City Healthcare, a medical device manufacturer, was considering investing in RFID technology to replace its barcode system. While RFID was more costly initially, a cost-benefit analysis found it would provide financial benefits through increased profits, efficiencies, and cost savings over time. Non-financial benefits included improved inventory management, quality control, and regulatory compliance. Risks included issues with technology standards, security, and high initial costs. The report recommended implementing RFID to align IT and business strategies and help City Healthcare remain competitive through improved processes.

1. THE BUSINESS CASE FOR INVESTING IN RFID
Information Technology value realization
1/13/2012
Bangalore Management Academy
Eyadema Simplisse Iyanos -10258454

2. Table of Contents
1.0 BACKGROUND OF INFORMATION ....................................................................................... 3
2.0 EXECUTIVE SUMMARY .......................................................................................................... 4
3.0 ANALYSIS OF INVESTMENT OF RFID .................................................................................. 5
3.1 Financial benefits and costs ...................................................................................................... 5
3.1.1 Profits centre ..................................................................................................................... 5
3.1.2 Investment centre .............................................................................................................. 5
3.1.3 Service centre.................................................................................................................... 6
3.1.4 Costs centre....................................................................................................................... 6
3.1.5 Fixed costs ........................................................................................................................ 6
3.1.6 Variable costs.................................................................................................................... 6
3.2 Non-financial benefit and cost .................................................................................................. 7
3.3 RISKS involved ....................................................................................................................... 8
3.4 Organisation change impacts .................................................................................................... 8
3.5 Impact of not doing anything ................................................................................................... 9
4.0 RECOMMENDATIONS ............................................................................................................. 9
5.0 LIMITATIONS ......................................................................................................................... 10
6.0 REFERENCES .......................................................................................................................... 11

3. 1.0 BACKGROUND OF INFORMATION
City healthcare is service oriented, manufacturing medical device supporting hospital. City
healthcare is amongst big company in New Zealand on top tenth with 830 employees, is
operating globally in four continents (Australia, USA, Europe and Asia) company sales
products to 90 markets across the world, their products was only identified by barcode, but
management want to use RFID because IT value realization, company foray in innovation
technologies of medical devices and other accessories required by hospitals management
such as respiratory modifier system, neonatal care, operating rooms etc. Company has been
achieved sales of $ 241 million per year. City healthcare approximately uses 7 % of revenue
in R&D which helping them boost up product improvement and come up with new product
mainly focusing in new technology medical applications in order to expand network sales as
well as gain IT realization.
The lack of integration supportiveness as barcode company decided to shift to RFID
implementation but there are some issues related to RFID such as standards of (FDA) rules
and regulatory of selling their products, and cost perspective, moreover the functionality of
RFID and potential benefits, technology realization the company decided adaptation of RFID
competitive advantages of using RFID can be found in supply chain business process (Singh
& Lai, 2007)Treatment medical device is high value product as result must be manufactured
carefully in adequate manner followed by traceability, tracking across three tied supply chain
all these activities are involved RFID supportive. By manufacturing product with Unique
Identified records have been makes easily for tracking and tracing the products and test data
record in the supply chain. This tracking and tracing helps to control, manage and monitoring
the flow of material, RFID helps identify and correct error as well as increase business
operational efficiency with error free

4. 2.0 EXECUTIVE SUMMARY
City healthcare is manufacturer medical device treatment is based in New Zealand and has
offices of sales almost across the world about five continents the company wants to
implement new technology shift from barcode to RFID system the reason is being able
managing its high value product at the same time for tracking and tracing that product. They
believe that the IT strategy and business process strategy can increase business benefits from
investment while gives an opportunity improve operation efficient while decreasing costs,
brings more IT innovation, matching IT alignment with business strategy in order to meet
business objective and vision.
RFID system implementation City healthcare found that is costly compare to barcode but due
IT value realization the company decided to replace barcode with RFID system in order of
managing inventory, tracking and traceability high value products, assets management, test
runcard, disseminate information with suppliers and customers as well as across entire City
healthcare and many more tangible and intangible benefits from IT realization. Cost benefits
analyses was conducted due to analysis return investments when RFID adopted, there are
some issues of RFID system but much more are benefits from it, consider the medical devices
treatment which is more important due to take care person‘s life. Based in financial
investment perspective City healthcare analysed what business analyst called” high Risk and
rewards investment”.
The problem involved in the city healthcare medical devices is that the barcode was not
meeting the requirement based that facts was negative IT value realization, the negative
effect caused dissatisfaction of customer and lost quality of products, negative business
operation items of efficiency and effectiveness of business operation during assets
management, manufacturing treatment, and performance of company’s software applications,
after integrating the RFID the supply chain management in the factory, IT strategy and
business strategy met the city healthcare expectations. (Journal of Cases on information
Technology, 2008)Value of RFID system is only realized when IT solutions and business
service oriented implemented strategically; business process automation brings more benefits,
high productivity in such way that efficiency and effectiveness is major key performance
indicator of business process optimization.

