Information Technology and Small Business Operations
Discuss About The Fundamentals Relational Database Management.
Industry of every size and type requires the use of information technology. Positive effects can be realized by small businesses through the adoption of technology. However, small businesses often lack adequate resources and expertise that are possessed by large corporations for the implementation of information technology strategies.
Businesses are increasingly adopting Point of Sale (POS) systems for bringing an ease in their operations. POS systems are computerized networks in which the main computer is linked with the checkout terminals and are sustained by a variety of features of hardware including card payment terminals and barcode scanners. In other words, POS system is an arrangement of software and hardware built for the centralization of business operations (Guinn, 2018). The transaction of the business is easily managed by such system including processing of credit cards and post- transaction operations that result in customer satisfaction. This report focuses on the adoption of new Point of Sale (POS) system by Four Seasons Greenhouse and Nursery, located in Colorado.
The new POS system adopted by Four Seasons Greenhouse and Nursery has the following advantages and disadvantages.
Advantages
More Useful than Cash Register- POS system undertakes a number of functions which makes it more useful than a cash register. Such functions involve input, tracking and dissemination of data which in turn provides the owner with useful information in context of operations and managing of business (Nelson, 2014).
Tracks Business Data- Point of Sale (POS) system facilitates the owner of Four Seasons Greenhouse and Nursery to easily track business data directly from the sales transactions which eliminates the requirement of performing manually tracking the sales. The system itself performs the storage and processing of data at the time of performing the function related to compilation of sales history and updating inventory (Harbortouch, 2018).
Decision Making- Accurate data and business records are maintained with the help of POS system which assists the owners in the decision making process. This is done by identifying the items which are highly profitable and focusing on the production of such items in order to increase profitability. Earlier, the decision related to order quantity was based on speculation, but it I based on current inventory units.
Disadvantages
Security Risks- Severe security risks are associated with the implementation of POS systems in the business. The linking of such systems to the central networks may even result in the exposure of customer data to outside parties. The security risks may result from not keeping the software updated (Miron & Brrown, 2006).
Adoption of Point of Sale (POS) System for Four Seasons Greenhouse and Nursery
Inconvenient software based system- web- based systems are supposed to be more convenient than the software based systems. The availability of the computer is not enough for accessing reports and inventory counts with a software based system. Connectivity can be established between hardware terminals and internet only with the help of hardware.
Costly Software Upgrades- Software requires to be frequently updated with latest versions in case of a POS system. It also requires some updated hardware for the proper functioning of the software which makes it costly and complicated (Reilly, 2016).
The adoption of Point of Sale (POS) System will help Four Seasons Greenhouse and Nursery by allowing to improve operational efficiency by taking maximum advantage of business data. This in turn will help Four Seasons in gaining the competitive advantage. Moreover, such system will help in gaining product related knowledge that why the profitability of the products were not as high as expected. The system also provides detailed cost reporting for each item which in turn provides greater knowledge regarding the products which made maximum contribution towards profits. Furthermore, POS system will help Four Seasons by providing a new perspective by offering the opportunity to modify their production to the items which brings higher profits for them (Pickard- Whitehead, 2017). POS systems further allow the reporting of accurate information on time which will allow Four Seasons in gaining competitive advantage by helping in effective administration of business operations.
A number of advantages are offered by centralized database against other databases. The storage of data in a single place results in the maximization of data integrity and minimization of data redundancy. Moreover, the single storage location for the data results in better data security from the chances of data getting stolen or attacked (Baldauf & Stair, 2010). Situation of data at the same location also allows easy mirroring, alteration, analyzing and re- organizing of such data. Centralized database further provides easy portability and administration of data. Fault- tolerant setup included in the centralized database improves data preservation in comparison with other database types. The single database design makes it easy to use by the end user and allows them to receive immediate updates. All the information can be accessed from a single location at a single point of time (Sumathi & Esakkirajan, 2007).
Accurate data related to inventory maintained by POS system will help Four Seasons Greenhouse and Nursery in the process of decision making. Earlier, speculation formed the basis of decision making regarding the quantity to be ordered.
Advantages of POS System Adoption
The sales transactions can be instantly tracked at the point of sale by the POS system which in turn helps in the processing of business activities effectively. Moreover, some processes such as inventory updating and compilation of sales history contributes towards processing of business activities in an effective manner.
The tracking of information manually cannot be performed in an effective manner due to the inaccessibility to the operational data. The operational data is considered to be the key behind the effective management of business. Manual tracking does not facilitate cost reporting which in turn creates difficulty in identifying the profitability of different items (Sandlin, 2013).
A number of questions are effectively answered by POS systems. The guesswork related to order quantity is completely eliminated with the help of POS systems as it provides accurate inventory counts. Therefore, it allows the business to operate effectively on leaner inventory units. Answers to different questions are provided by system reporting such as order quantity and items sold and discarded (Phillips- Wren, Carlsson & Respicio, 2014).
The requirement for the manual tracking of sales is altogether eliminated with the help of POS systems as it allows the owner to immediately track business data at the point of sale from the sales transactions. The system performs data processing and storage along with the functions related to inventory updating and sales history compilation. It also undertakes the functions such as input, tracking and sharing of data such that it can be effectively utilized in the business operations (Edelman, Jaffe & Kominers, 2016).
POS system can be set up with the help of following telecommunication options.
