Grows Roots Against The Odds
- August 21, 2002
Part 2: Challenges and User Recommendations
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.
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.
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
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.
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.).
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.
is Part Two of a two-part note on Adonix. Part One covered recent Adonix
announcements and their Market Impact.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
very detailed information about Adonix X3 is contained in the ERP
Evaluation Center at http://webtess2.technologyevaluation.com