BUSINESSES SHOULD NOT WAIT FOR GLOBAL RFID STANDARDS BEFORE INVESTING, SAYS CSC

A lack of global industry standards should not be a barrier to businesses investing in RFID technology, according to global IT services company Computer Sciences Corporation (NYSE:CSC).

Concerns have been raised that disparate standards are negatively impacting the take-up of RFID and companies are reluctant to invest huge sums of money in technology in case it becomes the next Betamax. There have also been worries that knee-jerk reactions from industry bodies could ultimately hinder the RFID market even further.

However, CSC has moved to reassure businesses that they will see tangible results if they are willing to invest in RFID technology as it stands and focus their efforts on the right business problems.

There seems to be a wait and see approach to the RFID market amongst many businesses at the moment partly due to absence of global standards, said Chris Deacon, head of business process consulting at CSC. But the reality of the situation is that the lack of uniform standards should not prevent these businesses from achieving benefit from RFID.

Not every industry or technological breakthrough has rock-solid standards in place, but that doesnt mean people should wait and do nothing, which seems to be the case with RFID. Businesses which have taken the plunge and invested in RFID are already getting tangible results, so that proves it can be successful in its various incarnations.

CSC is a member of EPC Global, so we are not dismissive of setting standards, he said. The reality, though, is that standards will emerge, rather than be imposed. The RFID market is evolving rapidly and its too soon to impose strict regulations.

Although barcodes have been around for over thirty years, it took a long time for them to become ubiquitous. Use of RFID is growing more quickly than that, and the lack of standards should not prevent that expansion in the short term, but it is true that eventually global standards will be essential if growth is to be maintained.

CSC believes there are three key issues which businesses need to tackle if they are to make a success of RFID technology.

Chris said: The most important is that businesses must see through the hype and make sure they understand where the value of RFID will lie. It is not a technology which will save money instantly and will, in the beginning, impose significant additional costs. Although the price of the individual tags is low, there will be expensive systems integration and one-off set-up costs. The management of the data will need major investment, which will also impact the bottom line. However, this should not detract from the benefits and efficiencies the technology will provide.

Companies need to take the knowledge RFID gives them and identify where in their supply chain processes they can make savings by improving lead times or reducing manning etc. Wal-Mart, for example, expects to save billions by using RFID effectively.

Secondly the technology must be implemented as part of an integrated business and IT framework. It is a valuable tool, but only if married to effective systems and processes elsewhere in the business.

The third key issue is that the application of RFID is not just a case of buying a reader and screwing it to the wall. The technology can be made ineffective by simple mistakes and a lot of attention has to be paid to physical factors. For example, if tags are being read more than once as they pass through storage areas companies will be left with inaccurate data on stock levels etc. Companies need to test this technology before implementing it fully.

The potential benefits that RFID offers are already well documented new levels of visibility for inventory management, leading to significant cost savings, greater efficiency in the supply chain, the ability to tackle criminal behaviour and automated audit trails.

RFID technology is here to stay, whether companies have yet bought into it or not, concludes Chris. While the standards process needs to be completed, organisations should consider how they should address the technology sooner, rather than later or risk missing the boat altogether.