• This article discusses the story of Arck System and his connection with Lux Software.Then discuss and review the details of the merger and the resulting problems arising from each company sales team with different compensation packages and finally ends up with the conclusion.
*Characters involved in the Arck System:
• Rob Chatterji(Chairman and ceo of Arck)
• Bryan Mynor(EVP for Arck system)
• Evan Hong(CEO of lux software and longtime chief engineer)
• Chris snyder(EVP for lux softwares)
• Sharon esteves(Head of U.S.Sales)
• Lamar snow(Top salesman)
• This system was a medium-sized manufacturer of enterprise servers,strongest network computers used in corporate to manage data.It was developed by a third-party software houses. and cases describe the difficulties confronting a senior vendor manager who determines the sales compensation plan in an enterprise software company.
• The ceo of arck decided to develop the arck’s software business.so he planned to buy a lux software,which is a leading provider of middleware.More companies needed this software because it acts as an intermediary between different software application like exchange data.
• After the acquisition, the evp of sales chris snyder announced that he will be leaving the lux sales.consequently,mynor taking the charge of lux sales force.Arck salespeople planned to target the CIO or CTO.meanwhile, the lux salespeople focused on the Finance or administration arms of corporations.But,mynor planned to keep both the teams separate until figure out to merge them.
• Subsequent to hard negotiation with synder,mynor was confident on that both the system used similar approaches to the sales management.however synder report about the lux compensation plan,he was not grief about the compensation because his main aim is to create a close relationship with esteves.
• Until mynor start to analyze the packages he didn’t realize that managing the lux sales team was more hard because this one is totally different from the arck system.The lux team included accelerators which is essentially to reward the best performers
• After the negotiations with esteves,mynor called esteves assistant to get a previous year salesperson performance list.after seeing that,mynor was very worried about how lux softly manages the sellers. He thinking to remove the lux software accelators.but he decide to keep this for at least two quarters. After that he again sat down to criticize the sales of lux software,it was strong.
• However,mynor gets an some points from the arck’s finance department.he found that discounts on first week and last week are too high compared to other weeks.He was amazed that “why do discounts trail a U-shape?
• After a serious review on this,he clearly gets why these discount spikes are happening.he decided to promote management supervision on deals with big discounts.To increase supervision on discounts,he decrease the proposed discount level at which managers would want to accordance a deal.so he made some changes to obtain the level.
• Finally,He believed that big discounts would reduce the amount of income and arck/lux softwares leaves due to widespread discounting.