Technology Portfolio Management (TPM) Best Practices

Overview

Technology portfolio separation for divestitures is the mirror image of technology portfolio integration for acquisitions, and it is in many ways more technically complex. Integration combines two portfolios that were governed independently into one; separation must divide a portfolio that was governed as a unified whole into two independently viable technology estates. The complexity arises from the deep integration between technologies, applications, data, and infrastructure that organizations develop over time: shared databases, shared middleware platforms, shared network infrastructure, shared identity management systems, and shared cloud accounts that serve both the retained organization and the divested entity but that must eventually be separated cleanly. Technology portfolio separation that is not planned and governed rigorously produces persistent entanglement between the retained and divested organizations that creates ongoing operational, security, and legal risk for both.

Best Practice

Plan technology portfolio separation as a formal governance program initiated as early as possible in the divestiture planning process, ideally before deal signing, to maximize the planning window available for a separation that will require significant technical work. The separation program should address: inventory partition, identifying every technology in the Technologies Inventory family and classifying it as retained, divested, or shared, with shared technologies requiring a defined strategy for duplication, migration to one entity, or managed commercial separation; application and data partition, identifying every application and data asset that serves both the retained and divested organizations and defining the separation approach for each; infrastructure separation, planning the network, identity, and cloud account separation required to produce two independently operable technology estates; and the transition services agreement scope, defining the technology services that the retained organization will provide to the divested entity during the separation period and the timeline for terminating each service as the divested entity achieves independence.

Benefit(s)

Rigorous technology portfolio separation planning produces clean, timely separation that eliminates the persistent entanglement that under-planned divestitures consistently create. Security isolation is achieved because shared identity and network infrastructure is separated on a defined timeline. Contractual separation is achieved because shared license agreements are transitioned to independent agreements for each entity on a defined schedule. And operational independence is achieved because the divested entity has its own technology estate with its own governance framework rather than remaining operationally dependent on the retained organization’s technology infrastructure beyond the planned transition period.