Unpacking the RFID Investment Decision

Mandates aside, there are many reasons why firms decide to move forward with or delay investment in radio-frequency identification (RFID) technology. In this paper, we use a theoretically-based, easy to implement methodology to empirically derive a relative importance scale of those factors that influence the decision to invest in RFID technology. More specifically, we compare the factors that matter most and least to a sample of firms that have adopted RFID technology with a sample of firms that have yet to embrace RFID technology. The theoretical and practical implications are that both RFID adopters and nonadopters are driven by the promise of greater data accuracy, improved information visibility, service quality, process innovation, and track-and-trace capabilities. What separates the adopters from the nonadopters is an opportunity to derive strategic benefits from RFID through improved decision making. Not surprisingly, the nonadopting firms are primarily concerned with the high acquisition and other ongoing costs associated with RFID technology.