The Importance of Industry Parallels

Leverage insights and innovation from other industries to shape your strategy.
Published: May 23, 2005

As the modern-day RFID industry continues to evolve and discover new areas of opportunity, many industry observers are curious as to which industry verticals are next, which verticals have the most potential and will see the most growth, and what the precise timing of adoption will be within each of these verticals. Strategists often use analogies—in the form of technology, market and industry parallels—from prior experience to formulate possible answers to some of these questions.

The technology parallels are well known. As an enabling technology, RFID is very similar to wireless technologies, and we can make projections about its adoption and use based on our experiences with wireless technologies and other historical technology enablers. Looking at market parallels, wireless technologies, like RFID, have experienced typical drivers and barriers to adoption, fragmented markets, broad-ranging and niche applications, and so forth. Of course, such parallels cannot provide all the answers, but they can often help to manage expectations as to the rate of growth we might expect in the upcoming years and how the market might evolve. For example, without external stimuli such as industry mandates helping to accelerate the marketplace, most technology adoption occurs gradually over many years. This has certainly been true of bar coding, which took more than 15 years to become standardized, and of pre-EPC RFID technologies, which have matured over many decades.

Another approach to predicting future trends and exploring opportunity areas is to leverage industry parallels in addition to these technology and market parallels. It’s well known that most technologies move progressively through early-adopter industries such as financial services and eventually become leveraged within more conservative verticals such as government and healthcare. The lessons learned during deployment within these early-adopter industries can often be leveraged to shape strategy and unlock opportunity areas. This is true not only for later adopters within the same industry, but also for all types of adopters—early and late—within later-adopter industries.

The healthcare industry is a prime illustration. Many of the applications of RFID within the commercial and government verticals can be directly mapped to opportunities within healthcare. Pharmaceutical tracking within the healthcare supply chain is a one example, but there are many other niche applications that can be explored and transitioned to healthcare as well. Real-time location systems deployed by the U.S. Department of Defense for tracking munitions or other assets can be applied within healthcare to track patients, caregivers and equipment. RFID wristbands used in the justice system for tracking inmates can be leveraged for more accurate medication administration in hospitals and so forth. In many cases the business case is totally different, but the value proposition is equally compelling.

Additionally, the IT architectures that integrate bar code, passive and active RFID technologies within the DOD can be leveraged for similar purposes within healthcare. Like the DOD, healthcare IT executives are seeking holistic approaches that avoid duplication and seek to consolidate the IT stack wherever possible.

Of course, elements of the healthcare value chain are at different levels of technology maturity themselves. From an IT perspective, payers, the financial institutions, are typically more advanced than providers and so on. The exciting aspect about healthcare, particularly on the provider side, is that as medical equipment becomes more networked and IT becomes incorporated into these devices, the innovation that has traditionally occurred purely on the clinical side is now starting to branch out into healthcare IT. The two are becoming highly intertwined, and the potential of healthcare IT is only now starting to be exploited for business advantage. An RFID example of this is the RTLS asset-tracking technologies that are becoming OEM components within certain products of medical equipment providers.

For strategists in early-adopter organizations within late-adopter industries, the message is clear: Leverage the innovation in early-adopter industries to draw analogies in your own industry. Your industry may be unique in many regards, but more often than not there are real parallels that can be drawn. This approach can help to shape strategy and provide compelling examples of where to look for value.

Nicholas D. Evans is global lead, emerging technology, with BearingPoint. He is the author of Business Innovation and Disruptive Technology (Financial Times Prentice Hall) and chairs the RFID Standards Task Group for the Information Technology Association of America (ITAA). He can be reached at Click on the link below to comment on this article.