Nearly 37 Percent of RFID End-Users Expect Positive ROI in One Year

Based on information from its annual RFID end-user survey, ABI Research, Oyster Bay, N.Y. reports that a general lack of clear return on investment (ROI) models and data on real-world results has slowed adoption of RFID technology, particularly in open-loop supply chain environments. ROI estimates are critical to RFID purchasing decisions, and in the survey of 185 organizations conducted in mid-2008, lack of adequate ROI data was the third-highest ranked reason for non-deployment.

“In times of economic slowdown, a quick positive return on investment is especially important to potential RFID users,” says practice director Michael Liard. “We asked the respondents to our survey about their hopes and expectations for ROI on their RFID investments. While a substantial majority saw 12-24 months as a reasonable expectation, more than one third anticipated a return within the first year.”

The survey shows 36.7 percent expect ROI in less than 12 months, 25 percent in 12-18 months, 13.3 percent in 18-24 months, 6.7 percent in more than 24 months, and 18.3 percent do not know.

The responses included all flavors of RFID deployment: closed- and open-loop across a variety of applications, and at various stages of trials, rollouts, and fully deployed systems.

ABI reports that one of the great problems in formulating useful ROI models and setting goals has been the reluctance of many end-users to share what they have learned. “It’s tough,” says Liard, “and has been holding parts of the industry back. But somebody who’s getting great results with RFID is often understandably wary of letting competitors know how much more competitive it is making them. But if we want this market to move forward in a recession, we need to start talking about these things as proactively as we can.”

Some RFID projects are still moving forward; others have been delayed by the recession, or put on hold. “The good thing,” Liard concludes, “is that we’re not hearing much about cancellations. That’s a positive sign.”