Data Carve-Out / Carve-In: Challenges and Strategies for CIOs

Merger, acquisition, and divestiture operations are multiplying, each bringing a major challenge: the transformation of information systems. In this context, carve-out (separation) or carve-in (integration) operations become a balancing act: transforming the existing landscape without compromising continuity, synergies, or cost control. For CIOs, a decisive question remains: how should information systems be transformed to guarantee operational continuity, synergies, and cost management?

Solutions are numerous, both on the application side and within infrastructure services. To move forward, a plan must be defined to develop a strategy by validating a set of objectives, constraints, and working principles. This framework will guide decisions and the definition of the roadmap.

We are voluntarily focusing on the data dimension of the information system (IS, IT, and organization), setting aside other components (functional, infrastructure).

Two Worlds to Align: Business and IT

To quickly develop a separation or integration plan, we categorize data components into two groups:

Business Component Group

Master Data: Key, stable data with low variation.
Data Models: Business semantics, structures, and analysis axes.
Data Use Cases: The portfolio of uses leveraging the data.
Data Organization: Governance, security, compliance, and business accountability.

IS-IT Component Group

Data Sources: Applications feeding or using the data.
Data Architecture: Services, tools, and programs supporting the data.
Data Delivery Model: Teams and operating modes for delivering datasets to use cases.

For each group, the CIO must define a strategy tailored to strategic and operational objectives as well as identified constraints.

6 Strategic Objectives as a "Compass"

Ensure continuity of operations, their management, and their steering.
Optimize or reduce TSA (Transition Service Agreement) costs, which often become heavy if the transition drags on.
Converge toward the target Business and IS-IT models whenever feasible.
Evaluate necessary transformations or improvements and determine their ROI.
Define, structure, and plan the final target and its implementation.
Ensure the attainment of targeted synergies.

When developing the target and the action plan for its implementation, we seek the "best balance" between four levels of performance:

This balance can be adjusted over time: a simplification project completed earlier than expected might eliminate the need for a future harmonization project that is no longer relevant.

Integration Often Starts… with Customer Data

Core data constitutes a business component with a high level of criticality: a Customer Master File, for example, directly determines the exploitation of commercial synergies.

When two customer data models coexist—that of the acquiring company and that of the acquired company—with several non-standardized or low-quality repositories, the required work is significant.

On a strategic level, the priority is clear: commercial reorganization will only be effective if the customer data is harmonized and shared. This is the prerequisite for rapid value creation. Achieving this result is therefore held as a priority.

On a technological level, the simplest solution is to implement a Master Data Management (MDM) tool, potentially as a transitional measure. It becomes the "single point of truth" to which existing applications subscribe, thus avoiding heavy and immediate transformations of their data models.

Focus on Usage, Not Systems

However, simply merging databases lacks business coherence. The most effective tactic is to:

Precisely define the processes and business needs that will leverage the customer data.
Structure the data model based on these specific use cases.
Build migration programs to upgrade the MDM with a target database.
Subscribe all consuming applications to this consolidated repository.
Launch the new commercial organization, now supported by harmonized data.

Thus our action plan profile will be as follows:

A simplification step—such as rationalizing certain consuming applications—can occur later. It appears less a priority: the essential goal is that, thanks to the transformation of the customer master file, commercial synergies are activated quickly.

The case of the customer repository is just one example. The same logic must apply to all data components. Beyond technology, the challenge for the CIO is to build a common data vision capable of weathering organizational changes and sustaining long-term performance.

Jean-Bernard Guidt - Partner Change & Data Strategy