Impact of Radio Frequency Identification Technology

The Environment consist of the all elements that are outside the system under consideration, and which it must take as given .The environment also include all the external impositions and constraints other than those imposed by the ownership.

The External environment cannot be ignored otherwise they will cause messy in the information System, in soft engineering mode of enquiry it emphasize a process of enquiry without forgetting external environment factors

The success of an organisation introducing RFID technology into its business depends strongly on a proper analysis of the environment it is operating in, a careful analysis of the environment should be carried out.

Economic impacts

In the retail Industry and manufacturing sector it is difficult to imagine a time when items flowing through a warehouse or distribution center were not automatically sorted using bar code labels. It is possible, however, to imagine how that process could be improved with RFID tags. In this application, RFID tags make a good process better (with the economic impact depending on how "good" the performance of the current bar code system is):

Beyond pure cost reduction, RFID-enabled sorting supports supply chain processes that are currently difficult or impossible with bar code technology. Higher data capacity in RFID tags allows more detailed and flexible sorting. Sophisticated customers sometimes specify detailed palletizing criteria for each order to facilitate cross-docking at their distribution centers. An order encompassing one pallet of facial tissue, another of bathroom tissue, and one of paper towels might require reconfiguration so that the customer receives three pallets, each with a mix of products and each destined for a different store. Data on an RFID tag could include not only to which outbound dock a pallet of towels should be transported, but also how it should be stacked before delivery. It is even conceivable to embed in a pallet tag the destination, contents, and stacking configuration of the pallet for use by the customer. If store conditions change between the time an order is shipped and when it is received, the customer could write different destination information into the pallet tag, or use the stacking information to automatically break and repack the pallet.

Hewlett Packard (HP) was an early adopter of RFID technology and has used the technology to gain supply chain efficiencies. He said that HP began RFID testing in 2002 and has been tagging pallets and cases in response to the Wal-Mart mandate. RFID benefits that have since accrued to HP include the elimination of manual processes for inventory control, decreasing inventory control time, and realization of downstream benefits in areas such as product returns and retirement.

There are also negative impacts, example the issue of Job cuts. If chain stores started to invest in this technology to process purchases, sidelining human check-out operators, then those employees may find themselves out of jobs, and this will have a negative impact towards economy as many people will be unemployed.

Global impact

Now that global standards are emerging in the design and implementation of RFID, businesses that implement RFID will find their products more acceptable globally and supply chain of their products will expand

Social Impacts

Any new technology has social consequences. These are usually seen as side-effects to the actual goals of the technology, and may not be visible for many years after the deployment of the technology. When the social impact of the technology is recognized late in the life-cycle of the technology, it is difficult and costly to make the changes that will mitigate these negative effects. It is therefore preferable to anticipate the social impacts and build safeguards into products early in the development thus saving money and development time.

A primary social concern regarding the use of RFID technology is that of privacy. As RFID tags are added to consumer goods or to items that will be associated with individuals such as identify cards or records, RFID has the potential to allow the tracking of the location and activity of individuals, and the creation of records of this tracking in databases, all without the individual's knowledge.

The scary part of the use of RFID tag is that products bought with an RFID tag on it could all be traced specifically to the buyer just with the help of the tiny chip inside. Many people are already thinking this could potentially become a Big Brother problem.

RFID is not only the harbinger of heavy personal surveillance. It may bring an end to civilisation. The end of supermarket check-outs and their staff may seem ideal for some, but for me it sounds like hell on earth. One of the joys of being a human being with an active mind is the ability to engage others in conversation. An environment which encourages customers to shop quickly and avoid interaction with others further atomises society. We already spend a great deal of our time `entertained by television or video games, avoiding contact with the real world. An end to supermarket staff would only increase our hermit-like status, acclimatising us to a world where real people are not important.

