Uses of POS System
Due to the fast paced technological advancement and ramification in the Information technology field, it has become a mandatory step for every business to keep abreast with these changes. It has helped the business in providing innovative and creative opportunities to simplify their business process. Gone are those days where every business demanded effectiveness in its business process, the current scenario of business demands an efficient business process as well. In order to accomplish the same, the businesses are now more focused on integrating their business process with techniques with more effective results (Coronel and Morris, 2016).
The paper specifically focuses on the implementation of such advanced tool called POS or point-of-sale system. A POS system is used for a normal business transaction process for accepting payments from the customers. The discussion will be based on the uses of POS and how POS is used for decision making process. Moreover, the several aspects related to the POS system will also be discussed and how POS system helped the Four Seasons greenhouse and Nursery to accelerate their declining business to a stage of stable growth.
Any organization like Four Seasons could gain an upper hand in the business activities by implementing such technologically advances sale system. There are various pros and cons associated with the POS system some of them are:
The time lag caused due to the manual intervention of the humans can be reduced to a great extent. POS systems are more fast and reliable, which improves the accounting process of the business. The new POS sale system has an inbuilt reporting system which helped the business to allocate resources to the various departments efficiently. Moreover, it also facilitates in tracking the real time sales data which helps in making important decision related to business (Aurigi 2016).
Along with having several benefits, the new POS system is also prone to several external threats related to security which are a disadvantage to the system. Also, POS system backbone is the internet connectivity without which it is useless. The POS system relies on software which is a vulnerable element as it requires upgradation from time to time. Relying on such software can be heavy on the pockets as the cost of maintenance and servicing is quite high.
As compared to the traditional sales machines, POS systems are more reliable, efficient and helps us in getting desired results. It helps us inventory management, providing reports of sales and transactions done, and there is no risk of human error. Being a fast sales system, makes the business process faster which provides better customer service (Eason, 2014).
Advantages of POS System
The users are able to track and store the sales data and update the inventory at the same. This eliminates the manual intervention and the business can operate on lower inventory units. Using the reports functionality of POS, one can analyze the sales history of a product and improves the accuracy of the inventory counts needed. It can help in providing information about the product through which the business is actually making profits and focus on the products which are less profitable. This robust functionalities can provide the business with accurate results regarding its business operations and reduces the gap due to human errors. All these factors combined together, contributes in gaining competitive advantage (Ingram et al., 2015).
Switching to a centralized database is reliable for a company like four season and the data security concern is minimized. The various advantages associated are:
- Having a centralized database reduces the security concerns as all the important data can be stored at a particular location
- It minimizes the data redundancy and increase the data integrity which makes the data collection more accurate and the users can rely on it.
- The data updated in the database can be easily accessed by an end user who has the authentication (Dontigney, 2018).
- Having database at multiple locations increases the chances of data theft and also the cost of maintenance is high, which is usually less in case of having a centralized database.
- The storage of such huge amount of data raises security concerns and having a centralized database ensure that the data is protected with multiple layers of encryption like passwords protection, firewalls etc (Ben-Shachar et al., 2014).
Having a POS system helps an organization in forecasting sales details which helps in making several decisions related to business process and inventory units. By analyzing the data collected through sales, business owners can operate their business on leaner inventory units. It helps in streamlining a business process and allocates resources to different departments according to their needs (Hall, 2012).
The kind of information a POS system provides, helps the business in processing their activities more effectively. By reviewing the reports, the owners can now analyze the products demands and the profitability associated with it. Similarly for four seasons, the owners analyzed that the products that they thought were producing profit for the business were actually less profitable. It also helps in allocating the resources to the respective departments according to the deficit. This data cannot be tracked manually as the accurate results can’t be attained. The system easily aids in getting information about the sales transaction and updating the inventory at the same time, which was not possible with manual process (Kim, 2015).
