Study Finds Government Application of RFID at Crossroads

Besides homeland security applications, asset visibility, business process and productivity improvements seen as key areas for utilizing RFID technologies

Government technology executives see IT innovation, including the use of Radio Frequency Identification (RFID) technologies, as key to achieving their organizational strategy, according to a new report by BearingPoint, Inc. (NYSE: BE), the Information Technology Association of America (ITAA) and Federal Computer Week magazine. However, while most respondents view RFID as an emerging technology that will improve government processes and are investigating application opportunities for RFID, few organizations have actually deployed the technology.

Survey responses indicated that applications for RFID technologies within government organizations are many and varied. In addition to homeland security applications, asset visibility, business process and productivity improvements were seen as key areas for utilizing RFID technologies.

Despite the recognized potential benefits associated with RFID technologies, more than fifty percent of respondents indicated that the absence of guidance from government and industry around security and privacy policies and standards was resulting in their deferring further development activity. Other barriers to deploying the technology that government respondents identified included lack of funding, government-wide adoption, and intra-government coordination.

"At this stage in adoption, we weren't surprised to see that most respondents indicated they would spend less than $250,000 on RFID projects in FY2005 and less than $1 million in each of FY 2006 - 2008, which is consistent with what we are hearing through our work chairing ITAA's RFID Standards Task Group," said Nick Evans, global lead with BearingPoint's Emerging Technology practice. "The positive news is that respondents do indeed see the value that RFID can bring to their organizations, and once these typical barriers to adoption are overcome, we can expect to see a wide variety of applications successfully deployed.

"Another encouraging finding was the broad agreement among surveyed government executives that IT innovation continues to add significant value to their organizations," Evans said. "Nearly three-quarters of the respondents consider IT innovation to be 'important' or 'very important' to executing their organization's business strategies."

Jointly conducted by BearingPoint, one of the world's largest business consulting and systems integration firms, ITAA and Federal Computer Week, the survey of global government executives, from mid-September to mid-October, 2004 found that thirty-one percent of government annual IT budgets are directed towards IT innovation, including new initiatives such as RFID, versus IT commoditization and managing and maintaining existing systems.

"The survey clearly shows that most government IT executives believe that RFID technologies can help their agencies carry out their missions more effectively," said John Monroe, editor of Federal Computer Week. "There are still questions that need to be answered, but IT executives believe that the potential of RFID makes it worth the time, energy and effort to invest and learn more about the technology."

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