Survey: Tagging tech gets to work

Manufacturers are getting sophisticated in their RFID projects. In other findings: They won't do Linux just because it's Linux.

Manufacturers in Europe and North America are finally getting turned on to radio frequency identification technology--and they're jumping rather than being pushed.

According to new research from Datamonitor, manufacturing executives are keen on the tracking technology because of its merits, not because they're being forced to use it as a result of mandates from the likes of Wal-Mart Stores. The research is based on a survey of IT decision makers at 150 of the top 300 manufacturers in Europe and North America.

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With 60 percent of manufacturers surveyed already working on RFID projects, the sector is now unexpectedly sophisticated in its deployments, said Richard Clifford, an analyst with Datamonitor and author of the report.

"We were quite surprised by the level of advancement," he said. "There's still a fairly significant proportion focused on compliance with Wal-Mart and things like that...(but) a lot of the manufacturers we spoke to were looking to move it on a level beyond slap-and-ship."

About 90 percent of manufacturers surveyed said their next RFID project will be based on systems and data integration. Clifford added that the "immaturity of the technology and the immaturity of the standards" is the main inhibitor to adoption.

Other key areas of tech spending for manufacturers in 2005 included systems designed to assist with enterprise resource planning, or ERP, and customer relationship management, or CRM.

Some of those that are creating a good deal of buzz, however--like Linux, grids and utility computing--won't be taking a noteworthy slice of manufacturers' IT budgets.

Datamonitor said that 90 percent of IT executives surveyed said grid computing was of no relevance anywhere in their product life cycles, and 80 percent say that utility computing is of no use in resource planning or supply chain execution.

Clifford said the lack of interest can be explained by company strategies. All too often vendors have been trying to sell such technology on their novelty--for example, "Linux for Linux's sake"--rather than selling it on the business benefits.

Such technologies "are not catching on because there's no dovetail there," he said. "Vendors need a rethink...putting less emphasis on the particular type of technology and more emphasis on solving the business problem."

Jo Best of reported from London.

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