Sets the foundation for temporary parent-to-carve-out support by clarifying why TSAs are needed—operational continuity, risk mitigation, cost transparency, and knowledge transfer—and by establishing five guiding principles: limit scope to essentials, fix hard sunset dates, use transparent pricing with auditable drivers, embed measurable SLAs, and appoint an exit owner for every service. It then breaks a gold-standard TSA into modular components: a master agreement covering legal boilerplate, individual service schedules detailing scope, performance targets, pricing, security, and exit criteria, a governance schedule that defines roles, cadence, and escalation paths, and a change-control protocol to prevent scope creep. Typical services (IT hosting, payroll, finance platforms, supply-chain tools, compliance reporting) and key roles (carve-out TSA lead, parent service owner, TSA PMO, steering committee) illustrate how to assign accountability from day one, while clear success indicators—stable Day 1 performance, dispute-free invoicing, and on-schedule exits—ensure TSAs protect value without becoming long-term crutches.
Why TSAs Exist
- Operational continuity: Keep mission-critical processes (e.g., payroll, ERP hosting) running on Day 1.
- Risk mitigation: Minimise customer, regulatory, and financial disruption while permanent solutions come online.
- Knowledge transfer: Provide structured hand-off of documentation and tacit know-how from parent staff to carve-out teams.
- Cost control: Avoid last-minute, premium-priced stand-ins by planning a transparent, time-boxed bridge.
Guiding Principles
- Minimal, essential scope only—no “nice-to-haves.”
- Fixed sunset dates with clear exit milestones.
- Cost-plus or unit-rate pricing with auditable true-ups.
- Measurable SLAs backed by credits or penalties.
- Named exit owners and an enforced governance cadence.
Standard TSA Architecture
- Master Agreement – Legal boilerplate: liability, confidentiality, dispute resolution, governing law.
- Service Schedules – One per service; each details scope, SLAs, pricing, security, term, and exit criteria.
- Governance Schedule – Roles, meeting cadence, escalation ladder, and reporting templates.
- Change-Control Protocol – Step-by-step process for scope or pricing amendments.
- Annexes – Contact lists, data-flow diagrams, compliance certificates.
Typical Services Covered
- IT hosting, network connectivity, help desk, security monitoring.
- Finance platforms (AP, AR, treasury, close) and reporting support.
- HR payroll processing, benefits administration, HRIS access.
- Supply-chain planning tools, shared procurement portals, logistics visibility.
- Regulatory or industry-specific filings the carve-out cannot yet produce alone.
Key Roles
- Carve-out TSA Lead: Owns day-to-day service receipt and exit readiness.
- Parent Service Owner: Delivers service, manages performance, and hands off knowledge.
- TSA PMO: Consolidates metrics, tracks costs, and drives escalations.
- Steering Committee: Approves scope changes, fee adjustments, extensions, and dispute resolutions.
Success Metrics
- All services achieve agreed SLAs from Day 1 onward.
- Monthly invoices reconcile to measured usage without dispute.
- Exit readiness ≥ 90 % complete by target dates; no unplanned extensions.
- Zero critical incidents traceable to TSA failures.
Defining clear purpose, tight scope, and disciplined governance at the outset ensures TSAs serve as a short, controlled bridge—rather than a costly, open-ended crutch—on the carve-out’s journey to full independence.
