Case 3

ARCK Systems
 • Arck Systems was a medium sized manufacture r of enterprise servers
• The software market is growing more quickly than the hardware market
• So Arck Systems decided to acquire Lux Software
• Lux Software Inc was the leading provider of middleware
• Rob Chatterji, CEO of Arck, decided to acquire Lux Software
Introduction • Arck’s EVP of Sales, Bryan Mynor would now manage both Lux’s and
Arck’s current sales teams as separate entities
• Snyder while leaving the company took most of the sales representatives
along with them.
• To retain other employees, they had proposed bonus.
• They agreed to keep the separate sales force for both the companies
 Reasons for Arck Software gross margin

system Merger Enterprise software

market growing quickly
doubled hardware

with Lux Company Help better integrated Help obtain a greater amount
hardware to the software of enterprise knowledge and
application information to the Industry
 • Merging management styles between lux and Arck
• Targeting different decision makers
• Competitive environment
Issues • Differences in compensation plans at Arck and Lux
• Productivity level did not match with the payment level.
• Poor employee retention
 Conduct a job analysis for both hardware sales and software sales

Conduct a job evaluation through the point method considering

Recommend
various job factors and sub factors.

ation
Recommendation Hardware sales Software sales

Technically- oriented Soft sales - Relationship oriented

Target sales - CIO/CTO, mainly focused on Target sales - Finance executives or admin
server specification. people. Their concerns were value creation on
integration of software.

Customers used Arck’s servers to run their Customers use Lux’s software applications that
enterprise software applications run on servers
  Plan the accelerators only for the half-yearly basis and
not quarterly.
 Concentrating on retaining the star performers in the
company and increasing incentives accordingly.
 Treat Lux’s salespersons as a different entity.
Recommendation  Introduce a new EVP for Lux software’s sales
Cont. department.
 Develop a system to merge both sales teams without
losing the talent in the long run.
 Re-structure compensation plan - Check with the
competitors to plan an compensation and incentives
approach.
 Importance of having a
structured compensation plan

Learnings Importance of teamwork and

collaboration.

Importance of retaining
valuable employees.
thank You