Types of Networks- LAN, WAN and MAN are the three options available for the network establishment. Among these options, POS system is recommended to be LAN (Local Area Network) based for Four Seasons Greenhouse and Nursery. All the requirements can be adequately met by LAN for a small business. LAN is configured for holding all sorts of needed settings and records for a point of sale system. However, WAN is also a good option but the requirements of Four Seasons related to small business can be complied through LAN. LAN setup also supports multiple POS terminals which are configured for the purpose of accessing the same database server.
Types of Media- Wireless technologies should be implemented since wireless POS is expected to completely change the industry’s operating mode. It can be approached in the form of wireless LAN. In this, encrypted communication is performed by terminals with WPA2 security standard. Infrared, spread spectrum and narrowband microwave are the recommended wireless technologies for wireless LAN (Nonaka, Toyama & Hirata, 2008).
Disadvantages of POS System Adoption
A number of risks are suffered by POS systems related to security, privacy and confidentiality of data.
Security- The POS data can be easily exposed to hackers in case the POS system is functioning on an older operating system and there is no extended support. Sometimes the POS systems are fraudulent and put the customer and company data into risk. Moreover, many times the machines are taken under control by the hackers which provide them access to data and allow them to easily navigate through the entire network with the help of practices such as phishing. Skimming is also adopted by the hackers in which some hardware is installed on the POS system which allows them to gain access to the credit card information (Turner & Musman, 2018).
For protecting system security, latest version of anti- virus software should be installed for saving the data from the unauthorized access of the hackers. Default password of the system should also be changed immediately. In cases, where the POS system is sustained by a third party vendor, then passwords should be kept preserved under a strong policy (Goldberg & Palladini, 2010).
Privacy- all types of personal information are contained in the POS systems which can be used by the hackers such as name, email address, address, credit card information, city, birthday, purchase history, etc. Spyware and hack servers can easily hack the systems and retrieve such information for unauthorized use.
POS systems need to be regularly updated for the purpose of protecting the privacy of customer data. There should be proper emphasis on the follow up of security protocol in the business by the employees (Crotty, 2013). Privacy can also be ensured with the help of multi- biometric system.
Confidentiality- The confidentiality breaches can put the confidence of Four Seasons customers under threat. The breach of confidentiality occurs when the information is accessed by a person not authorized to do it. The customers are severely impacted on the occurrence of such circumstances.
Confidentiality can be protected with the help of software available in the market which are based on emerging technology. The confidential data can be protected through such software against emerging, known and unknown threats. Such software further protects the machines from outside threats and malware and delivers unfailing VPN connectivity (Rodríguez, 2017).
Conclusion
Therefore, it can be concluded that Four Seasons Greenhouse and Nursery have made effective use of technology for the smooth functioning of business. Competitive advantage along with the efficiency in operations has resulted from the use of POS systems. It is more useful than a cash register and allows effective tracking of business data. Now, the business is capable of making decisions related to order quantity on the basis of accurate business data and is not required to further rely on speculation. The profits of the business have also improved owing to appropriate decision making as they have shifted production to those items which are highly profitable. The POS system also provides answers to questions relating to number of units sold, discarded and ordered.
It is recommended that Four Seasons Greenhouse and Nursery should update it hardware and software from time to time for the purpose of protecting the security, confidentiality and privacy of customer and company data. Furthermore, telecommunication network can also be established through WAN (Wide Area Network) linked to a remote location.
References
Baldauf, K. and Stair, R. 2010. Succeeding with Technology. Cengage Learning.
Crotty, R. 2013. The Impact of Building Information Modelling: Transforming Construction. Routledge.
Edelman, B., Jaffe, S. and Kominers, S.D., 2016. To groupon or not to groupon: The profitability of deep discounts. Marketing Letters, 27(1), pp.39-53.
Goldberg, M. and Palladini, E. 2010. Managing Risk and Creating Value with Microfinance. World Bank Publications.
Guinn, J. 2018. What Is a Point of Sale System?, [Online]. Available at: https://www.softwareadvice.com/resources/what-is-a-point-of-sale-system/ [Accessed on: 8 May 2018].
Harbortouch. 2018. What is POS? The Definitive Definition, [Online]. Available at: https://www.harbortouchpossoftware.com/what-is-pos/ [Accessed on: 8 May 2018].
Miron, A. and Brrown, 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.
Nelson, S. L. 2014. QuickBooks 2015 For Dummies. John Wiley & Sons.
Nonaka, I., Toyama, R. and Hirata, T. 2008. Managing Flow: A Process Theory of the Knowledge-Based Firm. Springer.
Phillips- Wren, G.E., Carlsson, S. and Respicio, A. 2014. DSS 2.0 – Supporting Decision Making With New Technologies. IOS Press.
Pickard- Whitehead, G. 2017. 25 Point of Sale Systems for Small Business, [Online]. Available at: https://smallbiztrends.com/2017/04/point-of-sale-systems-for-small-business.html [Accessed on: 8 May 2018].
Reilly, J. C. 2016. An Overview of Point of Sale Systems. CreateSpace Independent Publishing Platform.
Rodríguez, R.J., 2017. Evolution and characterization of point-of-sale RAM scraping malware. Journal of Computer Virology and Hacking Techniques, 13(3), pp.179-192.
Sandlin, E. F. 2013. Start Your Own College Planning Consultant Business: Your Step-By-Step Guide to Success. Entrepreneur Press.
Sumathi, S. and Esakkirajan, S. 2007. Fundamentals of Relational Database Management Systems. Springer Science & Business Media.
Turner, A.J. and Musman, S., 2018. Applying the Cybersecurity Game to a Point-of-Sale System. In Disciplinary Convergence in Systems Engineering Research (pp. 129-144). Springer, Cham.
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