At the IFS Executive Forum, which took place on March 29 and 30 in Orlando, Florida (US), leading research analysts and industry experts discussed how companies can still leverage technology to maintain their competitive edge, even during tough economic times. The event was held in conjunction with IFS World Conference 2004, and it included six panel discussions, with each panel including top executives, analysts, and journalists. Some of the renowned panelists were Geoff Dodge, vice president, Business Week; Dave Caruso, senior vice president, AMR Research; Barry Wilderman, vice president, Meta Group; Leo Quinn, vice president of operations, Global Manufacturing Solutions, Rockwell Automation; Dave Brousell, editor-in-chief, Managing Automation; David Berger, Western Management Consultants; and Josh Greenbaum, principal, Enterprise Applications Consulting. Breakout sessions explored such topics as turning global competitive threats into opportunities, increasing the bottom line through operational efficiency, complying with the Sarbanes-Oxley Act of 2002, and using enterprise software to prepare for future challenges.
Technology Evaluation Centers (TEC) was represented at the executive panel titled "The Future of Enterprise Software and How It Impacts Your Profitability", which was aimed at helping companies find out where enterprise software is going in the next five years, and how it can make or break their profitability and market share. The panel, which was moderated by Josh Greenbaum, included the following participants: Barry Wilderman; Peggy Smedley, president and editorial director; Start Magazine; Dave Turbide, an independent consultant and renowned columnist for magazines such as The Manufacturing Systems; and Predrag Jakovljevic, research director, TEC. In preparation for the event, we polled the thoughts and opinions of our experts and contributors: Olin Thompson, Jim Brown, Joseph Strub, Kevin Ramesan, and Lou Talarico, given they were unable to attend the event in person.
Below are the questions and consolidated thoughts and answers that transpired from the panel discussion. We also took the liberty to expand with a few pertinent questions and thoughts that were not discussed at the panel per se (due to the time limit), but transpired from many other interactions and presentations at the conference. Also, some pertinent articles published previously on our site, which may shed more light at the respective topic are mentioned as further recommended readings.
The questions are
Q1. What is the one piece of new software or technology that will be a must-have in the next five years? (see Part One)
Q2. Some pundits say the future of enterprise software lies in service-oriented architectures and component applications. True? False? (see Part One)
Q3. How does the development of new business processes and business process modeling fit in? (see Part Two)
Q4. What are applications hosting and other service models? (see Part Three)
Q5. Radio frequency identification (RFID) is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID. (see Part Four)
Q6. Technology aside for a moment, what can we say about its impact on profitability? (see Part Five)
Q7. With all this new technology, the question is what happens to existing applications and technology. Nobody wants to start over, but how much will existing IT systems have to change? (see Part Five)
Q8. Will the newest and greatest only come from packaged software? What about custom development? What is the build versus buy equation look like in the near future? (see Part Six)
Q9. How will the latest improvements in software flexibility and agility play in the single-vendor versus multi-vendor solution equation at multi-division corporations? (see Part Six)
Q5. RFID is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID.
A5: Well, we will have all likely heard of some concrete examples (or imagined ideas) of expensive (and thus highly pilfered) retail items (such as razors, prescription drugs, apparel, and DVDs) packaged with pin-sized chips and tiny antennae that send retailers and manufacturers information about their use, and even about those who buy (or attempt to steal) them. Or the stories of grocery clerks immediately knowing when perishable items on the shelf have expired and replacing them before the items are purchased. We've also have heard of a consumer ordering the latest "hot item" and tracking it in the real time through the entire supply chain right up to the time when it is ready to be picked up. How about the idea of tracking employees and their labor with an RFID chip embedded in their ID badges to automatically record their transactions and even control their authorizations for a given area to detect security issues?
These futuristic-sounding scenarios (though not necessarily of the future, given such technology was employed decades ago, but only where its price was justified, like in the defense industry or to track the movements of precious pets) are being touted as the applications of an automatic identification and data capture technology named radio frequency identification (RFID). RFID uses low-powered radio transmitters to read data stored in smart tags embedded with minuscule chips and antennae. The tags are attached to packaged goods that can communicate with electronic reading devices and deliver a message to a computer that alerts retailers, suppliers, and manufacturers when a product's state has changed and requires action.
