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Dealing with the Data Flood

Companies need to adopt smart strategies for filtering the coming torrent of RFID data and getting useful information into their backend systems. Here are three that will work.
By Bob Violino
Apr 01, 2004—One of the huge advantages RFID technology has over bar codes, which require manual scanning, is that once the readers are installed, there’s no additional cost each time a tag is read. Readers can be installed throughout an enterprise to capture data that previously was just too costly to collect because people had to scan bar codes manually. But that benefit also represents a huge challenge: How do companies filter the torrent of information for the few nuggets that need to be routed to back-end systems so they can be acted upon?

This is a critical issue because companies forced to invest in an RFID system to meet a customer’s requirements or to stay competitive with the likes of Wal-Mart will recoup the expense only if the data from the readers can be turned into meaningful information that companies can use to cut costs, reduce inventory levels and improve profitability. The problem is the industry is immature and there are no off-the-shelf solutions that companies can purchase. In fact, some early adopters of RFID technology, including CHEP and Boeing, found they had to have their own IT departments write the software code because there were no other attractive options.

The situation is improving. Enterprise resource planning vendors have announced plans to release middleware that will link RFID readers with their ERP systems. A number of independent software vendors—both established players and startups—have introduced middleware products aimed at the RFID market. Application vendors have launched add-on modules, and large and small systems integrators are doing custom integration work.

Each type has pros and cons. The choice a company makes will depend on its size, budget, current IT systems and existing vendor relationships. Here’s an analysis of the different approaches and where they make sense. The box Links to the Back End highlights some of the companies offering products in each segment.

ERP Vendors
For a company that has recently invested in a new ERP system or upgraded an old one, the simplest solution is to purchase middleware from its ERP vendor. By taking that route, a company can feel fairly confident that the software will work well with its ERP system, since the same vendor developed it. And it’s likely the company will receive the same level of technical support it got for its ERP system. “The big selling point [of the ERP vendors] is the idea of having one platform for all enterprise applications with access to myriad databases and a consistent view of data across the applications,” says Christopher Boone, program manager for retail, U.S. vertical industry research at IDC, a technology research firm.

No matter how reliable the ERP vendor, integration products for RFID are still relatively new and untested. “RFID creates an enormous amount of data,” says Boone. “You need to make sure the middleware is robust enough to handle that onslaught of data and route it to the right database.” In some cases, organizations might have to install the middleware themselves, pay the ERP vendor to do it or hire a third-party systems integrator. “Whoever installs [the middleware] needs to know how it will impact systems,” Boone says.
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