Finding the Role of Time Lags in Radio Frequency Identification Investment

Radio Frequency Identification (RFID) is a highly beneficial technological advancement which could eventually change the way of doing business. However, the difficulty in assessing the potential benefits of RFID has been delayed RFID related investment decisions within organizations. Especially, time lag, or payback time from RFID investment, has been one of key barriers in RFID investment. This study provides a conceptual framework for time lags in RFID to enhance the understanding of RFID pay-offs. Time lags are determined by IT type and a firm’s IT capability. Therefore, it takes longer for firms to realize the value of RFID since it requires more efforts and changes to implement and utilize. Also the expected time lags of RFID may be modified by the level of IT capability of each firm. The stronger IT capability the firm has, the shorter time lags the firm experiences.