Pushing the Pace: How Leaders are Putting RFID to Work

Accenture research shows that radio frequency identification is here to stay—the only question is how to develop the right strategies to bridge the gap between now and broad uptakeof this technology.

Spotting which hot new technologies will have a lasting impact is a critical skill in business. So too is working out how to profit from these technologies.

Radio frequency identification (RFID) is a case in point. Will it be a game changer, and if so, how can organizations profit from it? To help clients get a better understanding of how this particular issue is panning out, Accenture interviewed 25 executives from companies that are employing RFID in operations management. They included manufacturers, retailers, consumer products companies and vendors in North America, Europe and Asia.

One clear finding from the research was that RFID is here to stay. The only question is what to do now, before RFID is broadly adopted by the market as a whole.

Deciding what to do about RFID requires a company to make decisions that balance the present and future value of the technology—something that defines a company not only as leader in RFID but also an organization in clear pursuit of high performance as well.

Such leaders have learned many lessons on the way, which Accenture has recast as best practices:

• Understand the business commitment required. The first requirement is to formulate a vision for the business and then understand how RFID might help reach it.
  
  
• Help executive sponsors see the potential value. General management must understand the impact—not in terms of technology but of business impact.
  
  
• Install cross-functional teams to examine opportunities. Enlist a broad range of people from the commercial side helps to showcase the technology while ensuring it is closely connected to processes and commercial outcomes.
  
  
• Collaborate with trading partners based on mutual benefit. The big benefits come from implementation across networks—and that means learning how to partner with all participants in the value chain.

Thosealreadyusing RFID recommend that implementation should be neither too fast nor too slow. Among the drivers that affect speed of uptake:

Costs. The cost of the tag is generally cited as a major obstacle, and the five-cent tag is the prize many of these participants say will motivate them to jump in aggressively. But even now many companies are planning how to amortize those costs over time.

Technology. Evolution at a natural pace is expected.

Data integration. After installing the hardware infrastructure and then using existing data to drive the business process comes the critical stage: leveraging fully the data from RFID and using it in enterprise applications and business processes.

Global standards. When all users can operate on the same platform, networks will proliferate based on a strong business case and cost efficiencies. Along the way, industry collaboration becomes a key value source in the unfolding of RFID. Widespread adoption, it becomes clear, is only a matter of time. Companies that see it that way are looking to RFID now to help them achieve high performance.

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