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German Study Finds Most RFID Deployments Deemed a Success

University of Freiburg researchers, interviewing several hundred RFID users, found more than 70 percent expect to amortize their investment within four years.
By Rhea Wessel
As expected, Strüker says, the report showed RFID is far from a mass-market technology, but that a large majority of the companies that use the technology are "exceptionally" successful with it. To measure the elusive variable called a company's "success," the researchers designed several questions. They asked if each firm plans to end its use of RFID, if it reached the goals set out at the start of the application, and when it expected to achieve a return on its investment (ROI).

Only two respondents indicated their company planned to stop their use of radio frequency identification, with more than 70 percent of all RFID users estimating an amortization of their investment within four years. "I'm very familiar with IT," Strüker states, "and I can say that this [ROI] is enormously fast."

The vast majority of the respondents said they used passive RFID tags—either high-frequency (HF) or ultrahigh-frequency (UHF)—attached to a variety of objects. The information also showed that a majority of companies reached their goals with RFID, though Strüker says it can be harder to measure benefits derived from RFID's ability to provide more accurate business data than it is to measure the technology's ability to reduce labor costs and personnel expenses.

Additionally, researches concluded that because most RFID users struggle to measure their applications' performance, they require low-cost and efficient tools for doing so. Total cost of ownership (TCO) is the most prominent method for measuring performance, according to the study, which also cites activity-based costing (ABC), individual performance indicators (IPIs) and balanced scorecards (BSCs) as other measurement methods that may be useful in determining how well a company's RFID implementations perform and benefit their operations.

Radio frequency identification has potential for a variety of industries, the report finds. "It's not true that RFID is a technology for the retail industry," Strüker says. "No single industry seemed to be ahead." Of the individuals that responded when asked which industry their company served, some 41 percent said they were in manufacturing, about 12 percent indicated retail and 25 percent indicated other services.

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