RFID: Early Pilot Essential - Fast Follower Strategies Don't Mix

We recently covered Stephanie Stahl's perspective RFID at core of business processes and also covered -" Barely a day goes by that we don't hear about another application or service or middleware or chip reader that has come onto the market".Gene Alvarez,VP of technology research services at the Meta Group, writes about RFID adaption status and also discusses the approach towards RFID deployments.Excerpts with heavy edits and my comments added:

Many enterprises are standing on the sidelines amid concerns that RFID has been over-hyped. However selective progress is being made, meaning enterprises must keep pace with competitors while controlling investment costs with a technology that has many moving parts. RFID is not a technology that lends itself easily to a "fast follower" strategy, due to heavy infrastructure, as well as business process and application, requirements. A "Slap & Ship" model will remain the preferred model of compliance in the near future. Suppliers will deploy RFID internally as an enabler of process improvements and asset management based on knowledge gained from pilots to meet retailer mandates. Each enterprise's adoption rate and success will be a function of many variables, such as the percentage of R&D transformational spend within the IT budget, the types of products to be tagged, the enterprise's appetite for risk, mandate pressure or lack of mandate pressure. The impact on IT organizations created by current RFID case/pallet tagging schemes hits hard and at many levels of technology within enterprise IT portfolios. The initial entry into an RFID project requires IT organizations to support in-field pilots for setting objectives to test RFID tags, antennas and readers with pallets and cases to determine the impact to existing infrastructure and operational environments.
IT teams should initially assess the impact of RFID to existing infrastructure that is used for barcode-based data capture and determine reusable components such as wireless networks and application servers. Concurrently, many layers in the enterprise technology stack will require RFID impact assessments. These assessments include activities such as environmental surveys at each location to weed out sources of interference and to determine how RFID will perform, from that specific location all the way to the back office and business intelligence applications that run the enterprise. It will take enterprises two to three years to take on all the issues within the technology stack. Issues they must deal with include installation of readers, gates, light sticks, device management, case/pallet configuration, application server and networking upgrades, and integration with enterprise applications. RFID pilots will touch in-store systems, warehouse management, and back office systems and require physical infrastructure requirements such as power and network connectivity. Application infrastructure components such as application servers will require upgrades. These upgrades will enable RFID data aggregation and filtering of events from non-events, as well as control of RFID components such as readers, both handheld and gates, light-sticks, and alarms.The technology impact to applications should be assessed early instead of focusing on the limited scope of the tag testing pilot and determine how to leverage RFID data for business intelligence and data warehousing applications.My Take:We have earlier written that RFID deployment brings within enormous amount of transactional data,the need for a balanced middleware solution, need for realigning business processes, IT backup,tracking and reporting needs - all these are mammoth tasks requiring careful planning and lengthy trials and co-ordination - its imperative all potential RFID users begin testing RFID atleast for pilot with a full blown perspective in mind and define a roadmap for implementation within the enterprise,solidify implementation plans with a proven methodology,draw out program plans , create a good governance structure and aggressively move-in. Being where they are currentlty, and by not pushing, they run the risk of rendering themselves uncompetitive.

RFID Deployment & Regulatory Challenges

Ronald E. Quirk, Jr. and Stacia J. Borrello have come out with a well researched article on RFID deployment and regulatory conformance requirements. The key ideas covered include:

RFID deployment is expected to be substantial. Many market research firms estimate that there will be nearly a tenfold increase in supply chain RFID use over the next five years. The total global market for all RFID systems is expected to roughly double in size in just three years, growing from $1.1 billion in 2003 to $2.1 billion by the end of 2005. RFID patents are rapidly being granted. By the end of 2003, approximately 4,300 RFID-related patents were granted, with more than three-fourths of them granted since 1999. While the indicators show rapid implementation of the technology, there are some regulatory matters of which RFID manufacturers, designers, and operators should be aware. Key RFID regulatory issues include compliance with the Federal Communications Commission’s (FCC) rules and regulations, and the probability of multiplying state privacy laws.Ignorance of the law could impede deployment of even the most efficient and well-designed RFID systems.As the industry and government mandate timetables requiring RFID tags on individual items grow near, privacy laws are likely to be implemented. Companies utilizing RFID would be well advised to stay current on the state of RFID privacy laws and be prepared to implement business plans that will be able to handle the legal mandates of those laws.

As RFID continues its rapid growth in the global marketplace, opportunities to capitalize on this technology abound. While high-profile compliance mandates by retailers such as Wal-Mart and Target and federal agencies such as the DoD fuel the implementation of RFID, countless numbers of businesses across all market sectors are investigating the cost-saving capabilities of RFID. However, with rapid deployment of RFID on the horizon, it will be critically important to know how to navigate within the regulatory environment. RFID manufacturers, vendors, and users should be aware of, and develop programs to ensure compliance with, the myriad of current and future regulations.

