The one constant in life is change, and that’s especially true in business. In an evolving business landscape, organisations frequently need to restructure, revamp and transform themselves.

One such transformation is a carve-out. Businesses often find themselves needing to establish new independent entities. That can be through acquisitions, mergers, or divestitures. These carve-outs present significant IT challenges that need to be navigated carefully.

Mirus’ Pre-Sales Technical Team Leader in Professional Services, Chris Russell has supported many businesses through a carve-out. He shares his expert insights into navigating these, often complex, business separation processes.

What do we mean by business carve-out?

First things first, let’s clarify what a carve-out means. It’s a strategic business move where a company splits off part of its operations – a specific segment, business unit or subsidiary.

Carve-outs tend to occur in two main scenarios:
1. Divestitures: The parent company sells or spins off a part of its business.
2. Acquisitions: A larger organisation acquires a smaller entity and integrates it into its structure.

Chris explains the part that Mirus plays in the process, “Typically, we’ll be setting up a new company from the ground up. Then, receiving the data and making sure that all works nicely for the new company.”

This means creating a separate IT environment for the new company and ensuring a seamless transition of data, applications, users, and systems. Importantly, the new IT set-up needs to be secure, efficient and compliant.

What to consider from an IT perspective

“Every carve-out is unique,” points out Chris. Clear communication and collaboration with the business is essential. He continues, “We’ll consult with them to find out what they want to achieve. They might have specific applications they’re using. They might have specific standards that they want to comply with.” All of this informs the migration process. It’s crucial to define and consider what’s being brought across to the new business in terms of users, devices and data.

We could be building up the environment from scratch, a green field setup. If the new business is getting all new devices with a new IT infrastructure and cloud services, it’s easier than migrating from the parent company to the new business.

We find out how devices will be used and by whom. For example, you need a more powerful laptop to work on complex financial spreadsheets or creative graphics, than if your focus is on office admin using email and Word predominantly.

Another scenario is when you’re taking some of the data from the parent company to the new business. We work with both the parent company’s IT team and the new business. If the new organisation is allowed to access all the proprietary data on the parent company’s tenant, we can lead that migration process.

Often, we’re not allowed to access the parent company’s data directly. In that case, we upskill and train their in-house IT team to do the migration.

“We’ll either procure the licensing and provide training for them to run the migration, or we can provide hands on support for them to do it, and they just manage all the access from the source,” explains Chris.

Key challenges in business carve-outs

Business carve-outs involve a range of IT challenges, including:
• Data migration: Transferring data from the parent company to the new entity without data loss or security breaches.
• Application setup: Configuring critical business applications like Microsoft 365, email systems, and other productivity tools.
• Security compliance: Ensuring the new entity meets industry-specific data security standards.
• User management: Setting up new user accounts, devices and access controls.

Top expert tips to simplify the process

If there’s one learning that Chris has taken from years of business migrations, it’s the importance of being prepared.

“It’s advanced planning and testing. That’s the biggest thing… The IT function is one part of it, but the carve-out is going to have hundreds of other functions inevitably happen as well. So really, we’re one small part of the chain, but everyone needs IT,” says Chris.

We take the commercial carve out day (day 0) which is when the businesses separate. We work backwards from there to determine the project timeline. It could be six to 12 months away, but the more notice, the better! There’s a lot to do, planning everything and getting all aspects agreed before we start pilot migrations, user testing and so on. If short notice is given, this increases risk as we don’t have the time to plan and test.

How do we minimise risk?

“That’s why we do the pilot migrations. We stick with Microsoft because it’s an established platform. We use established tool sets so that we can minimise the risks of data corruption and failed migrations. We run test migrations and do testing once we’ve configured everything. We’ve got an established platform. We know that we’re migrating into a clean setup that works. We’ve proven entry testing before we do the critical cut over,” assures Chris.

Security is always imperative. Sometimes this will involve an External SOC (Security Operations Centre) and we will work together with companies to decide who’s responsible for each aspect of the security solution. “We recommend starting with a solid baseline using a number of platforms for a layered security approach – including security tools from M365, Huntress and Mimecast, for example,” explains Chris.

How Mirus IT supports businesses during carve-outs

1. Comprehensive IT setup
We establish a complete IT environment for the new business, typically using Microsoft 365 for secure and scalable productivity. This includes setting up email, OneDrive, SharePoint, and device management.

2. Secure data migration
We work with the parent company to transfer data securely to the new entity. Depending on access permissions, we can manage the migration directly or guide the parent company’s IT team through the process.

3. Tailored solutions
Every carve-out and business is different. With experience working with organisations from investment banking to renewable energy or legal services, we can navigate industry-specific IT requirements. That includes data residency, compliance and security protocols.

4. Advanced security measures
We employ best-in-class security practices, including Microsoft Intune, Defender, and Cloud Protection. This ensures the new entity’s IT infrastructure is secure from day one.

5. Flexible support offering
From providing full migration management to guiding in-house IT teams, we offer flexible support packages tailored to your needs.
Our extensive experience and established processes ensure a smooth and secure carve-out process. With a focus on planning, testing, and proactive support, we work with you to minimise risks and ensures business continuity.

Ready to navigate your carve-out with confidence? Contact Mirus IT today and let us guide you through a frictionless transition.