Our cover story for this issue examines why investing in technology—in particular, radio frequency identification—can help companies save money during the economic crisis and become more competitive in the long term. For that story, we interviewed technology management consultants and economic experts to get a historical perspective on technology spending during downturns. But we also wanted to find out what RFID end users, as well as RFID vendors, systems integrators and consulting firms, think, and how they plan to act in 2009.
We surveyed RFID Journal subscribers to learn how the global recession will affect their businesses. Respondents hailed from North America, Central and South America, Europe, Asia, Australia and Africa. A whopping 70 percent of respondents said that in past recessions businesses benefited from investing in information and other technologies. As for this recession, 75 percent of respondents said the current economic crisis will slow or reduce RFID deployments, but 47 percent said only “somewhat” or “a little.” And 20 percent of respondents said it would not affect deployments.
End users in a wide range of industries—including aerospace, consumer packaged goods, health care, manufacturing and retail—shared their company’s plans for investing in RFID this year. Given that 68 percent of end users said their company views technology as an investment in productivity, 2009 might not be such a gloomy year for the RFID industry.
Companies Have Different Goals for RFID
Clearly, companies need to control spending now, and end users are looking to RFID to help them save money by cutting costs and improving internal processes and operations. But the data indicates that companies are also looking toward the future: Thirty-five percent of respondents said their company is deploying RFID to gain a competitive edge. And while closed-loop applications tend to deliver faster benefits, 40 percent of respondents said their goal is to track goods to supply-chain partners.
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Companies Cutting Overall IT/Technology Budgets
In light of the economic crisis, most companies are cutting back on spending and tightening budgets. While some are doing across-the-board cuts, others are acting more strategically. In fact, 41 percent of end-user respondents said their IT/technology budget would not be affected in 2009.
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Companies Unsure About Continuing RFID Investments
Of the end-user companies that are already investing in RFID,
15 percent of respondents said their company would definitely scale back its RFID investments in 2009, while 8 percent said their company would definitely increase its investments. The data indicates that 50 percent of companies are still evaluating the benefits that could be achieved by investing in additional RFID technology.
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First-Timers Planning to Purchase RFID Technology
The data suggests that end-user companies that have been exploring RFID pilots and deployments recognize the technology’s potential benefits, even in—or because of—the economic downturn. Of the companies that have been considering investing in RFID, 19 percent have decided to postpone their plans. But 22 percent of the respondents said their company plans to purchase RFID technology in 2009. And nearly 50 percent of respondents said their company is still considering whether to go forward with its plans.
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Companies Choosing RFID Applications By Potential ROI
The data indicates that companies recognize RFID’s potential to deliver short-term benefits, and that it’s possible to build on those applications to generate long-term efficiencies and growth. Of those companies planning to invest in RFID in 2009, 48 percent of respondents said they expect both a short- and long-term return on investment.
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