A Slow Take-off

What started out as a technology used in World War II by allied forces to

distinguish friendly fire from enemy fire has made a worldwide resurgence.

Indian software companies are at the forefront of developing expertise and

business services in the field of Radio Frequency Identification (RFID). RFID is

slowly finding takers across sectors like retail, transportation, pharma,

manufacturing and processing, and security. The technology got a boost with US

retail giant Wal-Mart stipulating that its top hundred suppliers be RFID

compliant at the pallet-and-case level by January 2005.

The worldwide RFID implementation and integration market is worth $1.2

billion.

To tap into this lucrative niche, Indian software majors like Infosys, Wipro,

PCS and Satyam, who are also part of the EPC (Electronic Product Code) Global

consortium, are playing an active role for international clients-developing

middleware, enterprise applications and services that could be integrated with

hardware.

In

July this year, Wipro opened India's first RFID-enabled apparel store on its

campus in Bangalore to showcase the technology to its clients. The company

offers RFID consultancy services, systems integration and research and advisory

services. It has also brought out an RoI calculator, which helps customers

understand the benefits of implementation. Most of Wipro's customers are

retail clients based in the US and Europe.

Hyderabad based Satyam is also into the RFID solutions space. GB Prabhat,

director-consulting and enterprise solutions, Satyam, said, "An RFID

application in real life industry does not stand by itself. It needs to talk to

other applications or software in the company like an ERP, an SCM solution or

warehouse management solution. That's where we come in." However, it is

still early days in the evolution of this technology. According to Prabhat,

"Most of Satyam's clients, as well as the industry as a whole, are still

only testing the RFID waters. Most of these companies are in the pilot phases of

RFID adoption to understand the implications of the technology and work out its

business benefits."

Standards Confusion



As with most emerging technologies, a worldwide consensus is absent on the

frequency standards used for various applications. The US and North America

operate on the 915 MHz frequency (UHF); Europe operates on UHF as well as a

different frequency range; Japan on the microwave (Gigahertz) range, while Asia

works with still another range.

"In India, one has to get a special license from the Wireless Protocol

Commission (WPC) to use the 915 MHz range and therefore these readers cannot be

imported easily into India. Regulations such as these need to be standardized to

enable popular adoption," informed Prabhat. Moreover, there has not been

any explicit allocation of spectrum in the context of UHF RFID in India.

India's Turn?



So could India Inc. leapfrog into RFID and reap the benefits of the

technology and the expertise of Indian software companies in this field? Not

very soon, reckons UB Pravin, senior VP and head—retail, Infosys. "India

has just started using bar codes, and most of our enterprises have not embraced

IT as a strategic tool for competitive advantage," he said. However, this

reluctance could change if export mandates come into play. "Indian export

houses would be compelled to use RFID owing to the mandates in place by large

retailers like Wal-Mart, Metro AG, and Target," said Pravin.

Prabhat, however, disagrees with this, saying, "From the Indian industry

point of view, the Wal-Mart mandate will not have a significant impact. However

the spin-off effect of the mandate has led to this technology being in the news

often and hence companies have started taking interest in this space."

Pharma heavyweight Ranbaxy recently announced that it had implemented RFID in

view of the Wal-Mart deadline. Other companies are expected to follow suit.

Prabhat opined that, knowing the conservative IT spending trends in the

industry, Indian companies would go in for RFID only if they are convinced that

they will get an RoI that they are comfortable with. "We expect RFID

adoption in India to take place in a phased manner rather than after a dramatic

fashion," he added.

In the final reckoning, then, Indian industry hasn't been all too

enthusiastic in taking to RFID, favoring instead a wait and watch approach

though in terms of technology development, pioneering spirit hasn't been

wanting.

Priya Sreenivas/CyberMedia

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