The Danger of Letting IT Run RFID Projects

Meta Group's Bruce Hudson provides six key strategies to ensure that RFID projects don't destroy a company's brand.

Bruce Hudson is the Program Director for Enterprise Applications at META Group. I thought his take on RFID implementation was particularly interesting, so invited him to summarize it here. Enjoy!

-- editor

Radio frequency identification (RFID) technology gets a lot of techies hearts racing. Its a new technology for most organizations, and IT departments are experimenting extensively with RFID hardware and software. In many cases, the final application has not even been defined, giving IT leeway to test out its ideas as it refines its skills.

Some companies have demonstrated quite a bit of ingenuity. Tesco, a leading retailer in the UK, linked video surveillance cameras to RFID readers. When certain products were removed from the shelf, the cameras were triggered to record the movement. At checkout, the video was compared with the person buying the article.

Clever. However, newspapers and the protestors that picketed the Tesco store were not so impressed. Tesco quickly ended that trial and reassured customers that their privacy was secure. It still continues to experiment with RFID, albeit in a much quieter manner.

Wal*Marts mandate to suppliers that by 2006 all cases and pallets must be tagged with RFID labels where feasible has pressured many companies to revamp their supply chain operations.

Our research reveals that most organizations view this as strictly an IT issue. We often see organizations lines of business toss the RFID mandate over the fence to IT. As in the Tesco case, this is a bad idea.

What do you get when you combinE a poorly understood technology and invisible consumer benefits with eager technologists under pressure to please the worlds largest retailer? A recipe for disaster.

The level of mistrust and misunderstanding in the marketplace is high, and backlash is inevitable for companies that do not try to understand consumer fears. Remember the fear surrounding "cookies" at the beginning of the internet age? We are at a similar juncture with RFID.

Next page: What companies can do to avoid RFID backlash.