5. 3.0 ANALYSIS OF INVESTMENT OF RFID
City healthcare, have been realized the benefits which can gain out of investment in
automation and data collection “RFID realization” even though there are some issues of
implementation and adaptation of RFID some are standards and procedures, costs and
security moreover the project is straightforward to understand that matching business strategy
and IT alignment is key success criteria for achieve organisation vision, mission and
objectives. RFID realization is the processes of changing the way of supply chain
management operate which can be initialized in daily basis operation such as IT enabling
processes information faster, reliable, efficiency and effectiveness at lower costs than
barcode. To analyze RFID investment can be evaluated using RFID benefits framework
which included, workflow management initialization of automation support, identification
asset location using automation identification, portability asset management, patient safety
application and quality assurance application of RFID.
3.1 Financial benefits and costs
Cost/benefits analysis can give clear image of City healthcare by managing and scrutinizing
what was going on the ground items of investment measured. RFID value can measured
using IT scorecard which involved four dimensions such as; user orientation, operational
excellence, business contribution, and criteria success factors. The RFID value realization in
City healthcare may came out positive benefits by increasing customer satisfaction, increase
market share and improve operation efficiency and many more. There are 4 components of IT
value centre which are costs, profits, investment and service centre.
3.1.1 Profits centre
In the case scenario illustrate that there were a lots of functionalities which barcode was not
deliver service required in the City healthcare in order to improve productivity RFID was a
solution to carry out the complexity and understand operations and functionalities required by
City healthcare items of business strategy alignment, this is typical good demonstration to
clarify the IT benefits by maximizing opportunity while diminishing costs and enabler of
creating new opportunity.
3.1.2 Investment centre
The one most important is IT value realization of how much will spend and how long period
will return on investment, City healthcare after realizing the value of RFID as IT based

6. business opportunity initialized to invest into innovation technology will help the business to
have more capacity of deliver the product to market at reasonable time, within budget at the
right destination by using RFID and this will be long term of City healthcare being
sustainable by gaining core competency and competitive advantages to the market.
3.1.3 Service centre
IT enabled business capacity to support current business strategy, City healthcare when
implemented RFID met product quality, process and checking to ensure safety of the product
and efficiency furthermore met standardization of (FDA) and ensure flexibility value of IT
infrastructure platform, in order to validate equipments, secure retention of products, and to
understand the varieties of IT business security issues within City healthcare, satisfy the
stakeholders and meeting shareholders expectations.
3.1.4 Costs centre
Investments and costs in city healthcare system happened one of the whole life such costs
included machinery, IT infrastructure, setup networking ,installation of software packages
including supply chain, testing which must be accurate in order to increase operation efficient
while minimizing cost, therefore will enabling to increase profitability of City healthcare.
3.1.5 Fixed costs
These kinds of cost can be described as Total cost ownership processes such as applying tags
to the assets of City healthcare other examples are machinery, and programming code, which
will be purchase, implementation, maintenance and operations costs “end life costs”
3.1.6 Variable costs
The cost can be seen as labour, material, and other related RFID technology development
change over time, in this can be elaborated as software integration and testing, updating
software and network into each new system which varies depend upon tracking and
traceability which must be applicable in a certain products.

7. 3.2 Non-financial benefit and cost
The non-financial benefits in City healthcare measured in items of qualitative as intangible
benefits related organisation and customer perspective as whole. Non financial benefits and
indicating as adding value into City healthcare such way that the customer being satisfied,
high value delivery product/ services to the end user, therefore customers services is more
accurate in this case can be qualitative measured as improving customer service, reduce error
rate and improve City healthcare image at the same time reduce overhead cost. (Yahia, 2001)
RFID technology is asset management solution, is being able to integrate some of
applications in City healthcare being help to utilize supply chain application software. RFID
tagged data storage and is planned to extend technology and interoperability in a way of the
global scale. The FRID is providing unique tagged items of tracking and tracing
products/items which bring result of operation efficiency and effectiveness way of
monitoring and controlling flow of product, (Yahia, 2001) furthermore works in real time
rapidly capture data and has large data storage. The RFID system is demonstrating the vast
array of non-financial benefits through the organisation who willing to implement and adopt
RFID. Healthcare manufacturer and largest retail have been established RFID integration
with various application technologies to help them into laboratory test (Andrews, 2006)
RFID system allow a large storage, tags which allowed for sales tracking and tracing,
automating inventory replenishment and daily use inventory checkouts (Eduard, 2004) RFID
in healthcare continued to provide the abundance of non- financial benefits/costs such as
reduce labours cost, simplify business procedures, improving inventory control and
improving productivity and turnover. The three core benefits uses RFID in city healthcare
manufacturer are; inventory accuracy, shelf replenishments and inventory visibility, tracking
and traceability of portability assets. Furthermore non-financial costs/benefit involved time
saving, in such way that of increasing operation efficiency
RFID system in city healthcare manufacturer is considered as “top priority” based on
tracking and tracing products and is being connected to the internet, and supply chain which
allowed the business function to work together and managing automation business process,
and automation workflow management rules. RFID system can be considered as IT
alignment with business process management strategy because RFID system and supply
chain application should be able to transform of ways of business being contacted by
improving supply chain efficiency.

