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Why RFID—and Why Now?

Radio frequency identification is gaining traction, because business needs drive the evolution of information technology systems.
By Mark Roberti
Jun 14, 2010When I spoke at the MIT Sloan CIO Symposium, on May 19, I had a chance to chat with some attendees. One CIO from a large Midwestern manufacturing company indicated RFID was just one of many emerging technologies on which he needed to keep up-to-date. "There are always new technologies emerging," he told me, "like price-optimization software, that we need to evaluate periodically, to see which ones can deliver value to the company."

Price optimization, to my mind, is not a technology, but rather a software application. And it's not that new—I wrote about Ford dealerships using it back in 2001. But his larger point seemed to be that the development of new technologies is random, like genetic mutations, and that his job was to see which were ready to be used, and which were not—sort of the way natural selection decides which mutations carry on and which die out.

While genetic mutations are random, the forces of nature influence the course of evolution. For instance, if there is a long cold spell, mutations such as a heavy fur coat will help an animal survive. Similarly, new IT products might pop up randomly, but business factors determine which catch on and which are discarded.

In the 1960s, for example, the need of senior managers to process more information as companies grew led to the adoption of mainframe computers. In the 1970s, the need to crunch numbers at the department level resulted in the adoption of minicomputers. And a decade later, individuals needed to process information, so desktop computers caught on.

Today, companies are managing many aspects of their business extremely well. CEOs at television stations have dashboards that show the nightly ratings of their shows and the yield on advertising. Manufacturers track the output of production lines and the number of defects per million. Cisco is able to close its books at the end of each business day.

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