RFID for Small Businesses

Filed in archive RFID Basics on March 9, 2005

Software giant SAP has joined up with Intermec Technologies Corp. to provide an RFID offering for small businesses (SMBs or SMEs, depending on which part of the world you are from). Several publications report on the new move, but eWeek has one of the most informative articles so far. Here is what the SAP spokesperson is quoted as saying in the article:

"A lot of SMBs are scared of [RFID] technology---they thought they would have to have a consultant come in and set something up," said Dan Kraus, vice president of SAP Business One, which provides a suite of applications for SMBs. "We're saying, 'start small and add.' What SAP brings to the table is we're able to look at best practices and say, 'SMBs, this is coming toward you, let's help you figure out how to get to it.'"

I think this is a good move on SAP's part, because smaller businesses right now are reading up on RFID in anticipation of a move to RFID. The spokesperson is absolutely right that most small companies are scared of RFID -- scared of it turning into an expensive boondoggle.

And it is not just cost. It is cost-benefit. SAP or any provider to small businesses is going to have to help SMBs quantify the benefits to be gained from an RFID implementation. Why spend any money, even a small amount, if the benefits are not compelling?

I had lunch recently with a manufacturing executive of a small (<$2 million revenue) shop here in Ohio. He is keenly interested in RFID. His shop has been successful precisely because he has been willing to invest in technology over the past decade. But his big question was: how much benefit am I really going to get from RFID? As he pointed out, when your supply chain is smaller, and your operation is smaller, the benefits to be gained are also smaller.

Helping small businesses quantify the ROI from RFID investments will be the key for SAP or any provider to SMBs.