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Home » finding the ROI in RFID: survey reveals it's not so elusive after all
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finding the ROI in RFID: survey reveals it's not so elusive after all

December 1, 2006
DC Velocity Staff
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Though once considered almost as elusive as world peace, ROI (return on investment) for RFID projects is widely regarded as eminently attainable today. And it's being achieved more quickly than you might expect. A new study reveals that while 85 percent of early adopters received a return on their RFID investments within five years, the wait is much shorter today. Companies just now getting started with RFID can expect a return in half that time: 30 months on average. And a few are achieving ROI in as little as 18 months (although for others, it can take as long as four years).

In that study, Finding the ROI in RFID, market research firm Aberdeen Group notes that measuring ROI is still a challenge that's deterring many organizations from adopting the technology. The ROI depends greatly on the business problem, the approach, the commitment to leveraging the technology, and the ability to turn RFID data into business intelligence, says Russ Klein, the report's author.

"The most popular place to look is improving process efficiency," says Klein, who is research director for Aberdeen's Enabling Technology practice. "The report finds firms that consider RFID to be a part of an overall strategy and involve partners in design and implementation realize better long-term ROI." And if the benefits of collaboration weren't clear enough, Klein adds that companies that share design and implementation between business line management and IT enjoy a 26-percent shorter average time to positive ROI.

Klein says that supply chain initiatives offer the most promising opportunities for realizing a big return on an RFID investment. He also notes that although many companies start out by focusing on a single business pain, other ancillary benefits can hasten the returns.

"ROI comes from multiple sources and if you go about solving a single business challenge and measure only that result, it'll take a lot longer to create value out of the initiative as opposed to looking beyond to other benefits RFID can provide, such as adding in loss prevention or process optimization," he says. "Depending on what business you are in, there is usually more than one benefit, and that greatly improves return on investment."

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