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Sink or Swim?

As you dive into the depths of RFID, be sure to avoid drowning in data.
By Andy Winans
Dec 12, 2005Companies already experiencing a proliferation in the data they collect desperately want to mine that information to improve marketing, sales, support, operations and product development. Unfortunately, there’s a technology barrier.

The existing patchwork of older, general-purpose architectures simply wasn’t designed to handle terabytes of constantly growing and changing data, or the complex types of analysis business users now need to carry out. Add to this the gargantuan volume of data radio frequency identification has the potential to generate, and the need to address the issue of data management sooner rather than later becomes obvious. The success of companies will strongly rely on how quickly and easily they can harness these massive amounts of data to make intelligent business decisions.

The biggest names in global retailing—Carrefour, Gillette, Home Depot, Marks & Spencer, Metro AG, Procter & Gamble, Tesco and Wal-Mart—are all backing the push for RFID adoption. According to almost every tech pundit, RFID has the potential to bring the "big picture" into corporate decision-making. Data gathered through RFID can allow executives to exploit disparate information streams covering key business functions—including store sales, product orders, distribution-center inventories and supplier shipments. RFID data may well end product counterfeiting and improve response times to product recalls.

There is a problem, however, that the pundits don't address: namely, RFID creates huge volumes of data that are difficult to manage. One recent estimate predicts that once RFID systems reach the level where individual items are tagged, they'll generate 10 to 100 times the data of conventional bar-code systems, turning RFID into something of a Frankenstein monster. Even if you scale this number way back to account for the fact that RFID data is currently available only at the pallet and case level, it's still an extra terabyte of data a day—a huge increase in the daily volume of data on the corporate IT system.

While most organizations are still in the early phase of RFID—i.e., making sure tags and readers work in the distribution center—they should also be thinking about what they'll do with the mountains of data sure to be created once their RFID system has been fully implemented.

In recent months, RFID realists have made a great deal of noise about the limits of this "bandwagon technology." They point out, for example, that massive hardware costs will thwart the practical deployment of RFID systems, not to mention the numerous worries about privacy and security. There's an even bigger issue that trumps these concerns, though: RFID's propensity to grind data warehouse operations to a halt. Because corporations are already sinking under the weight of their own data, it's unlikely they’re prepared to handle the added burden of massive amounts of RFID information.

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