If new survey data from ABI Research is a good indicator—and I believe it is—then the biggest barrier to industrywide radio frequency identification (RFID) success is not due to technological limitations, of which there have been many over the years.
No, the most significant impediment is organizations’ paranoid and competitive reluctance to share best practices with one another: To not allow business partners, sourcing vendors or even industry competitors to analyze and examine those hard-earned and expensive lessons learned with a technology solution that’s been as full of potential as it has been full of frustration.
That’s a depressing yet unsurprising thought. Why on earth would Wal-Mart share its RFID lessons with, say, Target or Sears or Best Buy? (See CIO‘s articles in 2004, 2005, 2006 and 2007 for more on Wal-Mart’s efforts.)
This year, ABI Research’s annual online end-user survey asked 185 organizations about their RFID deployment experiences regarding closed- and open-loop RFID systems across a variety of applications, and at various stages or implementation: trials, rollouts and fully deployed systems.
The survey noted the dire ramifications of companies’ reluctance to share what they have learned. “It’s tough, and [the reluctance] has been holding parts of the industry back,” notes ABI practice director Michael Liard, in a survey report. “But somebody who’s getting great results with RFID is often understandably wary of letting competitors know how much more competitive it is making them.”
Liard asserts that this corporate reluctance to share RFID learnings has, in turn, prevented other companies interested in RFID deployments from being able to formulate useful return on investment (ROI) models and set business goals to be achieved by the project.
In other words, prospective RFID companies don’t have a decent understanding of how much an RFID deployment will cost or how long it’ll take, and therefore won’t bother trying.
The ABI report notes that a “substantial majority” of respondents said 12 to 24 months was a reasonable expectation in which to achieve an ROI, which in this economy is simply too much to ask. “In times of economic slowdown,” Liard notes, “a quick positive return on investment is especially important to potential RFID users.”
But here’s what I found most startling and troubling: Nearly 20 percent of respondents didn’t know what their ROI timetable would be. Can you imagine asking for new or continued corporate funding for a tech project—say, an ERP, CRM, BI or supply chain enterprise app—on which you had no reasonable estimate for return on the investment? During a recession?
ABI’s Liard has this sound piece of advice to all those toiling away in RFID-related organizations: “If we want this market to move forward in a recession, we need to start talking about these things as proactively as we can.”