By Bob Violino

April 1, 2004—One of the huge advantages RFID technology has over bar codes, which require manual scanning, is that once the readers are installed, there’s no additional cost each time a tag is read. Readers can be installed throughout an enterprise to capture data that previously was just too costly to collect because people had to scan bar codes manually. But that benefit also represents a huge challenge: How do companies filter the torrent of information for the few nuggets that need to be routed to back-end systems so they can be acted upon?



This is a critical issue because companies forced to invest in an RFID system to meet a customer’s requirements or to stay competitive with the likes of Wal-Mart will recoup the expense only if the data from the readers can be turned into meaningful information that companies can use to cut costs, reduce inventory levels and improve profitability. The problem is the industry is immature and there are no off-the-shelf solutions that companies can purchase. In fact, some early adopters of RFID technology, including CHEP and Boeing, found they had to have their own IT departments write the software code because there were no other attractive options.

The situation is improving. Enterprise resource planning vendors have announced plans to release middleware that will link RFID readers with their ERP systems. A number of independent software vendors—both established players and startups—have introduced middleware products aimed at the RFID market. Application vendors have launched add-on modules, and large and small systems integrators are doing custom integration work.