Competitive Edge
POS System
Advantages and disadvantages of POS System
Similar to any other centralized information system, POS offers the overall benefit of managing business data. This data includes inventory, financial records and sales record which are now processed using a robust functional item. Furthermore, through the accurate representation of information, the POS system facilitates better decision making based on factual data. These decisions then arguably help the owners know more about their business an outcome that also stretches to the management of the employees (Muhsinzoda 2015).
However, the same system also facilitates some operational drawbacks. For one, the centralized control creates a single point of failure in case it is affected. Moreover, the same element is also susceptible to security breaches which can cause the business a lot of losses (Henderson 2018). Finally, in terms of the employees, their job security is affected as a more efficient resource is introduced in the organization. In all, the POS system presents its own benefits and limitations.
Competitive Edge
Firms with access to specific resources gain a competitive advantage in business. At the same time, an enterprise can use certain resources efficiently as compared to others, an outcome that can provide the competitive edge (Porter and Millar 1985). In this case, the POS system provides both benefits, serving as a unique item for managing functions and also as an operational element that efficiently controls business operations. Therefore, this system gives Four Seasons a competitive edge in three ways. One, by shifting and transforming the cost of business operations, this shift includes the management of supplies, employees and sales records based on the most profitable items (Xu and Quaddus 2013). Secondly, the system offers a differentiation feature, where through technology the host company better understands its customers through the additional knowledge of its business. Finally, innovation where new ideas are continuously applied to boost the organization’s outcomes such as profits and costs of production.
Advantages of a Centralized Database
A common struggle is seen in most organizations that of having separate databases to store information. While it is a feasible system, these databases force the users to separately access different storages in order to perform their activities. In comparison, the centralized databases offer a single source of information thus items such as names, location, and activities of a business are all contained in one system (EDM 2018). This database structure offers many benefits, most of which stem from the elements of data integrity and security. Basically, data or labels are never repeated which reduces redundancy thus enhances the quality of information. Moreover, its centralized nature makes it easier to control access, which boosts the security of the resource. Ultimately, these benefits facilitate better system support, a function that also promotes the training of the end users.
POS and Decision Making
Information is the single most variable commodity making managerial decisions. Through this resource, an organization can accurately determine its functions, advantages, and drawbacks among many other factors. Now, the POS system manages information thus acts a central tool for decision making (Fly 2017). Furthermore, through its strategic operations that involve multiple scenarios and projections, the system can process business functions effectively. For instance, through the inbuilt report generators, the system can run scenarios based on the existing operational variables, thus boost the actions taken. Moreover, through the same features, simulations can be made to project future results, further improving the final decisions.
Advantages of a Centralized Database
Information can also be tracked manually based on the inventory system used. Although, this method outlines a simple and basic procedure its operation is filled with extensive limitations. For one, it is extremely labor intensive as individual members are required to catalog all the information collected by a business. Data such as sale records, supply and employees’ functions are all individually recorded which is tedious to perform. Secondly, the procedures used are prone to errors as inventory activities are conducted by human functions (Winston 2018). Thus, human errors is always a possible outcome. Third and final, the security which is never assured on account of the number of users. Therefore, with an information system, these drawbacks are eliminated while specific business questions are answered such as the most profitable products. Moreover, the most effective business hours and employees can be determined. All these benefits would only be achievable if information is used in business.
Telecommunication Options
The POS system provides two major functions; improving in-house activities and engaging the business to the outside community (customers). These distinct operations thus require two networking options, LAN (Local Area Network) and WAN (Wide Area Network). Providing a simple network, LAN would allow a business to connect POS across its boundaries i.e. within the business location. This connection would facilitate communication and security (Bourgeois 2016). On the other hand, WAN together with the other connection protocols (e.g. IP) would serve to connect the rest of the world to the organization. Therefore, a localized network (intranet) would serve the in-house functions through POS as supported by LAN. While an extranet (internet in this case) would serve the customers through the WAN.
Similarly, these networking options would also require communication techniques in the form of wired and wireless technologies. In this case, the wired facilities would offer high bandwidth and speed capabilities for complex tasks while the wireless systems would increase the connectivity results. For the wired technique, DSL (Digital Subscriber Lines) would be used as they already exist in most locations. Furthermore, they use copper cables which are adequately available thus is cost effective. While the wireless connection would be offered by Wi-Fi based on the 802.11 standards (Pinola 2017). A combination of these two technologies would boost connectivity, therefore, increase the availability of the POS system.
