Investment Evaluation Of RFID Technology Applications: A Real Options Perspective

The majority of previous studies on investment evaluation of RFID technology ignore the flexibility and the Real Options that this kind of investment can lead to. However, studies on the evaluation of other Information Systems have acknowledged the importance of these options as they create future business opportunities or give to managers the opportunity to take actions that could favorably influence the future direction of an investment in response to external or internal events. Drawing on literature from the Financial Field (Real Options theory) and Information Systems (IT investment evaluation), this paper has the aim to apply the Real Options approach to the RFID context through a case study example. This study shows how and why this approach is applicable to the case of RFID technology, underlining its necessity for the RFID investment evaluation