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RFID Returns Investments Within 18 Months, Users Say

Data culled from ABI Research's annual RFID study indicates the majority of companies currently using RFID technology expect a return on their investments within 18 months or less.
By Beth Bacheldor
Feb 13, 2009Given the currently struggling global economy, companies considering the possibility of deploying RFID technology may be scrutinizing more closely just how quickly such a system would yield a positive return on investment (ROI). A recent survey of companies that already have on-hands experience with the technology, however, indicates a positive ROI may come quickly, within 18 months or less.

According to data gathered by ABI Research, a market research firm focused on wireless technologies, for its Annual RFID End-User Survey report, 74 percent of companies that currently have RFID systems installed and are piloting and/or evaluating additional RFID applications expect to achieve a positive ROI within 18 months of deployment. The data, collected during a survey of 185 organizations conducted in mid-2008, also revealed that 42 percent of those firms expect to achieve a positive ROI within 12 months.

That so many current RFID users expect such a quick return on investment is especially important to potential RFID users, and to the overall growth of the RFID market, says Michael Liard, ABI Research's RFID practice director. Liard says he pulled the ROI figures from the overall survey data, in order to more closely examine how ROI expectations were faring against an economy that has been backsliding for months. "I've noticed that expectations for RFID's ROI are shortening," he says, "because the feelings are that price points [for RFID technology] are coming down, the value of data [from RFID systems] is being demonstrated, and implementations are going more smoothly. All this is helping to fuel shortened ROI expectation timeframes."

Even companies that are currently testing, piloting and evaluating RFID have optimistic expectations of a positive return on investment, the data indicates, with 44 percent of respondents expecting a positive return in 18 months or less, and 26 percent expecting such a result within 12 months.

Combining all of the respondents together (those with systems installed, those with systems installed that are also piloting and/or evaluating additional RFID applications, and those currently evaluating RFID), 62 percent expect a positive ROI within 18 months, while more than one-third (37 percent) expect that result within a year. Only a small percentage—approximately 7 percent—expect a positive return on investment to take more than two years, though 18 percent are not sure when to expect a positive ROI.

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