Jun 11, 2009When it comes to the factors that matter most in regard to a company's choice of whether or not to deploy radio frequency identification, the technology's potential to improve data accuracy ranks high on the list for both adopters and non-adopters. Organizations that have already deployed the technology are more likely than non-adopters to base their deployment decisions on RFID's ability to provide increased competitive differentiation. Those that have not yet adopted, on the other hand, are more likely to deem RFID's cost as one of the most important factors when deciding whether or not to deploy.
Those were some of the main findings of a study conducted by a team of researchers at the University of Wollongong's Centre for Business Services Science, in Australia, investigating the cause of RFID adoption delays. The research group recently published a report, entitled "RFID Adoption Issues," based on a survey of 133 RFID Journal readers. The aim of the study, says one of its authors, Samuel Fosso Wamba, a lecturer at the university's School of Information Systems & Technology (SISAT), was to answer the question, "Why are some companies embracing RFID, while others continue to sit on the fence?"
To help them design their study, the researchers used data collected by the Academia RFID Centre for Excellence, in Montreal, according to Anthony Pallermo, the center's director of business development. The group enlisted help from RFID Journal, which hosted a link to the survey on its Web site and sent invitations to a random sampling of its subscribers.
The survey, conducted between October 2008 and March 2009, asked participants which factors mattered most and least in regard to their company's decision regarding whether or not to adopt RFID technology.
Participants represented companies across most industry sectors, including 31 percent in business services, 29 percent in manufacturing, 10 percent in transportation and communications, 7 percent in retail, 6 percent in communication services, 5 percent in government administration and defense, and 3 percent each in mining, finance and insurance. Company size was also well distributed, with 39 percent of the sample from small firms (fewer than 20 employees), 21 percent from midsize firms (20 to 200 workers) and the remainder from large companies with a staff of more than 200. All respondents were presented with a list of 21 potential reasons for either adopting or not adopting RFID, and were asked to choose the most and least compelling factors from that list.
Company size seemed to have little impact on a respondent's answers to survey questions, Fosso Wamba notes. However, he says, midsize firms comprised the only segment with a level of adoption (30 percent) that is considerably higher than that of non-adoption (13.2 percent).
While overall respondents indicated the greatest factor in deciding whether or not to adopt RFID was the technology's potential to improve data accuracy, the second most important factor was whether they had commitment from top management. Interestingly, among all respondents, privacy threats were deemed the least important factor influencing their decision, followed by security threats and standards ambiguities.
"These results tell us non-adopters are primarily concerned with the high acquisition and other ongoing costs associated with RFID technology," Fosso Wamba says. "This means that vendors should concentrate less on the way RFID can create opportunities for strategic benefits, and more on the ways to calculate a return on investment." Other attributes that vendors should emphasize, he adds, are RFID's ability to improve inventory management and the accuracy of business data.
A copy of the "RFID Adoption Issues" report is available for download at the RFID Academia Web site.
