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VDC Survey: RFID decisions being made at the ops level; respondents will triple RFID spend in 2010

There are some interesting changes occurring when it comes to buying patterns for RFID technology. Long considered an IT decision for many enterprises, more and more buying decisions are being made by operations executives.

In his annual survey on RFID operations, Drew Nathanson, practice director at VDC Research, notes that 19 percent of corporate influencers are now at the operations level. That number is up dramatically from 9 percent a year ago. Almost one-third of buying decisions are still made within IT, while 11.3 percent of decisions are made at the C-level, a number which is also dropping.

But clearly, the RFID spend is diverting from the IT department.

“That shifting to operations is huge,” says Nathanson. “This used to be about IT and how are we going to support this new data collection tool and what do with all this information? Now, the strategy has shifted to firm’s knowing they can support RFID in their infrastructure, so what are they going to do with it and who is going to run it and make sure they get the right solutions that provide the best overall return. And that falls to the ops people.”

Nathanson says that most CEOs and high-level execs are basing decisions on the recommendation of their manufacturing ops people, as long as IT can support the technology. In addition, 17.9 percent of corporate influencers are in the logistics/distribution/shipping and receiving area. In addition, most decisions re mad eat corporate headquarter locations.

In May, Nathanson revealed that the mostly tier one firms in the survey spent an average of $1 million apiece on RFID technology in 2009. This year, that number is expected to grow to an average spend of $3.5 million per company, as firms expand the technology out to their entire value chain.

“That’s a tremendous uptick,” says Drew Nathanson. What’s more impressive is that the same group of companies expect to spend almost $7 million apiece on RFID in 2011.

CORPORATE INFLUENCERS
Executive (CEO, President, Owner, SVP, EVP …) 11.3%
Manufacturing/Operations 19.0%
IT 32.7%
Logistics/Distribution/Shipping & Receiving 17.9%
Quality Control/Quality Assurance 2.4%
Security 7.1%
Compliance 3.0%
Product/Project Directors/Managers 6.5%
Other (Specify) _____________) 0.0%
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