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Aberdeen on the Tipping Point for RFID
Aberdeen Group surveyed 250 industry executives and managers about how their companies view RFID as an enabling technology, both in its ability to deliver value today and in the future. This guest article from Aberdeen analyst John Fontanella looks at the responses.
Jan 11, 2006—This article was originally published by RFID Update.
January 11, 2006—The Aberdeen Group surveyed 250 industry executives and managers about how their companies view RFID as an enabling technology, both in its ability to deliver value today and in the future. The responses we received told us much about the strengths and weaknesses of the RFID market as it now exists, and what combination of events and technical advances would create a much broader adoption of the technology in the future.
Over fifty percent of respondents said that the inability to create an internal value proposition for RFID is the single most difficult challenge in creating greater support for further adoption of the technology. Despite the presence of this formidable obstacle in the short-term, the survey also uncovered a strong undercurrent of optimism about RFID. Almost 60% of senior management surveyed told us that the technology holds great potential value for their companies, and two thirds of them also feel that it would help create significant differentiation in their business processes. Disillusionment in the present yielding to optimism for the future is difficult to reconcile and leaves open the question of how the leap will be made. This is the source of the confusion that plagues RFID today.
Our survey showed that while most of the companies responding hadn't progressed past pilots, the number of pilots continue to increase. Almost a quarter of respondents said that they were planning new initiatives in the next twelve months, and another 29% say that they have found definite advantages to using RFID and will increase their investment over the same period of time. As a result of this increase in activity, a key indicator to RFID rate of adoption continues to grow. Over 40% of companies responding to the survey say they will spend between 10% and 30% of their RFID budget on external technologies and services in the coming year. This is the best indication that more companies are moving from the evaluation and education stage to taking action.
So where is the value in RFID, and when will its tipping point, a time when use of the technology becomes ubiquitous, be reached? A significant minority of companies said that they were already receiving value in areas such as asset, transportation, and security management. The majority though, particularly those companies that are under a customer mandate, are still struggling. The survey pointed out two areas that have the greatest influence over the adoption rate of RFID:
The full report, The RFID Benchmark Report: Finding the Technology's Tipping Point, is available free on Aberdeen's website.
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