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many of the most frequently used tags is approaching 10 cents, with the long-sought goal of 5
cents or less likely in a few years. Reader costs are similarly dropping. This is allowing RFID
to become a cost-effective enabler for new business applications, where IT executives can
take the lead to achieve a new generation of major business benefits.
Impact on Business Operations
The opportunities enabled by RFID beyond the supply chain fall into three categories: safety
and security, mobile asset management and complex process simplification. Each applies in
various degrees to a wide range of industries; in fact, there are few industries that won't be
affected by RFID technology in some respect.
1. Safety and Security
There are two business benefits within the safety and security category. The first is the
reduction or elimination of theft and counterfeiting. Equipment such as laptops and
handheld devices can be tracked and traced, providing a deterrent to theft and a
recourse for recovery.
Companies that lose millions due to piracy, such as DVD, software and luxury goods
manufacturers, can insert tags designed to authenticate the products for retailers and
provide a deterrent to counterfeiters.
In addition, RFID can also be applied to important, sensitive or valuable documents,
providing document security and also avoiding productivity-consuming searches for
missing files, a hazard common in many paper-intensive entities such as financial
services companies and government agencies.
The second dimension is human security, particularly in human identification and
authorization. Sadly, photo identification alone is no longer much of a deterrent to
people determined to enter secure facilities. A badge with an RFID tag containing
additional identification/authorization information, scanned by a reader tied to a
secure access database, greatly improves security.
Human safety is also enabled by RFID. In hospitals, it's of course critical to ensure
that the correct medicine or procedure is given to the correct patient. Unfortunately,
even with the ubiquitous wristband identification, mistakes are made. Patient RFID
tags can help prevent them. People who can't identify themselves, such as infants and
Alzheimer's patients, can benefit both in and out of the hospital.
if rented then replaced at full cost. Devices that require periodic upkeep become
unusable if not maintained.
Hospitals are an excellent example of the financial impact of poor mobile asset
management. Dr. I. Mun, director of biomedical research at Aventura Hospital and
Medical Center in Florida, speaking at the April 2005 RFID Journal Live Conference,
estimated that the average hospital's mobile medical equipment is only 45% utilized,
that 5% to 15% is written off each year as "lost" (this includes equipment not
serviced) and that there is $1 million a year in equipment theft. This cost can be
aggravated by incorrect usage due to lack of asset history, such as devices that must
be decontaminated after each use. Using RFID for mobile asset management is often
the easiest business case to develop and is readily applicable to a wide range of
industries.
to capture additional information around and about events: the state before,
during and after each step; the people and assets involved; the conditions at the
time; and key measurements and metrics.
IT will need to decide whether to integrate this additional information into the
existing corporate data infrastructure or develop a separate management
structure. Business-rule definition and data analysis capabilities must be
upgraded, as data and events need to be analyzed as close to real time as
possible to provide the intelligence and monitoring necessary to make processes
more efficient and avoid or quickly correct mistakes and problems.
Depending on the industry and the business operations affected, the IT
organization may find itself pushed toward a more decentralized computing and
data management infrastructure than it would otherwise have planned. Finally,
data security, privacy and storage will pose new challenges due to the volumes
and real-time sensitivities involved, particularly with human track-and-trace
applications.
Network and End-User Device Management
A great variety of data extracts and information views will need to be made
available throughout RFID-impacted operations. As often as not, the end users of
this information won't be at desktop computers, but mobile, requiring
deployment of wireless LANs and other remote connections in areas not being
addressed today.
In addition, information views will be need to be constructed assuming that a
handheld computer, BlackBerry device or even a cell phone will be the recipient's
platform of choice for receiving information and providing updates. These
compact platforms will require new thinking in how to process a great deal of
data in ways that provide essential information to the user yet doesn't filter it
excessively, in a readily useable format. For location data, geographical
information systems can play an important role in graphically depicting large
volumes of information in a concise manner.
Sensor Management
organizations will need a new set of capabilities and skill sets to manage the proliferation of
RFID readers and tags and to understand the processes within which they operate. To
effectively provide sensor management, IT needs to ensure that standards are set for tags,
readers and how they are deployed.
Different applications may require different standards on dimensions such as system
frequency, read range, passive vs. active tag power, accuracy, reliability, placement, polling
frequency and environmental conditions.
Maintaining and repairing readers will also be a new capability, and the speed of repair will
become an important metric. Also, certain applications will require multiple readers near one
another, sometimes resulting in conflicts and troubleshooting delays.
In repair situations, it will be important to have a backup or contingency process in place to
ensure uninterrupted operations. IT is the logical entity to take the lead in designing and
implementing such processes. IT professionals will need to become much more proficient in
business operations then they have been historically. RFID will push IT into many corners of
the business where before it may have only been involved peripherally.
Systems Integration
The challenge of tying all the piece parts of RFID together in a smooth and reliable manner
will perhaps be the greatest challenge for IT organizations. In many ways, deploying RFID is
like deploying a whole new IT infrastructure, with new data sources, processing mechanisms,
recipients, network capabilities implemented where none were previously needed and a new
category of devices to communicate with and manage.
That doesn't mean legacy systems won't be involved. On the contrary, many RFID
applications will need sophisticated interfaces to ERP and other operations support systems.
For example, hospitals will need to interface their RFID systems with legacy hospital
information systems, picture-archiving and communications systems, electronic medical
record systems and computerized physician order-entry systems.
Perhaps most important, a new level of business-process understanding will be required, and
deep operational ties will be needed between IT and the business. IT professionals must fully
understand the technology and the business operations to which it will be applied; they no
longer have the luxury of being at the periphery of how the business operates.
Summary
There is a tremendous amount of business and IT planning and preparation that needs to be
done to support the impact that RFID will have on business operations and support
infrastructure. It's absolutely essential that RFID and IT planners be fully coordinated in their
activities and timelines. With RFID deployments just around the corner, now is the time for
IT to start aggressively planning for RFID.
David H. Williams is managing partner of E911-LBS Consulting, a management consultancy
focused on helping companies strategically use wireless technologies. He is the author of
TheDefinitive Guide to Mobile Positioning and Location Management and The Definitive
Guide to Wireless E-911. He has a MBA in information systems management from the
University of Texas at Austin and a bachelor's degree in electrical engineering from Purdue
University.
Read more about Mobile/Wireless in Computerworld's Mobile/Wireless Topic Center.