Adonix Grows Roots Against The Odds Part 2: Challenges and User Recommendations

Adonix Grows Roots Against The Odds

Part 2: Challenges and User Recommendations

P.J. Jakovljevic - August 21, 2002

Market Impact Continued

The time has come for Adonix to expand even more internationally. Its experience gained from European organizations, its large installed base, and its recent product development strategy, present a good expansion opportunity to become a significant player for midsize enterprises well outside European stronghold.

Still, although the international revenue has grown much faster than French revenue lately, the most-active region has been Southern Europe (Spain and Portugal), with an increasing success in the US market, which had initially been slower to warm up to Adonix's solution, largely due to the number of incumbent peer solutions that are already present. Nevertheless, for US companies with small domestic and international operations, Adonix can prove to be of interest, as it is already available in five languages (English, French, Italian, Portuguese, and Spanish), and the sales and financial product modules have localized features.

The company has had a number of successful international implementations and support for subsidiaries of larger enterprises outside France, which may help it overcome some prospects' anxiety to deal with a relatively unknown vendor.

Contrary to most peer vendors, which started their ERP applications in the manufacturing space, Adonix first established a strong presence and functionality in the distribution/logistics field. Most current manufacturing-oriented ERP product in the market contrarily still do not innately support automated data collection, although the need to pass data to and from third-party systems has long been present in the market. Having also mastered the idiosyncrasies of French business requirements in distribution, administrative and accounting procedures, the company has remained the local market leader, despite strong competition and onslaught from international ERP vendors.

To complement its initial solution, which focused mainly on finance/accounting and distribution for the lower-end of the mid-market, Adonix has acquired a number of companies during last few years. In 1998, it acquired the software company GSI Transcomm, a US provider of distribution and financial applications called TOLAS, which had offices both in Pittsburgh and Tarrytown, the latter where Adonix has based its expert staffers for the logistics functional areas (e.g., warehousing, transportation, data collection, etc.).

Consequently, Adonix started rewriting its solution in 1997 after the first major acquisition (Prodstar, a French ERP vendor) acquisition and released the first version of Adonix X3 in late 1999. Known as a product development company, Adonix has recently kept on delivering within the X3 versions 1.3 and 1.34 the above-mentioned integrated CRM modules and native Web extensions and. The ILOG's optimization and visualization components were introduced back in the X3 Version 1.2 and can be used to build capabilities for supporting interactive drag-and-drop scheduling, supply chain synchronization, and finite capacity scheduling.

This is Part Two of a two-part note on Adonix. Part One covered recent Adonix announcements and their Market Impact.

Adonix X3

Adonix X3, is an ERP product designed for mid-size companies, with a view towards easy installation, use, maintenance and customization/personalization. Its integrated manufacturing, distribution, CRM and accounting functionality may be a good fit for a wide range of manufacturers and distributors, as it fits configure-to-order (CTO), assemble-to-order (ATO), make-to-stock (MTS) and batch process manufacturing environments. It particularly has an impressive depth and breadth of distribution and order management functionality. Particularly powerful is its advanced pricing functionality that allows companies to create complex customized pricing formula based on a multiplicity of categories (e.g., customer, region, territory, etc.). It is also a workflow-based solution that enables enterprises to model business planning issues through, e.g., a network of tasks, resources, and inventory buffers on which strategies can be applied to optimize the interrelationships.

The company plans to continue to improve and broaden the algorithms to address more industry-specific problems. The product maintains its flexibility via powerful parameterization capabilities the parameters are user-definable, and can be linked to applications or workflows, and can be set at different organizational levels. Another attractive feature that the product offers is its native reporting and business intelligence (BI) capability, as it has built-in support for data marts for financial and logistics analysis by Executive Information System (EIS) module.

Last but not least, Adonix Xtend is the newly released comprehensive storefront creating product, based on open architecture and wide choice of HTML development languages, and with flexible and intuitive storefront capabilities (e.g., catalos, shopping carts, document & forms management, rich statistics, synchronous integration with X3, etc.) as well as administration tools (security, full-text search capabilities, replication, workflow, etc.). The early users at beta sites in France and the United States have reported a great satisfaction and enthusiasm about the product.