While the potential of RFID technology is indisputable (for example, unlike bar-codes, RFID requires no direct contact or line-of-sight scanning, and it provides streams of data that can be differentiated and interpreted before being passed to an enterprise application), much more is required in moving RFID from a lab to a live environment. RFID has the potential of a new technology inflection point and it can be a missing piece in the long-lasting puzzle of squeezing excess inventory out of supply chains. It will be only this piece, however, when (and if) it reaches a critical mass of adoption and maturity over the next several years. Nowadays, the market is still in a "chicken-and-egg" conundrum—until more companies commit to RFID, the cost of tags and other infrastructure will remain prohibitively high for mass deployment. A few years ago, typical smart-label tags were between $1�$2 (USD) each, while today we may be looking at production volumes in millions, costing 30�40 cents (USD). This is further projected into billions of tags on individual items in the future causing the cost to ideally fall to five cents (USD) or so. Eventually, in the long term, the price might fall to a penny or less, with new technology and even greater volumes. Still, while the tag price might seem as a major barrier now, it will likely become a minor issue down the track, when many companies start grappling with RFID deployments in earnest.
Over that time, many companies will begin to deliver and potentially receive a higher proportion of goods with RFID tags and, thus, they will have a better understanding of the technology and its potential in broader business improvements per se rather than only due to the mandated Wal-Mart, (US) Department of Defense (DoD) or Target compliance. Namely, as the world's largest retailer, with over 5,000 outlets worldwide, Wal-Mart currently uses traditional bar-coding and UPCs (unique product codes) to identify items and cases or pallets of goods as they move through the supply-chain and out to the stores. By 2005, Wal-Mart has envisioned to have live implementations of RFID tagging using new EPCs (electronic product codes, which can carry more useful data than UPCs), with a mandate to the Top 100 suppliers to provide RFID tags on cases and pallets at distribution centers, followed by item-level tagging at a much later date. EPCs on tags should be easier and quicker to read than barcodes, since there is supposedly no need to unpack pallets to check contents, as RFID readers do not, unlike bar-code scanners, require line-of-sight, which should all result in less labor, fewer errors, and better management of inventory.
However, companies implementing RFID should expect increased labor in the first year or so, because vendors have yet to perfect solutions for automating tagging and embedding RFID in packaging material. Also, the current state of RFID technologies would also revolve around label creation and production, plastic chip development, intelligent shelving and packaging, to name but a few. Furthermore, to gain benefits such as product tracking, supply chains should logically begin RFID implementation at the manufacturing level, rather than at the distribution center, which is one step closer to a retailer in the supply chain. Still, "source tagging" cases at the manufacturer is too disruptive for most companies to implement.
Technology Evaluation Centers (TEC) was represented at the executive panel titled "The Future of Enterprise Software and How It Impacts Your Profitability", which was aimed at helping companies find out where enterprise software is going in the next five years, and how it can make or break their profitability and market share. The panel, which was moderated by Josh Greenbaum, included the following participants: Barry Wilderman; Peggy Smedley, president and editorial director; Start Magazine; Dave Turbide, an independent consultant and renowned columnist for magazines such as The Manufacturing Systems; and Predrag Jakovljevic, research director, TEC. In preparation for the event, we polled the thoughts and opinions of our experts and contributors: Olin Thompson, Jim Brown, Joseph Strub, Kevin Ramesan, and Lou Talarico, given they were unable to attend the event in person.
Below are the questions and consolidated thoughts and answers that transpired from the panel discussion. We also took the liberty to expand with a few pertinent questions and thoughts that were not discussed at the panel per se (due to the time limit), but transpired from many other interactions and presentations at the conference. Also, some pertinent articles published previously on our site, which may shed more light at the respective topic are mentioned as further recommended readings.
The questions are
Q1. What is the one piece of new software or technology that will be a must-have in the next five years? (see Part One)
Q2. Some pundits say the future of enterprise software lies in service-oriented architectures and component applications. True? False? (see Part One)
Q3. How does the development of new business processes and business process modeling fit in? (see Part Two)
Q4. What are applications hosting and other service models? (see Part Three)
Q5. Radio frequency identification (RFID) is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID. (see Part Four)
Q6. Technology aside for a moment, what can we say about its impact on profitability? (see Part Five)
Q7. With all this new technology, the question is what happens to existing applications and technology. Nobody wants to start over, but how much will existing IT systems have to change? (see Part Five)
Q8. Will the newest and greatest only come from packaged software? What about custom development? What is the build versus buy equation look like in the near future? (see Part Six)
Q9. How will the latest improvements in software flexibility and agility play in the single-vendor versus multi-vendor solution equation at multi-division corporations? (see Part Six)
Q5. RFID is on everyone's mind these days. Let's discuss the software issues around RFID and what kind of software solutions will be taking advantage of RFID.
