Time value of information: A new approach to measuring the visibility of RFID systems

Abstract

RFID technologies are conceived as an enabler of the innovation of the next generation logistics, which have high potentials and possibilities. The RFID technologies have already been implemented in a variety of business areas. More and more companies that want to renovate their business processes are paying attention to the technologies. However, there are ongoing issues on the return on investment (ROI) of RFID implementations in many business areas. Existing methodologies for the ROI analysis of RFID technologies have limitations in quantitatively evaluating the impact of the RFID implementation on business processes. As many experts expect, RFID will be adopted by many organizations in a variety of business domains. Therefore, a new method for quantitatively measuring the effects of RFID implementation is urgently needed to promote RFID adoptions. In this paper, we suggest a new analysis method based on the concept that the potential value of information is affected by time. In addition, as an application of the new analysis method, we present a scheme for quantitatively measuring the visibility of RFID systems using the time value concept of information. Hopefully, the time value concept of information proposed in this paper could be extended as one of general quantitative analysis models for measuring the utilization value of information systems in the future. © 2008 IEEE.