| RFID - RFID Return on Investment (ROI) |
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| A Long, Hard Look at RFID ROI |
| Today everyone who writes about RFID analyzes the same question:
"Where Is the return on investment with RFID?" The answer is quite simple. No technology by itself
delivers any ROI without the hard, in-the-trenches work required to discover the specific-to-your-company
applications that could be improved and then prioritized based on the amount of business pain they cause.
This type of investigation should provide a detailed map that management can use to allocate resources based
on the best ROI options. |
| Many times, even if they undertake this challenge, companies have
difficulty seeing the possibilities for doing a task in a new way. It is a normal part of the human
condition that any significant change actually reduces efficiency at first. This is commonly known as
the learning curve. The new methods are unfamiliar, and people will make more mistakes when they get
out of their normal routine. The act of forcing changes to established procedures, however, somehow
brings out creativity in every company's greatest asset: its employees. |
| This may sound like so much philosophy. In many ways it is.
Businesses that manage to rise above the rest are documented and written about every day. |
| Then again, the same was true of bar coding. Bar coding was once called
a “disruptive technology.” But if we look back and find the “barcode mandates” implemented
in the early 1970s, we could take many of the statements and predictions of that time and put them into our
presentations about RFID deployments today with no one else the wiser. This is very instructive because bar
coding has achieved the ubiquity that was predicted for it. It is not a big story today when a company invests
in a barcode infrastructure project. |
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Why is Wal-Mart - the biggest retailer in the world - convinced that this
thing called RFID can produce dramatic cost savings? |
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What business processes is it trying to improve? |
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Could my company benefit if we focused on improving the same processes - with or without RFID? |
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| The Wal-Mart motto is “Always the lowest prices - ALWAYS!” How does it believe
RFID is going to help it sustain this corporate culture? Understanding the assumptions that support this initiative
is far more important than finding out what the lowest price is for an RFID tag or dismissing RFID because news
reports insist the technology isn't mature yet. Of course it isn't mature yet! If RFID were mature, like bar coding,
then everyone would be using it, and there would not be the potential for a competitive advantage, but only the chance
to maintain your current position. |
| Technology in its early stages presents an opportunity to challenge how things
have always been done. By engaging in the challenge, it is possible to realize more of the collective creativity
of your employees. So the key question ultimately becomes How long can I wait to decide how to use RFID to my advantage.
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