Political Impacts

Politics is a factor that should be considered when an organisation is deploying RFID technology. Issue like privacy will definitely lead various governments to formulate policies and legislation could get in the way of a positive use of RFID technology. It will also led to laws like consumer private protection act being amended to cover more privacy issues of consumers

Technical Impact

Technology is essential for competitive advantage, and is a major driver of globalization. RFID technology has many advantages over the traditional ways of tracking and identifying products in a retail environment. RFID will have a massive impact on the technical side, as the company will need to change the whole infrastructure and capability of their information system will need to be expanded to accommodate RFID transmission data

Impact of RFID on IS Strategy/planning (IT Strategy)

The issues surrounding the hardware implementation of RFID concern the types of tags you are going to use, the environment they are going to be used in and how readers need to be configured. The hardware side concerns number and location of readers, a not inconsiderable investment in some instances. If a store deploys smart shelving, then it will require that short-range readers be deployed to all shelves to be covered. Then they need the infrastructure to transmit data capture to the relevant back-end systems. Such infrastructure could be wired Ethernet or wireless 802.11 to reduce the cabling costs.

To realize the benefits of RFID, IT will need to upgrade its infrastructure in a number of areas, and the interfaces with the business will have to be closer than ever before. There are three areas that will be needed to be addressed: data management, network and end-user device management, and a new category for many IT organizations, sensor management. In addition, tying all these together and integrating them with legacy systems will require a new level of systems integration capabilities.

Data Management

The amount of new data generated from RFID will be enormous. Today's systems and supporting data infrastructure often focus on the latest status or end state of a product, asset or person. To support RFID, this data model must be expanded to capture additional information around and about events: the state before, during and after each step; the people and assets involved; the conditions at the time; and key measurements and metrics. IT will need to decide whether to integrate this additional information into the existing corporate data infrastructure or develop a separate management structure. Business-rule definition and data analysis capabilities must be upgraded, as data and events need to be analyzed as close to real time as possible to provide the intelligence and monitoring necessary to make processes more efficient and avoid or quickly correct mistakes and problems.

Depending on the industry and the business operations affected, the IT organization may find itself pushed toward a more decentralized computing and data management infrastructure than it would otherwise have planned. Finally, data security, privacy and storage will pose new challenges due to the volumes and real-time sensitivities involved, particularly with human track-and-trace applications.

Network and End-User Device Management

A great variety of data extracts and information views will need to be made available throughout RFID-impacted operations. As often as not, the end users of this information won't be at desktop computers, but mobile, requiring deployment of wireless LANs and other remote connections in areas not being addressed today.

In addition, information views will be need to be constructed assuming that a handheld computer, device or even a cell phone will be the recipient's platform of choice for receiving information and providing updates. These compact platforms will require new thinking in how to process a great deal of data in ways that provide essential information to the user yet doesn't filter it excessively, in a readily useable format. For location data, geographical information systems can play an important role in graphically depicting large volumes of information in a concise manner.

Sensor Management

IT organizations will need a new set of capabilities and skill sets to manage the proliferation of RFID readers and tags and to understand the processes within which they operate. To effectively provide sensor management, IT needs to ensure that standards are set for tags, readers and how they are deployed.

Different applications may require different standards on dimensions such as system frequency, read range, passive vs. active tag power, accuracy, reliability, placement, polling frequency and environmental conditions. Maintaining and repairing readers will also be a new capability, and the speed of repair will become an important metric. Also, certain applications will require multiple readers near one another, sometimes resulting in conflicts and troubleshooting delays.

In repair situations, it will be important to have a backup or contingency process in place to ensure uninterrupted operations. IT is the logical entity to take the lead in designing and implementing such processes. IT professionals will need to become much more proficient in business operations then they have been historically. RFID will push IT into many corners of the business where before it may have only been involved peripherally.

Systems Integration

The challenge of tying all the piece parts of RFID together in a smooth and reliable manner will perhaps be the greatest challenge for IT organizations. In many ways, deploying RFID is like deploying a whole new IT infrastructure, with new data sources, processing mechanisms, recipients, network capabilities implemented where none were previously needed and a new category of devices to communicate with and manage. That doesn't mean legacy systems won't be involved. On the contrary, many RFID applications will need sophisticated interfaces and other operations support systems. For example, hospitals will need to interface their RFID systems with legacy hospital information systems, picture-archiving and communications systems, electronic medical record systems and computerized physician order-entry systems.

Perhaps most important, a new level of business-process understanding will be required, and deep operational ties will be needed between IT and the business. IT professionals must fully understand the technology and the business operations to which it will be applied; they no longer have the luxury of being at the periphery of how the business operates.

