Managing IT in a Business Unit Divestiture

The divestiture of a business unit — also known as a “carve-out” — is a common strategy used by multi-business organizations to adjust their business portfolios in response to a change in business strategy, and legal or regulatory pressures. In a typical divestiture, systems that were integrated in the past to deliver seamless and efficient IT operations must be pulled apart under demanding time and regulatory compliance constraints. Yet, as with many merger and acquisition projects, CIOs involved in carve-out projects that include critical dependencies on IT systems may be excluded from the due-diligence process. This article presents a case study of a carve-out project to divest a business unit within a global multi-business company. In addition to the lessons learned about unique aspects of managing IT for a business unit divestiture, this case sheds light on how CIOs can create divestiture-ready IT environments and thus better prepare their organizations for IT carve-out projects