The Force Of The Coming Service Revolution

Ray Lane, of Kleiner Perkins writes, More than a change in pricing or business model, software as a service is an inevitable, fundamental shift in enterprise software culture. Excerpts from the powerful article with edits and my comments added:

Software as a service is transforming the IT industry. It’s more than a new way of pricing or a business model change, it will drive a whole new mindset for enterprise software suppliers and customers. Software as a service does not refer to ASPs – although they are a big part of it. It is defined as tying supplier revenue to a business outcome- the supplier sees the client’s end result, measures its success, and receives revenue based on the results achieved. This doesn’t necessarily mean success-based pricing, however. It can be subscription, or even license based. In some cases, a company offers to sell a service. Negotiations can take place around buying the intellectual property, but the company can buy a software license and pay the supplier to operate it. There exists a lot of examples of companies that are offering a service with very complex software behind it (Amazon, EBay, iTunes, SalesForce) - even if the customer owns a license (Elance, Oracle Online, Siebel On-Demand). These suppliers focus on selling knowledge – not bits.

In the past, discussion between customers and sellers were about not "pricing", but prices: They’re just too high. Now it’s a different conversation: Do we have a pricing model problem? Do we have a business model problem? Do we have an impedance mismatch between price and value? Would there be a competitive advantage to having a subscription-style pricing model? Customers are in control. They’re forcing suppliers to compete with each other; they’re demanding lower prices and more accountability for results. A service delivery and pricing model gets software vendors out of the "hockey stick" sales dynamic at the end of the quarter. It gets the customer out of having to buy something before they can use it. A move to a service model means the reputation of the software industry improves. If the transition occurs gracefully, customer satisfaction will grow, profits will grow and become more predictable and, ultimately, the industry will grow from real demand by customers when the technology is actually needed and consumed. How does a large supplier avoid a share price haircut when converting to a service model?
- First, this doesn’t happen overnight.
- Second, it requires education of public market analysts about the development of long term profits and cash flows.
Analysts recognize that if you’re a software company that can grow 10 to 15 percent a year and increase profits and free cash flow, that you’re a good investment.The days of make money quick is gne, but the software industry is still a better investment than most any other industry, and will be for a long time. Ray's advice to startups: As a startup, if you’ve got the right funding, start off as a service business, using subscription pricing. You won’t have to defend your history. No problems of changing business models. You will need to invest up front before you see the benefits, but once you do, it’s beneficial to customers, investors and management. It’s a much more predictable model. And it’s the way we’ll all be doing business in the future. Software-As-A-Service is the future reality and early embracers would benefit a lot - as we wrote previously The Paradox Of Technology Industry Solutions As Commodities continual innovation and high growth shall ensure the constant evolution of the IT industry and the service revolution would add a new dimension to the growth of the industry.

RFID, Cell Tech, GPS Come Together To Combine Animal ID program

(Via Smartmobs). As animals are loaded onto trucks, an onboard reader collects a time and date stamp,location information using GPS technology, and identification numbers for the site and each individual animal. The data is sent via cell phone to a database kept by Kansas animal health authorities. If the cattle are loaded or unloaded in a remote location without cellular service,the information is stored in the onboard computer and automatically transmitted as soon as the truck passes a cell phone tower. On any given day in Kansas, between 400 and 500 trucks are on the road hauling cattle.On average, cattle are shipped four times in their lives.The state has only 1.5 million head of brood cows, but feeds 6 million cattle and slaughters 7 million head of cattle each year, he said. About 5.1 million cattle are shipped into Kansas from elsewhere in the nation."Within 24 hours from either coast, we can have cattle that can arrive in Kansas," Spire said. "What that means is that Kansas is a state at risk for the introduction of potential animal diseases."
However, the project's developers fear individual readers, which would be used only once or twice a year, would end up at the bottom of the farmer's toolbox, left out in the weather or where rats could eat its wiring. Ranchers are also worried about the security of the information, as well as adopting technology that either doesn't work or becomes outdated quickly.

Radar Golf Claims Breakthrough With RFID Golf Balls!!

( Via Informationweek) Launched in October 2003, Radar Golf has developed a U.S. Golf Association-conforming golf ball that contains a radio-frequency tag.The company's Ball Positioning System (BPS) technology enables a golfer to find a "lost" golf ball via a RadarGolf Handheld device. The handheld device "beeps" when pointed toward the ball. Detection range is 30-100 feet. BPS combines proprietary radio-frequency and golf ball manufacturing technologies to create the RadarGolf System. The system allows communication between a handheld device and a tiny chip implanted in the core of a golf ball. The RadarGolf Handheld transmits a specific radio frequency signal that is received and reflected back by the RadarGolf microchip. The handheld provides a visual LCD signal strength display and pulsed audio tone feedback to the golfer looking for their ball. Radar Golf hopes to bring the technology into the mainstream and has aligned itself with several partners. The company announced that it has selected Philippine manufacturer Integrated Microelectronics Inc. (IMI) to produce the RadarGolf Handheld unit.
"Golfers of all handicaps continue to reserve systems and tell us that they would like to minimize lost ball penalties and spend less time looking for balls," said Steve Harari, CEO of Radar Golf, in a statement. "We anticipate that by this fall, one or more leading ball manufacturers will elect to include our BPS technology in their golf ball line to gain a competitive edge." Interesting indeed are the reache of RFID technology!!