Estimated reading time: 3 minutes
We’ve spent some time now talking about what an SAP carve-out [Link Part I], as well as some of the nuances that make these types of projects unique [Link Part II]. I think it’s time we dive a bit deeper into the topic and touch on some of the general business scenarios customers may come across during a carve-out project.
It is generally agreed that SAP shops face one of three business scenarios. Please keep reading to understand what these are and when they may or may not make sense to pursue during your project.
Business Scenarios for SAP carve-outs
- Carve-out in SAP clone: This is simply a 1:1 copy of the productive SAP system and results in no functional change. This is by far the least complex of the scenarios, and at times may require zero external assistance as it can be typically executed with experienced in-house basis resources. Perfect solution for small systems in internally driven carve-outs since you don’t have to worry about proprietary or confidential data ending in the wrong hands. Making a full system copy is not always feasible, especially when talking about large databases. You must double the hardware required to run a full copy of a productive SAP system. There is an additional task related to data deletion that can be performed in post using specialised tools such as SAP LT or our very own cbs ET Enterprise Transformer.
- Carve-out in new SAP: This is a move to another ECC, S/4HANA, or a different SAP system with a different configuration. The key here is that data needs to be transformed into new SAP processes or in the event of SAP S/4HANA new data structures and functionality. This is the most common scenario for two-party M&A deals. Here you have two options. You can use the clone approach described above and then resolve conflicting configuration and z-codes to match the target system. You can also selectively carve out the relevant data in scope, transform it on the fly before importing it into the target system or a shell copy. At the end of the day, there is always some configuration and z-code work that needs to be performed before the data is compatible with the target structures.
- Carve-Out in any new ERP: Here, we are dealing with an unknown target ERP system or a non-SAP ERP. This scenario is quite common as well. On the target side, this will be pretty similar to a carve-out in a new SAP. Selection criteria determine with SAP objects, and data need to be carved out, then raw data is extracted into flat files and handed over to the buyer. Note, the last two scenarios apply to master data only using standard SAP LT software. There are no limits on historical transactional data using 3rd party software such as cbs ET.
These are just high level, general insights into the different business scenarios. Interestingly, the second business scenario led to what is now called Selective Data Transition for SAP S/4HANA. We will talk more in detail about this on our final blog of the series in a couple of weeks. Please tune in next week as we jump right into the four technical approaches for SAP carve-outs and weigh the pros and cons of each one.
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