RFID No Passing Fad, Aberdeen Says

Published: January 19, 2006

by Alex Woodie

If you had been hoping that radio frequency identification (RFID) was just a passing fad, think again, says AberdeenGroup, a Boston IT analyst group. Despite RFID's reputation in some IT circles as a cost center that stands little chance of contributing to users' profitability in the near future except to avoid displeasing the channel masters, Aberdeen says a majority of senior managers are actually optimistic about the wireless technology's potential, at least in the long term.

In its report "The RFID Benchmark Report: Finding the Technology's Tipping Point," Aberdeen communicates several interesting findings that indicate the gradual acceptance and maturing of the disruptive technology. The group found that almost half of the 250 IT executives surveyed plan to spend up to 30 percent of their RFID-related budget for the next year on external services and technologies, which Aberdeen says indicates RFID's growing maturity. Other findings include: 73 percent of companies are building their internal RFID expertise, and the number of companies not conducting an RFID pilot program will decrease by 50 percent in 2006.

Interestingly, the report indicates that ERP software vendors have been slow to help companies with RFID. About 15 percent of survey participants said that their ERP vendors have been the least helpful in establishing successful RFID blueprints. Increased attention to RFID issues by software vendors is crucial for widespread adoption of RFID, says John Fontanella, the Aberdeen analyst who wrote the report. "Just solving the physical issues alone will not create the RFID tipping point," he says.