Yenra : RFID : RFID Risk : Assessment profiles of the capabilities and references of consumer product manufacturers who offer implementations

Risk

AMR Research has announced the first appearance of its Risk Assessment Profile (RAP), a new analytical tool that compiles quantitative and qualitative information to interpret risk associated with purchasing IT products and services in a specific industry sectors. The RAP is the first comprehensive analysis of the RFID implementation service providers for consumer product manufacturers. The report examines the top thirteen service providers' expertise in RFID projects and assigns each company a risk score.

"As consumer goods companies enter the final hour to comply with retailer- issued RFID mandates, there will be an all-out scramble to find the best partner," said Kara Romanow, research director at AMR Research. "Although some service providers have more hands-on deployment experience, others have deeper, more complex project skills. Companies evaluating RFID partners will have to weigh their priorities -- a quick compliance fix versus a long-term strategic approach -- and choose accordingly."

Consumer product manufacturers will spend $500M in 2004 on implementation projects, and this spending is forecasted to grow five fold to $2.6B by 2008. Service providers stand to profit greatly from this adoption of RFID technology by consumer products manufacturers, with top firms claim over 90 percent of these implementation projects.

Each of the service providers was evaluated based on four Service Attributes: domain expertise, delivery expertise, referenceability, and internationalization of offering, as well as four Company Attributes: business strategy, financial strength, customer practices, and company-wide international capabilities. Leaders like IBM and Accenture demonstrated capabilities that scale because both staked claims in RFID early on and became involved with more complex projects with larger Consumer Products companies.

However, AMR Research found that no service provider could be considered "low risk" due to the general lack of experience in this early stage of development. The analysis also cautions that consumer product companies will incur greater risk if they view RFID implementations as short term compliance issues and not long term strategies.

RFID is a top initiative for service providers: eleven of the thirteen providers place RFID in the top five of their strategic initiatives, and twelve providers responded that executive level commitment is considered "strong."

Service providers can be divided into three groups: proven capabilities that scale; fewer proof points, but strong referenceability; and solid consumer products supply chain expertise but no paid RFID engagements.