Role of Pilot Study in Assessing Viability of New Technology Projects: The Case of RFID in Parking Operations

The use of pilot studies to evaluate the economic justification of technology projects is common in practice. The pilot studies play even greater role in the projects affecting customer interactions with the product/service offerings since perception and/or reaction of customers is captured and analyzed through such studies. Yet, many times the methodology used in these studies lacks rigor and comprehensiveness, and there are scopes for further improvement. The current literature provides limited information on how the pilot studies should be used to decide whether to go ahead with a proposed technology project or not. In this paper we present guidelines for effectively using pilot studies in making such decisions. With the help of a real-life pilot study on deployment of RFID technology in parking operations at a university, we discuss how the proposed guidelines may be implemented to evaluate the cost-effectiveness of the proposed project. In recent times RFID technology is getting increasing attention and many organizations are in the process of deploying this technology. The paper offers a timely and cost-effective evaluation study of a particular application of RFID technology. We found that users’ benefits and costs played a crucial role in determining whether the proposed project should go forward or not. Also, we found that intangible benefits and costs to be important. These findings along with our discussions on the general methodology will provide practical guidelines for evaluating viability of technology projects using pilot studies.