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Computerworld - The IT trade press and industry analysts alike have been hailing radio frequency identification as the second coming of bar codes. But for users, most of whom have implemented only small, low-impact pilots, RFID is a long way from becoming a key part of the enterprise. In fact, respondents to a recent Computerworld survey ranked RFID second among technologies that hold promise for their companies or industries -- but first among technologies that haven't lived up to their hype.
Indeed, many organizations that have deployed RFID have done so because it was mandated by powerful business partners like Wal-Mart Stores Inc. or the U.S. Department of Defense, which can control how their suppliers do business. Other early adopters are testing the technology in their own supply chains or assembly lines, or in systems for tracking IT assets. They're the exception, however, since high-cost, complex deployment and entrenched tracking systems -- most notably bar codes -- are keeping RFID on the back burner at many organizations.
One early adopter, American Power Conversion Corp., a West Kingston, R.I.-based manufacturer of uninterruptible power supplies and other physical network infrastructure products, is ahead of the RFID curve. But even at APC, the technology remains in the pilot stage. The $1.7 billion company is about to launch a small-scale RFID rollout that includes middleware from IBM and production design and deployment services from Dulles, Va.-based Odin Technologies.
Despite being close to completing its second ROI study to determine the financial benefits of a full-scale RFID deployment, including integration with its Oracle ERP suite, IT officials at APC say they don't expect widespread deployment at their own company or other organizations this year.

Richard Morrissey, director of e-business strategy development at APC Image Credit: Webb Chappell

"2006 will still be a learning year. We'll be asking, 'Are we getting financial benefits, and is this a complete solution?' " says Richard Morrissey, director of e-business strategy development at APC. "The cost of entry has come down, so for our suppliers, it's not as cost-prohibitive. But to scale globally will be a significant cost. Even though the prices are dropping and standards are being settled on, early adopters have to have deep pockets."

Cost Issues
RFID isn't new -- if your car is equipped with a transponder for paying highway tolls, chances are you're already using it. But it's just now beginning to affect corporate IT. RFID holds the promise of automatic identification and data collection without the line-of-sight and proximity limitations of bar codes. However, despite the hype, widespread