Issue #169 | Nov. 7, 2008 | by Michael Dortch

RFID is already delivering significant business benefits to the supply chains of multiple types and sizes of businesses. However, the business value of RFID and related technologies can extend more deeply into, and eventually far beyond, those supply chains. A new survey and upcoming study from Aberdeen Group seeks your help in identifying new opportunities for RFID business value.

In our June 2008 Benchmark Study, "RFID and IT Infrastructure: Maximizing Business Value," we surveyed more than 135 businesses. IT and RFID decision-makers were asked about the top business pressures driving RFID and IT infrastructure management efforts at their organizations. The top drivers cited were easing integration of RFID data with key applications (38% of respondents), maximizing the business value of that data (31%), and maximizing the availability of business-critical information (29%), as shown in Figure 1 below.

Figure 1: Top Pressures Driving Integration of RFID and IT Infrastructure Management


While new technologies and integrations are making traditional "track-and-trace" and "slap-and-ship" applications more powerful and capable, RFID deployments are moving far beyond these arenas. When asked what items they were tagging or planning to tag with RFID, 43% of respondents to our June study cited IT assets, ahead of manufacturing work in process, or WIP (35%) and inventory (30%). In addition, fleet vehicles were cited by as many respondents as pallets before shipment (25% each). (See Figure 2 below.)

Figure 2: What Companies are Tagging and Planning to Tag with RFID



While many initial RFID deployments were undertaken largely to comply with mandates or regulations, Aberdeen believes the predominant business pressure driving RFID deployments today is to increase competitiveness and business responsiveness. It is also the key pressure driving efforts to identify other opportunities to leverage RFID. To respond to this pressure, companies are seeking to identify such opportunities, and to integrate RFID solutions and RFID-generated data with key business-critical applications and infrastructure elements.

From the end user’s perspective, the key benefits are the opportunity to increase competitive agility and the ROI of RFID investments, achieving the following advantages:
• Improved "real-time" and "near-real-time" competitive flexibility and responsiveness, enabled by RFID-generated data
• Improved business analytics, intelligence and processes
• Extension of RFID-enabled business benefits to embrace more business functions and /or technologies
• Improved compliance with regulations and industry mandates
• Greater alignment of RFID and IT infrastructure investments with business goals

In the shorter term, growing numbers of enterprises are moving RFID from the pallet to the case, and even to individual items. In the longer term, enterprises are exploring RFID and other sensor-based technologies for tasks ranging from inventory and fleet management and security to tracking the movement of IT assets and even people. Meanwhile, the explosion of data created by growing use of RFID and other sensor-based tools is creating significant IT infrastructure and data quality issues.

An Invitation
Aberdeen is now conducting a new survey focused on RFID’s business value beyond traditional supply chain implementations. A new study based on the survey, scheduled for publication at the end of November, will attempt to identify the top areas beyond supply chains in which users are investing and planning to invest in RFID. It will also offer specific analysis and recommendations intended to help users to maximize the business value of those investments.

Aberdeen research will test whether companies are succeeding in their efforts to achieve and maximize ROI of their RFID investments, and identify how those companies that are succeeding are doing so. Aberdeen expects its research to show that to leverage RFID in ways that increase both its business value and overall competitive agility, companies must blend strategic actions, effective policies and processes and appropriate technologies to:
• Fully leverage all currently available RFID-generated data
• Identify opportunities to enhance the business value and ROI of RFID investments through new and expanded deployments
• Improve business analytics and intelligence for benefits such as greater cross-sell and up-sell
• Improve compliance with regulations and industry mandates, and deliver higher-level business value from initiatives initially driven by compliance goals (in areas such as customer care, patient safety and recall management, for example)
• Achieve more comprehensive business process and IT infrastructure management and optimization

All survey respondents will receive both a copy of the new study when it is completed, and access to additional complimentary Aberdeen research immediately upon completion of the survey. RFID Switchboard readers are invited to take the survey today, at RFID Switchboard.

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Michael Dortch is a Senior Analyst and leader of Aberdeen Group’s Enabling Technologies & Information Management practice. (michael.dortch@aberdeen.com ) For more information about their June 2008 Benchmark Study, check: “RFID and IT Infrastructures: Maximizing Business Value.”