POS systems helps in answering various questions related to business process such as sales transaction data, the inventory units needed etc. It effectively helps in answering questions related to the profitability of a product. The information obtained from these data can be used by four seasons’ business owners to accurately know which product is more profitable and providing detailed knowledge about a product helped four seasons to mark the price of a particular product more accurately (Lam et al., 2018).
In order to store large amount of data, POS systems establishes communication through internet as the data is stored on a cloud based server. To ensure an uninterrupted communication with internet, preferably, three types of network configurations are preferred, which are LAN, WAN, MAN.
Disadvantages of POS System
LAN or a Local Area Network is mostly preferred for a connection that is to be established in a small area, or in a confined place like for a small office. MAN (Metropolitan Area Network) comparatively spans across a larger area than LAN, which covers several buildings in a particular city or town. A Wide Area Network or WAN can be spread across the boundary of a state or a country and offers high speed connectivity. For a small business like Four seasons, LAN is the recommended option for telecommunication as it is more secure and faster in a confined area (Libby, 2017).
When it comes to medium of communication, every small business prefers wired technology to ensure data security. For Four seasons, twisted pair unshielded cable can be used as it offers much higher speed. The business owners can also opt for wireless form of technology as the business is spread in a limited area. Wi-Fi and Bluetooth technologies are types of wireless technology that can be integrated with the business process.
While offering several facilities to improve the business process, a POS system also has several risks associated which are related to security, privacy and confidentiality.
Risk related to Security: The POS system is vulnerable to attacks from hackers who can breach the system in order to gain access to the system. The hardware encryption is comparatively weak and is prone to external threats. By using multiple layer of hardware encryption one can avoid any such circumstances.
Risk related to Privacy: As the database of a POS system is loaded with personal data, there is always a risk where in the private details might fall into the wrong hands. The customers digital IDs and personal information is at stake. By restricting the access to such type of private information to specific number of persons, one can avoid such circumstances (Cannataci et al., 2016).
Risk related to confidentiality: The confidential information such as the name of the dealers, business owners, transactions done, payment received are always an area of target for hackers. To mitigate this issue, such confidential should be encrypted using an algorithm so that it becomes difficult to crack into the system (Von Solms and Van Niekerk, 2013).
Conclusion
The discussion can be concluded by saying that POS system comes with several functionalities and when integrated with the business process, it helps the business in providing a competitive edge. For four season’s business, POS system has expanded the sales profit to a great extent. The owners now can effectively manage its inventory and allocate labor expenses to specific departments. The technology has provided a solid infrastructure to the business and the data collected can be leveraged to answer question related to increase the business efficiency. The report discusses the advantages and disadvantages a POS system might have, but with proper handling, the disadvantages can be eliminated. Thus, POS system is an excellent tool through which the businesses can increase the productivity and gain benefit in their business process.
References
Aurigi, A., 2016. Making the digital city: the early shaping of urban internet space. Routledge.
Ben-Shachar, I., Erdogan, E.S., London, K.S. and Parsons, J.E., Microsoft Corp, 2014. Centralized publishing of network resources. U.S. Patent 8,683,062.
Cannataci, J.A., Zhao, B., Torres Vives, G., Monteleone, S., Bonnici, J.M. and Moyakine, E., 2016. Privacy, free expression and transparency: redefining their new boundaries in the digital age. UNESCO Publishing.
Coronel, C. and Morris, S., 2016. Database systems: design, implementation, & management. Cengage Learning.
Dontigney, E., 2018. The advantages of Centralised Database storage [Online]. Available at: https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html. [Accessed on: 23 September 2018].
Eason, K.D., 2014. Information technology and organisational change. CRC Press.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., 2015. Sales management: Analysis and decision making. Routledge.
Kim, L.S., 2015. Components of a Business Model and their influences on a firm performance. Indian Journal of Science and Technology, 8, p.139.
Lam, T.S., Lee, H.H. and Tsai, S.J., Flytech Tech Co Ltd, 2018. Service data record system and POS system with the same. U.S. Patent 9,881,283.
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Von Solms, R. and Van Niekerk, J., 2013. From information security to cyber security. computers & security, 38, pp.97-102.
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