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In The Prince, the savvy politician Machiavelli asserted that "there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things."

That 16th century admonition should serve as warning to those who espouse the advancement of RFID. The swirling hype, promises of opportunity, and mandates for change have created a maelstrom of uncertainty. There is considerable potential in implementing RFID technology, but realizing the benefits means meeting three key challenges, all of which require careful attention for RFID to deliver its inherent benefits:

1. RFID-Forced Business Process Changes: For many industries, RFID promises nothing short of a fundamental transformation of the cost structure associated with tracking items. But such great promise carries challenges. First, and foremost, is the need to change business processes that RFID deployments will prompt. For example, McCarran International Airport in Las Vegas has begun a $125M project to RFID-enable its baggage-tracking system with a goal of reducing baggage mishandling by 15-30%. With a typical cost of over $100 to route a misrouted bag, the potential savings on the 70,000 bags handled daily at McCarran could be significant.

Though the benefits are obvious, exactly how they can be achieved - given the existing infrastructure and its manual business processes - remains unclear. What kind of new applications will be required to run RFID-enabled "human-free" bag routing? How many people will be required for error detection, and who will install, maintain, and operate the RFID-enabled systems? And what kind of networking infrastructure will be required? In effect, these questions can be summed up as, "What will an RFID-enabled airport actually look like?" Though a potentially daunting challenge, changing business processes to accommodate the potential benefits of RFID is mandatory. And though the technology is fascinating, the changes to physical assets, people and processes are critical thresholds. After all, buildings, people, and processes can be tough - and expensive - to change.

2. Data Volumes of a New Scale: Data is precious, but be careful what you wish for. With in-store deployment, it is predicted that Wal-Mart will generate over 7 terabytes of operational RFID data a day. Traditional technology architectures are not prepared to handle this volume. Supply chain traceability, auditing, and real-time tracking will drive the need to store much of this operational data, yet databases designed to store traditional transactional data will never handle the load.


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