there are the managers and users who need to access legacy data for their daily work, analyses and planning. This also applies if the buyers use different systems than the sellers, in whose applications the data and documents were originally generated. Consequently, after the sale, it is not only a question of legally compliant storage of the legacy data and access to it, but also of ease of use. From the user's point of view, everything must look as it did when they were still working with the original system in which they created the data and documents.

This was also the case at Mercedes Greek and Star Automotive Hellas, as Efstathios Skaris, Head of IT at the former subsidiary of Mercedes-Benz Hellas, explains: "We were looking for a solution that was built from the ground up to archive data from SAP and at the same time offer end users the look and feel of SAP. Only then can they easily work with the application's user interface, search and export the data and provide the information in the same format they are familiar with." On February 1, 2023, the Greek dealership, including the service center for commercial Mercedes-Benz vehicles, became the property of the Swiss company Emil Frey AG. It was agreed that the transfer of legacy information would be completed by the end of the same year.

The project was led by Efstathios Skaris' team, even though he had to adhere to Emil Frey's specifications and let the parent company make the final decision on the bids received. He selected DXC as the service provider for the project. The partner of the Swiss company Data Migration International, the provider of the platform for company-wide information management, JiVS IMP. His offer provided for the use of JiVS IMP to transfer the data and information from the FI module of the SAP system previously used by Mercedes-Benz to Emil Frey's data center in Switzerland. The go-ahead for the data transfer to JiVS IMP was given at the end of September 2023.

Star Automotive Hellas was already able to carry out the first tests with the transferred data in the second half of October. This was made possible by the smooth cooperation between the various IT teams. The JiVS IMP plug-in was implemented at the Mercedes-Benz data center in record time. The platform already comes with thousands of SAP business objects as standard, meaning that the relevant data can be filtered out of the original system and transferred to the platform without any effort or risk.

Flat learning curve

At the same time as checking the transferred data, Star Automotive began training the financial accounting department on JiVS IMP. "The learning curve with the environment was very flat," emphasizes Efstathios Skaris. At the end of January 2024, the time had come. Since then, the accounting users have been working with the legacy data on JiVS IMP after access to the Mercedes-Benz SAP system was closed. That was four months after the start of the project - a very short period of time for a carve-out project. The fact that the originally planned transition period was exceeded by one month was due to the fact that the users were busy with the annual financial statements.

Future security instead of risk

The most important goal of eliminating the legal risks for Star Automotive Hellas during tax audits was achieved in full, as Efstathios Skaris confirms: "We knew that there was a high risk and that the matter was time-critical. The cost versus risk containment trade-off justified the investment made." In addition to eliminating the risk, Star Automotive benefits from two other key advantages. Firstly, the company uses the cloud version of JiVS IMP for the long-term storage of legacy data, a more cost-effective solution than continuing to operate the platform in its own data center after the transition phase. JiVS IMP also fulfills another requirement: the solution should not only be usable for the carve-out project. Rather, it should also be usable for possible acquisitions in the future. With JiVS IMP, the company is perfectly prepared for this.

jivs.com