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Manufacturers go for RFID, but not Linux

Survey: Vendors need to stop selling technologies for their own sake and start to tout the business benefits, according to Datamonitor
Written by Jo Best, Contributor

Manufacturers in Europe and North America are finally getting turned on to RFID — but they're jumping rather than being pushed.

According to new research from Datamonitor, manufacturing execs are keen on the tracking technology and not because they're being forced to as a result of mandates from the likes of Wal-Mart.

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

"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."

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

Manufacturers also listed ERP and "="">CRM systems as key areas of tech spending for 2005.

Most of the technologies that won't be taking a slice of manufacturers IT budgets, however, are those creating most buzz in the industry — Linux, grids and utility computing.

Datamonitor found that 90 percent of IT execs said grid was of no relevance anywhere in their product lifecycles 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 vendor strategies — all too often vendors have been trying to push such technology on their novelty or 'Linux for Linux' 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."

The research surveyed IT decision makers from 150 of the top 300 manufacturers in Europe and North America.

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