POS system Risks
Similar to any other information system, the POS application enables a business to efficiently and inexpensively collect information. Further, it can track an organization’s activities without the awareness of the users. These activities can include customer records, employees’ data and crucial financial information such as credit card data. As such, the concerns of data security and privacy arises more so because of the inappropriate access is given to the system and the flow of information (Chung and Paynter 2002). In the first instance, inappropriate access can come from unauthorized users who through their activities can leak data to the public. Regardless of whether they are intentional or not these actions would compromise the privacy of the end users and their security as their resources would now be in the public domain. Ultimately, the confidentiality of data is lost, an outcome that can also result from the second instance where data flows in unknown locations. Therefore, in the end, the POS system is susceptible to breaches that can compromise its security, privacy and confidentially.
POS and Decision Making
Mitigations to these risks would start with a business employing a proper information policy. This policy would include the system’s evaluation, agreements and encryption elements among many others. The evaluation would see the system monitored regularly to ensure no security breaches are experienced. This function would also see security measures such as firewalls, access control, and antivirus software installed. Secondly, all the data used with the system would be encrypted to ensure no third party members deciphers it (FS 2018). Finally, all employees would sign agreements to protect the system after undergoing thorough user training.
Conclusion:
Modern businesses are using information to increase their competitive advantage. In essence, they are using data as a functional tool to make better decisions. Similarly, the same tools are being used to predict future outcomes, a function that facilitates the growth of enterprises. Now, the POS system offers Four Season Greenhouse and Nursery similar benefits, allowing the company to gain a competitive edge over its rivals. Moreover, it has facilitated better profits by reducing the costs of production and by emphasizing on the most profitable products. Therefore, in the end, information technology is seen as a crucial element of business that can increase positive outcomes while providing an efficient working environment.
Information technology through its functions of connectivity has facilitated the growth of businesses. Today, local shops are quickly being transformed to household names by the benefits of technology, more so, those of data management. Essentially, the elements of IT; hardware, software and human capital are used to manage enterprise activities. Through these functions, the decisions made by organizations are now being based on factual results and not intuition, a factor that improves outcome particularly the profits of business. Furthermore, through information technology companies, small and big, are able to manage their resources, an additional benefit that minimizes the cost of production. In the end, IT enables businesses to remain competitive and agile through their operations that leverage on information management.
References:
Bourgeois, S. 2016. 11 Types of Networks Explained: VPN, LAN & More. BELDEN. Available at: https://www.belden.com/blog/digital-building/11-types-of-networks-explained-vpn-lan-more. Accessed 17 May 2018
Chung, W & Paynter, J. 2002. Privacy Issues on the Internet. Proceedings of the 35th Hawaii International Conference on System Sciences. Available at: https://pdfs.semanticscholar.org/56d9/fdefdc28df6abeaa8d30811efe4df0325d67.pdf. Accessed 17 May 2018
EDM. 2018. Why Should You Have a Centralized System? EDM News. Available at
:com/why-should-you-have-a-centralized-system”>https://effectivedatabase.com/why-should-you-have-a-centralized-system. Accessed 17 May 2018
Flat World. 2018. Security, Privacy and Confidentiality Measures.
Outsource Services Home. Available at: https://www.flatworldsolutions.com/security-confidentiality.php. Accessed 17 May 2018
Fly, A. 2017. The Role of Management Information Systems in the Effectiveness of Managerial Decision Making in Greater Irbid Municipality. Arabian Journal of Business and Management Review, 7(4). Available at org/open-access/the-role-of-management-information-systems-in-the-effectiveness-ofmanagerial-decision-making-in-greater-irbid-municipality.pdf”>https://www.omicsonline.org/open-access/the-role-of-management-information-systems-in-the-effectiveness-ofmanagerial-decision-making-in-greater-irbid-municipality.pdf. Accessed 17 May 2018
Henderson, K. 2018. The Disadvantages of Information Technology in Business. Chron. Available at: https://smallbusiness.chron.com/disadvantages-information-technology-business-4020.html. Accessed 17 May 2018
Muhsinzoda, M. 2015. Advantages and disadvantages of information systems. PublicaTIC. Available at: es/master-informatica/advantages-and-disadvantages-of-information-systems“>https://blogs.deusto.es/master-informatica/advantages-and-disadvantages-of-information-systems. Accessed 17 May 2018
Pinola, M. 2017. Definitions and Examples of Wireless Technology. Lifewire. Available at: https://www.lifewire.com/what-is-wireless-2377432. Accessed 17 May 2018
Porter, M & Millar, V. 1985. How Information Gives You Competitive Advantage. Harvard Business Review. Available at: org/1985/07/how-information-gives-you-competitive-advantage“>https://hbr.org/1985/07/how-information-gives-you-competitive-advantage. Accessed 17 May 2018
Xu, J & Quaddus, M. 2013. Information Systems for Competitive Advantages. Managing Information Systems. Available at: https://www.springer.com/cda/content/document/cda_downloaddocument/9789491216886-c2.pdf?SGWID=0-0-45-1373647-p174839874. Accessed 17 May 2018
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