Advantages and Disadvantages of POS System
Discuss About The Exploring Four Advantages Of Embedded POS?
Nowadays, information technology is utilized by almost every business of all the industries. However, small businesses face some problems in the implementation of information technology approaches due to their incompetence to afford the required expertise and resources.
Point-of-Sale (POS) system can be defined as a combination of hardware and software for the purpose of creating a machine in order to process the transactions and payments (Harbor Touch, 2018). A POS system assists in the effective tracking of business management data and provides instant results which cannot be derived in case of manual tracking of sales. This report discusses the benefits received by the company by application of POS system in their operations.
The most important benefit derived from the implementation of POS system by garden centre is the effective tracking of business data. This assisted in reducing the need of recording the number of sales manually. The functions of storage and processing of data along with sales history compilation and keeping of inventory up-to-date are performed simultaneously.
Moreover, a POS system is more useful when compared with a cash register as it performs various functions related with data tracking and distribution which assists the owner in gaining knowledge regarding operations of business (Bradford, 2015). It also reduced the dependence of business on speculation for the purpose of identifying the number of units to be ordered and facilitated easy decision making. Also, the owners are able to delegate the responsibility to subordinates and establish accountability with the help of POS system (Expert Point of Sale, 2018).
The POS system suffers from various limitations. There are security risks associated with a POS systems it is linked to a central network therefore there is a risk of exposure of confidential information of the clients to others (Kimmons, 2017). Moreover, POS systems require regular updating of the software which is a costly process. Also, the POS systems that are software based systems are less convenient as compared to web-based system.
POS system will assist in gaining competitive advantage along with contributing towards the efficiency of business operations by providing a complete analysis of the business data i.e. the data related to sales transactions. Such data helps the owners of the business in utilizing the information gained with the help of POS system for the benefit of the business (Becker, Uhr&Vering, 2013). It also helps in identifying the costs associated with the products along with their profitability. The business achieves competitive advantage with such information as it shifts its production processes to those products which are highly profitable. This increases the overall profitability of the organization thereby leading to effective management of the business operations with the proper reporting of accurate information (NCC, 2018).
There are several advantages of having a centralized database such as better security of data due to data protection from tampering and stealing. In other words, there is better preservation of data with the help of centralized database. Due to the existence of only one primary record for the given set of data, the redundancy of data is minimized to a great extent along with the maximization of data integrity (Gelinas, Dull & Wheeler, 2014). Since POS system is a centralized database it is easy to be used since the entire information can accessed in a single moment. Therefore, centralized database offers ease in the portability and administration of data along with providing instant updates to the end user on the data. It also minimizes the costs associated with labor and maintenance along with the cost of power supply thereby making it more cost effective in comparison with the other database systems (Baldauf& Stair, 2010).
Gaining Competitive Advantage through POS System
The number of units to be ordered by garden centre was earlier decided on the basis of speculation. But POS system supported decision making regarding order quantity by providing accurate data with regard to the inventories.
POS system provides business activities which are processed by POS system in such an effective manner that it provides quick results with the recording of sales transactions during the process of sale. Also, it keeps the information related to the inventory up-to-date along with proper compilation of sales history which helps in processing of data effectively.
Tracking of information manually is an ineffective form of tracking since the computerized processes have no comparison with the manual performance of operations. Furthermore, business can be effectively managed only when proper access to the operational data is available. Processes like cost reporting become difficult in case of manual tracking of information which in turn makes it difficult to identify the profitability of every item.
A POS system provides answers to various questions such as order quantity, sales quantity and the number of items to be discarded. With the help of POS system, guesswork is completely eliminated in terms of numbers of items to be ordered as it provides accurate information regarding the inventory.
The information provided by the POS system can be used for effective decision marketing regarding the number to items to be ordered (Miron& Brown, 2006). Also, the processing and storage of data performed by POS systems will assist in cost reporting along with the profitability of individual items. Such information can be utilized for maximizing the production of more profitable items thereby increasing the overall profitability of the business.
Out of the three types of networks that are available (LAN, WAN and MAN), for meeting the requirements of the Four Seasons Greenhouse and Nursery, use of LAN is suggested. The garden centre has limited business operations therefore there is no need for WAN and MAN. LAN also supports many POS Terminals. It will assist in holding all kinds of records and settings for the POS system since it is a centralized database server.