8. Trace and tracking capability of inventory by monitoring stock getting more information
related products stored date, serial number, date manufactured and date of expiration and
monitoring the movement of stock. Being able read and write, update the modification of
existing information, RFID system in City healthcare considered as suitable devices
realization which had many potential benefits than barcode like field reading, capability of
storing many data summarized benefits such as (i) overhead cost reduction (ii) reduction and
minimize errors rates (iii) improve customer services (IV) improve City healthcare image
include customer satisfaction and add value products /services (V) RFID is used in
emergency of operation or lab test products (VI) RFID Detect damage of the product and
expiration date thus it can be removed from the stock using (FIFO) RFID is friendly
environment automation can read independently aggressive environment such as fire, ink,
noise, and different temperatures (Journal of Cases on information Technology,, 2008)
3.3 RISKS involved
Person’s life is top priority important than anything else therefore there will be a great risks if
there is any incident related City healthcare product which is not fully tested and thus given
an example from the case indicate that “obstructive sleep apnoea is life threatening disorder”
this is great risk to end consumer.
There are some risks associated with manufacturing product as catastrophic which might
happened during manufacturing medical devices or when it’s involved in incident or any
other unwanted publicity therefore each medical device treatment manufactured must be
released with individually label regulatory bodies (FDA)
Lack of security, and also RFID system had problem of security itself.
3.4 Organisation change impacts
The decision making of city healthcare was done in order to provide high quality standard of
medical devices treatment and improve business process capability, such way that to attempt
to deliver high value product. RFID system has potential benefit for conducting business, and
enabler automation of the runcard as well as improving manufacturing line.
The city healthcare expands IT/IS strategy alignment point of view the IT infrastructure and
internal supply chain connected together with manufacturing line which enabling
“traceability upstream” suppliers and manufacturing department linked dynamically as well

9. as sales office and customers using high business service oriented technology by increasing
world class business process and competitiveness advantages.
3.5 Impact of not doing anything
According to Jupiter research, bad service has resulted in 91% turn off in the IT service,
without business process optimization City healthcare can’t survive in the competitive
market, therefore to adopt the business service oriented is a way of maintain its core
competency, since barcode has limit capability and need human intervention is not fair to
keep track of utilise it, RFID can perform business process in automation way its implement a
clear insights of adopting IT strategy and business strategy is only way to compete and
survive on the market otherwise the failure of innovation may make them close.
4.0 RECOMMENDATIONS
City healthcare if decided to implementing new technology which enhance business process
operations and complex management has to choose right decision in order to match IT
alignment strategy and business strategy so that organisation can make improvement
responsiveness to the customers both from externally and internally organization while
increase efficiency by decrease cost in entire organisation stakeholders.
Before taking action of implementing new technology like RFID is recommend that R&D
should happen in order to identifying, and understanding failure and overcome failures in all
aspect to make a successful value of technology, implementation must meet the required
innovation technology.
Most wanted during implementing RFID system implementation must awareness with
security/privacy issue of the IT user and shareholders must be involved.
Standardization of equipment treatment device must be on top of awareness this will make
organization to respond quickly to market and gain lifespan of high value.

10. 5.0 LIMITATIONS
 Lack of compatibility standards of treatment medical devices is an issue to the city
healthcare manufacturer therefore need compatibility and interoperability
standardization.
 RFID implementation is highly cost and remains unclear this become disadvantages.
For example RFID cost $ 0.30 per tag while compare to barcode $ 0.0024/ label.
 RFID has scope items of reading tags unless there are some sensors placed around
otherwise had range limit to cover during operation there will be needed to enhance
RFID technology in future.
 RFID still need to be connected to the backend system such application packages like
ERP, CRM and DSS in order to collect information effectively and efficiency.
 Due to the security and privacy RFID has some issues and has self problem which
cannot adequately be sure integrity of data and confidentiality in the form of privacy
system, information can be easily tracked any time if is needed.

11. 6.0 REFERENCES
Anderson. (2007). Global Data Standards in the Healthcare supply Chain. The business case ,
pp. 30-48.
Andrews, J. (2006, January 17). The debate;. Retrieved December 30, 2011, from
www.healthcare itnews.com.
Journal of Cases on information Technology,. (2008). The care of City Healthcare. Hershey
PA 17033-1240, USA: IGI Global.
Mehjerdi, y. Z. (2001). RFID and its benefits. Assembly automation- Research paper , 251-
261.
Yahia, Z. M. (2001, March 31). RFID and its benefits: a multiples case analyses. Research
Article , 251-261.