Potential problems involving RFID (Risk assessment)

Risk is the situation where there are several possible outcomes and the probability of their occurrence is unknown. In deciding on the course of action in strategic management there is an attempt to assess the risk involved, that is the outcome of the alternatives.

All courses of actions carry risks; even doing nothing is a risk. According to Tim Hannagan in his book of Mastering Strategic Management 2002, he explains the risk analysis checklist which can be used when assessing the risk. The risk analysis checklist will involve the following:

Life cycle- Questions of growth and decline in terms of products and service sectors

Substitutes-To the product and service offerings.

Environment factors-such as changing legal, social and economic pressure

Operational issues-in terms of capital resources, staff competencies and management skills

Critical Success factors-identifying exactly what is required for the success of the organization

Evaluation of the worst case situations, contingency plans and consequences of strategic decisions

Ethical and pollution issues-and their effect on the organization

Therefore, the following are possible risk to be taken into consideration before deploying the RFID Technology

Risks for privacy-the debate over RFID technology touches upon many controversial policy issues. At its most fundamental, widespread use of RFID tags could enable corporations to track every move consumers make. Corporations which compile the data transmitted by the tags could determine which products a consumer purchases, how often products are used, and even where the product and by extension the consumer travels. By aggregating data to form consumer profiles, corporations could make inferential assumptions about a consumer's income, health, lifestyle, buying habits, and travels. This information could be sold to governments to create dossiers of individual citizens, or simply sold to other corporations for marketing purposes. While the ability of RFID readers to collect data from tags once a consumer has left a store or moved beyond the readers' range is currently limited, many consumer groups and privacy advocates note that RFID technology is quickly advancing, while measures to protect individual privacy by limiting the amount and type of information corporations can collect about consumers is lacking.

Skills shortage -a lack of qualified RFID integrators has hindered adoption of the technology for many companies. Organisations are already challenged, because many of the skills required for successful RFID implementations are not typically associated with IT staffing. A survey carried out earlier this year by global IT trade association CompTIA of its members found that 80% of companies do not believe there are sufficient numbers of professionals skilled in RFID available for hire. In addition, 53% of companies said this will have a negative impact on the adoption of RFID technology in the next few years.

Network breakdown and software failure- this can be the result of overload (not enough bandwidth), component failure, virus attack, power surge etc. It has the effect of bring down the operation of updating databases with information read from tags. If this happens the company may lose data regarding stock of the products.

Malicious users - There as been many talks about RFID privacy but little is time is devoted to issues like criminal gangs developing devices that could read the contents of RFID tags by just walking past you. Thousands of credit cards information could be obtained in this manner.

To reconcile negative impact of consequences (Conclusion)

There are two general areas where work needs to be done to assure that RFID can be employed without having a negative impact on individual privacy. The first is in the development of the technology itself. With privacy protection as a stated goal, engineering decisions can fulfill that goal. Techniques like encryption, system security, and the ability to easily turn off or "kill" an RFID tag can be made part of the RFID standard. All of these are possible today, but some are considered to be extra features rather than basic capabilities.

The second area is in business practices. Engineering alone cannot solve social problems; ethical practices and education of employees and consumers are effective tools when dealing with the impact of technology on society. Prior to the implementation of any RFID system that may be associated with individuals; a business must study all areas where such an implementation could have an effect on privacy. Relevant laws and statues must be considered, as well as industry or company policies. A statement of principles relating to privacy, the use of RFID, and the use of any databases of consumer information associated with the ID system can both guide industry and provide an opening dialogue with consumers. This work has begun in some areas: the American Association of Publishers has adopted a privacy statement on RFID in coordination with the American Library Association; the Federal Drug Administration's Compliance Guide for RFID use in pharmaceuticals contains requirements relating to privacy. These early efforts will inform others. The essential message is that now is the time to address the privacy issues related to RFID, before the technology matures, before systems and applications are developed, and before business practices are in place. With early planning and the development of industry-wide best practices, RFID can create efficiencies in the supply chain and gain consumer confidence.

The company should also make sure that they have enough skilled labor in the process of implementing the RFID Project, also software and hardware requirements should be taken into consideration as well as the cost analysis before implementation of RFID.