RFID could boost compliance effort

Storage Expo: Companies struggling to keep onside with compliance regulations could make their lives easier by introducing electronic tagging

RFID tags could help US and UK companies to win their battle with compliancy, consultancy firm Cap Gemini Ernst & Young said on Wednesday.

In his keynote speech at Storage Expo 2004, Capgemini Group chief technology officer Andy Mulholland said that retail and supplier firms are already adopting the technology because it can produce a seamless audit trail of goods.

"They say that one-third of trade in the 10 largest UK retailers and suppliers takes place between [those companies]," said Mulholland. "Because each RFID tag has an individual ID, you can take a lot of the cost out of administration and account for every tag. There is a payoff because it will add compliance and cost reduction."

Compliance regulations are a challenge to many businesses, Mulholland said, adding that most organisations will follow the US regulation Sarbanes Oxley as a benchmark for compliance.

Sarbanes Oxley, like other compliance regulations, requires businesses to keep a record of all electronic transactions and communications for up to seven years. Under the regulation, auditors can demand specific data to be delivered within 24 hours. Chief executives and chief financial officers are even liable to go to jail if a company's auditing practice is discovered to be shady.

Sanjay Kumar, the former chief executive of Computer Associates, was last month charged with securities fraud, conspiracy and obstruction of justice after an investigation into allegations that he failed to provide sufficient data to auditors.

Mulholland added that compliance could also be used to improve business practices.

"The side effect of this is that business intelligence is coming back. Why not use the data I collect to see how I do business? When you see how businesses exchange data, storage becomes the key to producing a more secure model too."

One unnamed bank has even set aside a budget for future fines because it was unsure it could retrieve its data within 24 hours, Mulholland said.

Mulholland also said that a French car manufacturer "beginning with the letter P" was using RFID tags for tracking cars while they were built. He said the technology had sped up the process of tailoring cars to customers' requirements. He added that the tags were taken off the cars before sale because of consumer concern over the technology.