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Banking industry expects to receive pre-tagged IT assets by this spring

1/5/09 | John R. Johnson | email

The banking industry is quickly moving toward adopting RFID technology to track IT assets, and expects to start receiving assets pre-tagged with passive RFID tags by late March or early April. Major banks and IT vendors like Sun Micro, Dell, IBM and HP all participated in a meeting with bank executives late last month, where RFID numbering requirements for IT data center assets were unveiled. The meeting was hosted by the Financial Services Technology Consortium (FSTC), which has been studying RFID for the last year.

"We really strive to effectively manage and control all of our internal assets, and by removing as much of the human element as possible, it's a win-win for everybody."
Mike Russo, Wells Fargo

After a follow-up meeting in Florida in March, the hope is that IT vendors will be ready to start tagging items like servers, routers, blades, storage devices and other high-tech equipment at the point of manufacture. The requirements for the numbering system have been distributed to IT vendors, who are expected to offer their feedback on the proposal this month.

Mike Russo, senior vice president of Automated Identification Technologies at Wells Fargo, says that his firm has already tagged about 40,000 of the IT assets it owns. He looks forward to the day that goods arrive pre-tagged, noting that the tagging initiative could impact well over 100,000 IT assets at large enterprises like Wells Fargo. Banks that chose to tag items like storage tapes as well could add several hundred thousand more items to the initiative.

"We really strive to effectively manage and control all of our internal assets, and by removing as much of the human element as possible, it's a win-win for everybody," says Russo.

Russo says there are several advantages to receiving IT assets pre-tagged. For starters, "the assets are already tagged so that we don't have to affix tags and log that data manually when we first receive the assets. So there is a level of automation that occurs right away because they already have a tag attached to them."

In addition, pre-tagging also provides the ability to track assets before they arrive at banks by tracking advanced shipping notices (ASN). "We know when the assets will arrive and we know their tag IDs, so we can pre-stage assets in our asset system. When they show up on our loading dock, that automation now takes the next step — we know what they are and that they have been received and we can trigger back end systems that track receipt of goods, start depreciation cycles, billing and accounts payable. All that can be automated instead of occurring manually."

Last summer, HP launched its Factory Express RFID Service to track critical data center assets such as HP factory-built servers, storage devices and rack enclosures. For a fee of between $5 and $10 per RFID tag, HP tags equipment at its factory so customers can monitor the equipment as soon as it is received at their facilities. (see Issue 0208 at rfid24-7.com). However, the actual cost to banks -- which buy in huge volumes -- are expected to be much less. In some cases, the cost could be absorbed in the purchase price of the asset.

Daniel Connolly, of ODIN technologies and the project manager for FSTC, says that Wells Fargo and Bank of America are both leaders in the initiative. "Citigroup was not present at the meeting but they are very much an early adopter in RFID for IT asset tracking as well," says Connolly. "The numbering schema that they are looking for will allow them all to have a standard and ubiquitous tagging methodology. That is very important because of acquisitions in particular. With all of the consolidation taking place in the financial services community, all of those IT assets -- and quite a lot of them are procured by that industry -- now change hands and ownership."

The numbering requirements are based on the EPCglobal Electronic Product Code (EPC) and the GS1 Global Individual Asset Identifier (GIAI). The RFID basic functional requirements and number requirements, documented by the FSTC project team, are now available on the FSTC web site at www.fstc.org. The project has a goal of assisting all data centers, not just those within the financial industry, with creating a process that will reduce the time required to inventory IT assets. The implementation of RFID technology allows the entire inventory process to be automated from cradle to grave, (ordering, receiving, installation, maintenance, and removal and destruction), thus increasing accuracy, reducing labor and providing real-time location capability.

"Establishing a standard method of RFID tagging IT assets enables any data center to take advantage of improved inventory and business processes," Bill Conroy, senior vice president and infrastructure optimization executive at Bank of America, said in a release. "We … know that the savings are significant. Server, router, storage and other hardware suppliers that comply with the FSTC standard will be rewarded with a larger share of our orders. We will use the EDI capability to request RFID tag number pre-notification in advance shipping notification. This will automate data entry and dramatically reduce process time and effort associated with new IT assets."

The banking industry could set a standard for other groups with large IT assets, such as the insurance sector, manufacturing and the federal government.

"We believe this is harbinger of good things to come for the RFID industry as a whole," says Connolly. "As industries like financial services take RFID seriously, that will only cause other industries to take note. Given the fact that IT asset tracking is horizontal and touches all industries, it will help move more people toward this solution."

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