A5: Well, we will have all likely heard of some concrete examples (or imagined ideas) of expensive (and thus highly pilfered) retail items (such as razors, prescription drugs, apparel, and DVDs) packaged with pin-sized chips and tiny antennae that send retailers and manufacturers information about their use, and even about those who buy (or attempt to steal) them. Or the stories of grocery clerks immediately knowing when perishable items on the shelf have expired and replacing them before the items are purchased. We've also have heard of a consumer ordering the latest "hot item" and tracking it in the real time through the entire supply chain right up to the time when it is ready to be picked up. How about the idea of tracking employees and their labor with an RFID chip embedded in their ID badges to automatically record their transactions and even control their authorizations for a given area to detect security issues?
These futuristic-sounding scenarios (though not necessarily of the future, given such technology was employed decades ago, but only where its price was justified, like in the defense industry or to track the movements of precious pets) are being touted as the applications of an automatic identification and data capture technology named radio frequency identification (RFID). RFID uses low-powered radio transmitters to read data stored in smart tags embedded with minuscule chips and antennae. The tags are attached to packaged goods that can communicate with electronic reading devices and deliver a message to a computer that alerts retailers, suppliers, and manufacturers when a product's state has changed and requires action.
While the potential of RFID technology is indisputable (for example, unlike bar-codes, RFID requires no direct contact or line-of-sight scanning, and it provides streams of data that can be differentiated and interpreted before being passed to an enterprise application), much more is required in moving RFID from a lab to a live environment. RFID has the potential of a new technology inflection point and it can be a missing piece in the long-lasting puzzle of squeezing excess inventory out of supply chains. It will be only this piece, however, when (and if) it reaches a critical mass of adoption and maturity over the next several years. Nowadays, the market is still in a "chicken-and-egg" conundrum—until more companies commit to RFID, the cost of tags and other infrastructure will remain prohibitively high for mass deployment. A few years ago, typical smart-label tags were between $1�$2 (USD) each, while today we may be looking at production volumes in millions, costing 30�40 cents (USD). This is further projected into billions of tags on individual items in the future causing the cost to ideally fall to five cents (USD) or so. Eventually, in the long term, the price might fall to a penny or less, with new technology and even greater volumes. Still, while the tag price might seem as a major barrier now, it will likely become a minor issue down the track, when many companies start grappling with RFID deployments in earnest.
Over that time, many companies will begin to deliver and potentially receive a higher proportion of goods with RFID tags and, thus, they will have a better understanding of the technology and its potential in broader business improvements per se rather than only due to the mandated Wal-Mart, (US) Department of Defense (DoD) or Target compliance. Namely, as the world's largest retailer, with over 5,000 outlets worldwide, Wal-Mart currently uses traditional bar-coding and UPCs (unique product codes) to identify items and cases or pallets of goods as they move through the supply-chain and out to the stores. By 2005, Wal-Mart has envisioned to have live implementations of RFID tagging using new EPCs (electronic product codes, which can carry more useful data than UPCs), with a mandate to the Top 100 suppliers to provide RFID tags on cases and pallets at distribution centers, followed by item-level tagging at a much later date. EPCs on tags should be easier and quicker to read than barcodes, since there is supposedly no need to unpack pallets to check contents, as RFID readers do not, unlike bar-code scanners, require line-of-sight, which should all result in less labor, fewer errors, and better management of inventory.
However, companies implementing RFID should expect increased labor in the first year or so, because vendors have yet to perfect solutions for automating tagging and embedding RFID in packaging material. Also, the current state of RFID technologies would also revolve around label creation and production, plastic chip development, intelligent shelving and packaging, to name but a few. Furthermore, to gain benefits such as product tracking, supply chains should logically begin RFID implementation at the manufacturing level, rather than at the distribution center, which is one step closer to a retailer in the supply chain. Still, "source tagging" cases at the manufacturer is too disruptive for most companies to implement.
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