What is a carve-out and why is it important?
By Emanuel Böminghaus, Legacy Systems Expert and Managing Director, AvenDATA
By Emanuel Böminghaus
Legacy Systems Expert and
Managing Director, AvenDATA
Managing Director, AvenDATA
Why Carve-Outs can define success or failure and what really matters in practice
A Carve-Out refers to the separation of a business unit, subsidiary, or selected data sets from the existing corporate structure. The reasons vary, from strategic realignment to cost reduction to preparing for a sale. The real challenge lies in the technical execution, especially when multiple systems are involved or when strict data protection regulations such as GDPR must be met.
Three Common Types of Carve-Outs
1. Corporate Carve-Out
This involves separating an organizational unit such as a division or subsidiary. The goal is often to focus on the core business or to allow the new entity to grow independently. Legal and operational separation requires precise planning and clearly defined responsibilities.
2. Data Carve-Out
A data Carve-Out focuses on the selective extraction of specific datasets. This may be necessary to meet regulatory requirements, replace an old system, or protect sensitive information. Data integrity, anonymization, and complete traceability are especially critical here.
3. Legacy System Carve-Out
When legacy applications are decommissioned, long-term archiving is often required by law. A Carve-Out ensures that all relevant data is preserved in a compliant and auditable way without having to continue running outdated systems. At the same time, it opens the door for modern IT solutions.
Key questions before starting a project
- Which data or business units are affected?
- Which systems contain this data?
- Are there legal retention requirements or contractual deadlines that must be met?
- Do personal data records need to be anonymized or deleted?
- How can technical dependencies and interfaces be cleanly separated?
- What is the target environment an archive, a new system, or preparation for a sale?
Typical steps in a Carve-Out
- Analysis: Identify affected business units and system structures
- Project Planning: Define timeline, milestones, and resources
- Test Run: Validate technical feasibility
- Execution: Extract and separate the relevant data
- Quality Assurance: Validate results and reconcile discrepancies
- Documentation: Record every step to ensure full auditability
Benefits of a well planned Carve-Out
- Stronger focus on the core business
- Increased agility and efficiency
- Smarter use of resources
- Reduction of legacy IT burdens
- Compliance with legal and contractual requirements
- Greater flexibility for growth or divestiture
Why Carve-Outs remain strategically important
In today’s fast changing markets, shaped by rapid technological shifts and growing regulatory demands, Carve-Outs are no longer rare exceptions. They have become a standard tool of modern corporate strategy, whether for streamlining operations, repositioning the business, or mitigating risks. What matters most is not only the strategic intent, but also flawless technical execution.
Conclusion
A Carve-Out is never a standard project. Every separation comes with its own unique requirements from data structures and compliance obligations to the complexity of the IT landscape. Success depends on early planning, clearly defined goals, and the right expertise.
AvenDATA as your partner
With more than 15 years of experience in data archiving and Carve-Outs, AvenDATA supports companies worldwide in executing even the most complex projects. Backed by proven processes, certified software, and an international team of experts, we deliver efficiency and compliance even under tight deadlines.
Planning a Carve-Out?