Why RFID Matters -- and to Whom (including You!)

Why are American Apparel, South America's Falabella, BGN, a major book retailer in the Netherlands, Office Depot superstores in Canada, and other retailers around the world attaching Radio Frequency Identification (RFID) tags to every item in many of its stores? Especially since retailers tend to be risk- and cost-averse, sometimes especially where technology is concerned? Why, to improve customer service, inventory accuracy, and employee productivity. (The fewer customers who can't find what they want, the more happy customers. The fewer employees and hours needed to count items manually, the more time and people available to help those customers.)

What is a business? Well, basically, by my lights, every business is a constantly shifting mix of two primary resources: information and process. (Every person at every business I've ever seen plays a role that is a combination of these resources as well, so people are included within this admittedly nearly absurdist reduction.)

So what is one of IT's primary reasons for existing, and spending/costing so much of the business' money? Why, to make available information that drives continual improvement of business processes, of course.

Which leads to my take on RFID (an area for which I led coverage at Aberdeen Group from late 2007 through early 2009, and which I've followed for years). My surveys and interviews of many, many users and discussions with a bunch of vendors have led to some basic beliefs I think you'll find directly relevant to your considerations of business process management, business knowledge management, and perhaps many other related areas.

When a discussion of RFID focuses on “radio frequency identification” and its many, many technological variants, that discussion, many if not most times, is already off course. Because unless they work for RFID companies, most business executives I've met couldn't possibly care any less about RFID's technological minutiae and their respective strengths and weaknesses.

So why is RFID important, to retailers and a bunch of other businesses, including many that don't know it yet? Because of what it can mean to the business – real-time, fully integrated data. The more you can know about what's going on at the edge of your network the closer to when it's actually going on, the more opportunities you have to inform, refine and optimize business processes.

RFID and other sensor-based and data-generating network edge technologies can feed the operational applications at the core of just about any business – if the IT infrastructure supporting that business is ready, that is. This means that infrastructure must be designed, deployed, and managed in ways that minimize “time to information.” This is the time and effort required to convert data, whatever its source, into information business applications and users can actually use and act upon in a timely fashion.

So what should you do? If your business and its value chain depend on being able to track valuable assets, or know what's going on out at the network edge, in real time or near-real time, you might want to devote some attention to the latest developments and user experiences regarding RFID, in your industry and perhaps others as well. I'll do my best to help, here and directly with you, if you but drop me a line.

(Note: This is an updated and expanded version of a blog entry I originally wrote for ebizQ, but since I couldn't get the supposed link to the original version to work anyway, I decided to revise and re-post it here. Ah, modern technology...)