Finding ROI with RFID
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The use of RFID technology in the field of IT asset management is growing quickly. But with that growth have come important questions about its application, accuracy and – perhaps most of all – its cost effectiveness. This Webinar will show you how get value from RFID without breaking the bank.
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Finding ROI with RFID
- 1. Finding the ROI Sweet Spot with RFID Presented by: Tom Watson, AMI President & CEO November 1, 2012 A recording with audio of this webinar is on our website.
- 2. Tom Watson Tom Watson President & CEO of Asset Management International © 2012 AMI 2
- 3. AMI – Product & Customers © 2012 AMI 3
- 4. RFID Radio Frequency Identification Exploding in popularity © 2012 AMI 4
- 5. Applications What effect will it have on ITAM? © 2012 AMI 5
- 6. Size and Cost Costs and sizes are shrinking © 2012 AMI 6
- 7. Poll #1: What asset tracking technologies do you use today? - Manual - Barcode - Passive RFID - Active RFID © 2012 AMI 7
- 8. RFID Tags – Passive vs. Active Use both barcodes and RFID © 2012 AMI 8
- 9. RFID Readers – Fixed Placement Fixed readers © 2012 AMI 9
- 10. RFID Readers – Hand-held Portable readers © 2012 AMI 10
- 11. Defining Requirements Location Granularity = Cost © 2012 AMI 11
- 12. Portal Readers Portal readers work for data centers © 2012 AMI 12
- 13. Rack Level Location Tracking Less practical at rack level © 2012 AMI 13
- 14. Case Study Compared costs © 2012 AMI 14
- 15. Baseline Labor costs were estimated at $300K per year via barcode © 2012 AMI 15
- 16. Active vs. Passive Implementation Costs Using Active RFID to 8x rack level 8x or More! © 2012 AMI 16
- 17. 3-Year Total Cost (30K assets) Active RFID w/Barcode TECHNOLOGY APPROACH Passive RFID w/ Barcode Barcode 5 Manual $0 $700,000 $1,400,000 $2,100,000 $2,800,000 TOTAL COST Labor Tags Hardware Implementation © 2012 AMI 17
- 18. Three Year Cost Comparison Active Model: $2,580,000 Passive Model: $580,000 © 2012 AMI 18
- 19. 3-Year Return On Investment Sweet Spot $4,000,000 RETURN ON INVESTMENT (ROI) $2,000,000 $0 $-2,000,000 $-4,000,000 Start 1 year 2 years 3 years 4 years 5 years Active RFID w/ Barcode Passive RFID w/ Barcode Barcode © 2012 AMI 19
- 20. Other Dividends Lifecycle Speed and Accuracy © 2012 AMI 20
- 21. Summary Passive RFID is the smart strategy right now. • Lower initial cost • Fast return • Greater three-year savings © 2012 AMI 21
- 22. Questions? © 2012 AMI 22
- 23. Getting More Information • Web: amitracks.com • Phone: (877) 297-7618 • Presenter – Thomas Watson: tom.watson@amitracks.com – President & CEO, Co-founder © 2012 AMI 23
Editor's Notes
- TOM: Thanks for joining this webinar. It’s a brief but important one about achieving thegreatest return on investment with RFID technology, as it relates to IT assetmanagement.
- First just a brief note on my background and my company Asset ManagementInternational, or AMI. I’ve been in high tech for sixteen years, most of it spent in the fieldof IT asset management. My business partner Ken Suzuki and I founded AMI in 2003.
- AMI’s main product is called AssetTrack, which commonly integrates andenhances IT asset management systems from HP and CA, as well as virtually any inhousesystem. AssetTrack is utilized successfully by many medium to large enterprises,a few of which you can see here. I’ll include relevant links at the end of the presentation.Now, on with the webinar...
- The use of RFID, or Radio Frequency Identification, is exploding.
- EZ Pass TollsKeyless Entry SystemsCredit CardsIt’s been around, but what we’re concerned with is the impact RFID is having on IT asset management.
- To date, the size and cost of RFID tags, software, and overall implementations for IT asset tracking has been to costly to be justified against its return on investment. The RFID tags that work with IT equipment are getting smaller and cheaper to a point where it can generate a return, if done the right way.
- Before we begin, want to poll. Luanching now. Will share results later.
- There are two types of RFID tags and readers: Passive and Active – Active tags are powered, have a much longer read range, and cost ten or more times as much as passive.There are a lot more tag types than this, however, for metal applications like data centers, you must use tags that work on metal surfaces. Also, we always recommend using barcodes as well as RFID.
- Once RFID tags have been placed on inventory, we used readers to identify them.Readers come in two forms, fixed placement readers, as we see here…
- TOM: …and manually operated hand-held readers that include barcode scanners.
- Before you can begin evaluating costs, we must understand how accurate we need location information to be. That is what drives the cost model.
- If you need to track in or out of a building or data center, fixed position readers can be put in to automate that for a reasonable cost.
- Tracking to the rack level is a different ball game. You need a lot more automated RFID equipment to be that precise.
- Our case study is based on an implementation at Fortune 500 financial institution with 13 data centers, about 30Khardware assets.In this case, tracking assets to the rack location is a requirement for our client.The client does not need to track U-position. Once the tech gets to the rack, it’s easy enough to identify the asset you’re looking for.So given that we have to track to the rack, we compared the costs of using various RFID technologies, and came to some easy conclusions.
- Let’s see how that worked out in a real world situation. We were asked to puttogether cost projections for a large bank, comparing a fully automated system with onethat combined RFID readers at portals with the use of handheld readers.
- In fact, at current and even anticipated prices, extending RFID readers to the racklevel can easily cost 8 times as much as a portal system alone. Furthermore, the “rack locater” technology that’s required to get to the rack level is untested.
- Well, yeah, but you still have labor with Active RFID in terms of auditing solution. When we did the math, to really find how much savings, we came to
- TOM: In the roll-out year, the fully automated system is over $3 million more expensive.Now, I can hear you saying, “but Tom, what about labor costs? Hand-held readers meanpeople – with hands performing labor”
- Even with the cumulative cost of labor, we found that a hybrid RFID solutionusing fixed portal readers augmented with handheld readers would save the bank overMore money than Active RFID over the three year period, as far out as we feel comfortable estimating.We project the Active RFID solution to catch up to the Passive RFID eventually, but the time horizon is too far out.
- In this case we’re just talking about data center audits. Using passive RFID will improve accuracy of other asset tracking activities including receiving, inventory tracking, and retirement. We haven’t yet modeled out the savings in those areas.
- So, in summary, we have a host of advantages associated with implementationof a hybrid IT asset tracking system exploiting the key advantages of both fixed positionand handheld readers. While active RFID is promising, we’ve determined the cost is too high to implement today.Based on the progression of Active RFID technology, we project costs to begin to come down over the next few years, at which point a fully automated system may make sense.Just not today.