Vendors: Get Good at Establishing ROI for RFID Implementations

Filed in archive RFID Basics on July 28, 2005

Mark Roberti, Editor of the RFID Journal, writes an opinion column that I really enjoy. In his most recent column he states that companies need to have a long term vision of where RFID can take them:

"Twenty years from now, RFID mandates will be long forgotten and companies will wonder what they did before there was RFID, just as today few people remember the complaints about K-Mart and Wal-Mart requiring suppliers to use bar codes. In my mind, a manufacturer's attitude toward RFID adoption is based on whether the company is looking two years out or 20."

Theoretically I agree with what he says. However, I need to disagree, too, in the sense that focusing on 20-year horizons doesn't get systems implemented.

In practice most companies need to establish ROI from their investment in a much shorter time frame.

I don't know any corporate manager who ever got purchase approval for a major systems implementation based on it being great for the company "20 years out." More likely they have to show what the system will do for company in something like 20 months, not 20 years, and how it will pay for itself within that time frame.

The best thing any RFID-related vendor can do for their sales is to get really good at helping prospects establish ROI in hard numbers. Because in the end, that's how major systems purchases get approved.

Tags: RFID; Business