Media Types – With the use of Wireless technologies, Wireless LAN setting should be done for POS system. The establishment of communication will be made by the terminals with the help of WPA2 security standard in an encrypted manner. Narrowband microwave, Spread Spectrum and Infrared, are some of the wireless technologies which can work in a wireless LAN Network.
There can be some risks in using POS system that are related to the data confidentiality, security and privacy.
Security- The security of the data of business and the customers is under threat when the POS systems are supported by older versions of operating systems. Even in cases where extended support is not available for the operating systems, the security of the data in the system is compromised. The data is also not secure when the POS system is fraudulent i.e. the hackers have access to the data in system due to various practices such as skimming and phishing (Turner &Weickgenannt, 2016).
Centralized Database- Advantages
The security of the data can be protected by making the use of anti-virus software available in the market which will protect the data from the unauthorized access of the hackers. Also, the default password should be changed such that it becomes more secure from the access of the hackers. In case of maintenance of the system by a third party, it must be ensured that the same password is not used for more than one client by formulating strong policies (Lord, 2016).
Privacy- The personal information of the customers such as credit card information stored in the POS systems is under easy access for the hackers as they make the use of spywares and various other hacks for making the use of such information for their own purposes (Trend Micro, 2014). This is a risk for the privacy of the business and their customers.
The privacy of the data can be protected by way of generating a security protocol and making the employees aware regarding its use by providing proper training. Regular updating of data will also help in identifying any privacy threats on time. Also, multi-biometric systems can also be used for the purpose of protecting the privacy of the data.
Confidentiality- The data of customers have suffered from various confidentiality breaches in the past. The confidentiality of data is under threat when it is accessed by someone who is not allowed to view it.
It can be protected with the help of software that protect the data in the system from a variety of threats. Such software also assists in protection of data from malware and various external threats. Such emerging technologies must be utilized for protecting the confidentiality of business and customer data.
Conclusion
This report provides for the implementation of information technology in business by the garden center for better management of business. The information technology is implemented by the garden centre in the form of POS system which helps in achieving efficiency in operations along with competitive advantage through improved decision making. The decision making based on POS system has significantly improved the profitability of the business.
Regular updating of the hardware and software are recommended for the purpose of protecting the privacy, security and confidentiality of the data of garden centre. Also, various software can be used and password can be installed for taking precautions against the activities of hackers. Wide Area Network (WAN) can be used for establishing network with remote locations.
References
Baldauf, K. and Stair, R. 2010. Succeeding with Technology.Cengage Learning.
Becker, J., Uhr, W. and Vering, O. 2013.Retail Information Systems Based on SAP Products.Springer Science & Business Media.
Bradford, M. 2015. Modern ERP: Select, Implement, and Use Today’s Advanced Business Systems. Lulu.com.
Expert Point of Sale. 2018. What Is The Advantage Of A POS System?,[Online]. Available at:https://www.expertmarket.com/pos/pos-system-advantages[Accessed on: 30 January 2018].
Gelinas, U. J., Dull, R. B. and Wheeler, P. 2014. Accounting Information Systems.Cengage Learning.
Harbor Touch. 2018. What is POS? The Definitive Definition, [Online]. Available at:https://www.harbortouchpossoftware.com/what-is-pos/ [Accessed on: 30 January 2018].
Kimmons, R. 2017. The Disadvantages of a Point of Sale System, [Online]. Available at:https://bizfluent.com/list-6729611-disadvantages-point-sale-system.html[Accessed on: 30 January 2018].
Lord, N. 2016. WHAT IS POS SECURITY? PROTECTING DATA IN POS ENVIRONMENTS, [Online]. Available at:https://digitalguardian.com/blog/what-pos-security-protecting-data-pos-environments[Accessed on: 30 January 2018].
Miron, A. and Brown, D. R. 2006.The Professional Bar & Beverage Manager’s Handbook: How to Open and Operate a Financially Successful Bar, Tavern, and Nightclub. Atlantic Publishing Company.
NCC. 2018. Exploring Four Advantages of Embedded POS, [Online]. Available at:https://www.nccusa.com/exploring-four-advantages-embedded-pos/[Accessed on: 30 January 2018].
Trend Micro. 2014. Point-of-Sale System Breaches, [Online]. Available at:https://www.trendmicro.com/content/dam/trendmicro/global/en/business/capabilities/solutions-for/point-of-sale/wp-pos-system-breaches.pdf[Accessed on: 30 January 2018].
Turner, L. and Weickgenannt, A. B. 2016.Accounting Information Systems: The Processes and Controls.John Wiley & Sons.
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