Section 8.3. Step 2: Determining Potential Application Areas

8.3. Step 2: Determining Potential Application Areas

You might define several broad categories in which RFID use might improve business efficiency (for example, the manufacturing process, the distribution logistics, administration and security). Only specific areas under these categories should be targeted, however, not the entire category. To improve security, for example, you should pick the areas with urgent security needs (for example, employee pilfering) instead of trying to improve the security of the enterprise as a whole. You can further break down these selected areas to pinpoint the specific spots that promise the most effective impact (for instance, a particular distribution center that accounts for most of the shrinkage). The reason for this is simple. Because RFID is an emerging technology, you must use it selectively and iteratively so that its cost, complexity, and risks (as well as benefits) are kept in check with minimum impact on business operations. Therefore, you should select only a handful of such potential application areas and prioritize them for RFID application. For each such application area, you should develop a business case based on a set of criteria. For example, you might use the following criteria:

• Benefit

• Cost

• Risk

• Complexity

• ROI timeline

The preceding list is not exhaustive; you can supplement it with other business-specific factors. However, these sample factors generally suffice for a business case development. The following sections discuss these criteria in detail (and, thus, the creation of a business case). You can consider these business cases the business justification for using (or not using) RFID in an enterprise.