The Groupe Abel acquisition should provide Adonix with strong fixed asset management functionality to supplant its own product, which has not been known for its strength in the particular functional area. This could be of interest to its current customer base. On the other hand, Groupe Abel brings a sizable customer base of 2,500, mostly large organizations possibly needing X3's functional modules beyond fixed asset management. Also, Adonix' stronghold in France should be further bolstered with the access to the lucrative local government market through Groupe Abel's subsidiary, LOAN Solutions. Adonix' opportunity to increase its penetration of larger customers, and Abel's opportunity to tap the Adonix' channel and products to expand its territory and functional scope might be a sign of symbiotic relationship.


Still, limited financial resources to adequately fund multiple key strategic initiatives including brand marketing, undeveloped global channel and brand recognition, and formidable competition within the market of Adonix' future expansion focus (particularly the North American market) are the challenges the company has yet to overcome.

The company has another predicament to solve in the conglomeration of Adonix legacy applications over 3,500 customers, many of whom need to upgrade mainframe applications to newer architectures. Although one may expect a substantial recurring revenue stream or a new license opportunity from this large installed base from, e.g., former Prodstar product and older versions of Adonix , and while Adonix is targeting these as well, it is dubious whether the new X3 product can meet the demands of larger corporations among this install base that continue to rely on the legacy applications. The fact that Groupe Abel is publicly traded company while Adonix remains private raises a question mark of how the two entities/cultures will blend in the future. For the time being, Abel will be maintained as a separate operating company with the existing management remaining intact. The products are definitely likely to converge, but short-term strategy will only be to align the sales strategy of both companies, increasing thereby the pipeline of still outstanding integration efforts.

Adonix will have to walk on the tightrope of the obscure balance between functional depth and ease of use, and its focus on mid-market might not fly with these companies, where it will have to overcome the market perception of a "small unknown ERP vendor". Incidentally, the company has to be careful not to spread its development resources too thin trying to maintain its multiple platform product configurations; on one hand, a multi-platform support creates additional opportunity (and R&D liability), but, on the other hand, the trend for the company's target market is towards the Microsoft technology.

Further, X3's functionality across the board, although broad (to include process manufacturing as well) and well balanced, has not been recognized as a differentiator in the market as the company does not exhibit much of a vertical focus except for the consumer goods products (CPG) sector. To that end, Adonix should develop templates, wizards and implementation methodologies to further decrease the time and expense of implementation projects, as well as to vertically incline its product offering.

Also, the company must continue to augment a base of reference accounts from the 500 companies that have purchased X3 so far. A couple dozen sites in the US might still be insufficient to boost brand recognition and make a serious go of the North American market. Internationalization requires significant investment, and Adonix, with its limited R&D funding compared to the bigger players it will likely compete against, still has a burden of beefing up its indirect channel, possibly with some high-profile partnerships to further back up the above-cited notable momentum.

User Recommendations

Adonix' target market, general multi-site and multi-national distribution and manufacturing companies either independent businesses or large autonomous units of global giants with $20 to $300 million-a-year revenue range and up to 100 concurrent users per site, should consider the company's value proposition, bearing in mind other competitive products. Adonix often comes ahead of larger global players in terms of functional fit, pricing, and understanding of the local requirements in the distribution area. Like enterprises in France or Southern Europe (especially Spain, Italy and Portugal) should short-list X3. However, customers outside Adonix' successful geographies may want to do their due diligence and check Adonix' regional support before moving forward.

The industries that would most likely benefit from using its products are discrete and process industries with standard manufacturing and extensive distribution requirements such as CPG, wholesale, retail, chemicals, industrial & commercial machinery, electronic & electric supplies, furniture, rubber & plastics, etc.

Existing users of earlier Adonix product releases should position X3 and Xtend central to their collaborative B2B and B2C e-Business strategies although being informed about competitive products cannot hurt. They should also question the company's future product development strategy, product migration path (upgrade licensing arrangements and ongoing service & support, and/or ramifications for not opting for X3). Non-Adonix users may as well benefit from evaluating X3 and Xtend products for their collaborative needs.

Existing Groupe Abel customers looking to expand well beyond its financial packages into supply chain planning should place X3 on their short list. Conversely, Adonix users with a need for a strong fixed assets management product should consider Abel as a high-priority contender although questioning the level of integration between the products goes without saying.

For very detailed information about Adonix X3 is contained in the ERP Evaluation Center at

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