Advantages of the Point of Sales System
The use of technology has become inevitable for every industry size and type of business. The positive effects of the business can be realized even in small industries. However, the small business organization may not have the resources and the expertise like a large organization to implement information technology strategies. The Four Seasons Nursery which is located in Colorado is a small business organization used to maintain manual registers in tracking and maintaining the inventory sales and in profit realisation (Wang et al., 2014).
However, with this system, the nursery was either making a negligible profit or loss. The implementation of point of sales (POS) system in the year 2008 however, helped the organization in eliminating the operational inefficiencies and helped the organization in better product management. The report discusses the advantages and the disadvantages of the new POS system that is implemented in the Four Seasons Greenhouse nursery (Pearlson, Saunders and Galletta 2016). The use of POS helped the organization in easier tracking of the data related to the sales and inventory items, which in turn helped in better decision making. The following paragraphs provide the details of the implemented point of sales system.
1. POS system-Advantages/Disadvantages
The implementation of the point of sales system helped the Four Seasons Nursery to manage the sales, inventory and business data in an efficient manner. The point of sales system allowed the owner in tracking useful business data that helped in better decision making. The advantages of the point of sales system are as follows-
The new system helped in tracking the useful business data associated with the sales transaction at the time of sale, thus eliminating the need of manually tracking the sales (Stadtler 2015). The manual tracking was prone to human errors that often resulted in incorrect or erroneous data entry.
The new POS system provided much more than a cash register as it provided a robust functionality of inputting, tracking and data distribution. This provided useful information for operating and managing the business. This is one significant advantage of the new POS system.
Since the new POS system provided a robust functionality in tracking the inventory sales and the other useful business information, it helped in better decision making.
The detailed knowledge about the cost of the product further helped in appropriate product cost and increase in the profit of the product (Peppard and Ward 2016). The management had very little knowledge about the product which offered higher profits. With the implementation of the new POS system, the identification of the profitable products of the organization became easier.
Disadvantages of Implementing POS in a Business
The POS system helped in controlling the labour expenses and the employee schedule. The new system helped the owners to delegate more responsibilities to the staffs for establishing the accountability.
These are the major advantages of the implementation of new POS system. However, there are certain disadvantages of implementing the POS in a business. These are as follows (Stair and Reynolds 2013)-
- The cost of this system is high considering the fact that the Four Seasons is a small sized enterprise. The system is subjected to a certain amount of maintenance cost as well
- There are certain security risks associated with the use of information system, which includes risk in privacy, confidentiality and integrity.
2. The Competitive Advantage with POS
The new POS not only helped in better management of the business operation of the organization, but also helped the organization in gaining a competitive advantage (Hall 2012).
The new POS system helped in identification of the profitable products and the products that can give the organization a better profit margin. This gave a competitive advantage to the organization in business market.
The new POS system helped in better management of all the vital business operations. With the implementation of the system, the owners of the organization could access the live reports of the sales and inventory, which in turn helped in better management of the business processes of the organization, thus giving it a competitive advantage (Lallo 2012).
3. Centralized Database and its Advantages
The POS system that is implemented makes use of a centralized database. There are certain advantages of centralized database, which are as follows (Coronel and Morris 2016)-
The centralized database helps in easier management and monitoring of the data stored in them. It becomes easier to access the data that is stored in a centralized database.
The operational speed and the operational efficiency of a centralized database system are quite high. This further helps in easier data management.
The cost of maintenance of a centralized database is comparatively low in comparison to a decentralized database system.
4. POS in facilitating decision-making
Effective decision making is one of the advantages offered by the new POS system. The entire business operation of Four Season was automated with the help of the new POS system.
The POS system manages the business activities more effectively because it generates real time data report of the sales, inventory and data input.
The manual information tracking is not effective since it is prone to human errors and incorrect data entry. The new POS system eliminates the need of using manual record and the reports are generated in real time with the help of the new POS system.
With the help of new POS the questions associated with the inventory items and sales can be effectively answered.
Advantages of a Centralized Database
The information can help in accurate pricing of the product and in easier management of the labours’ schedule, which in turn helps in better management of the business.
Thus the new POS system can help in better decision making by properly identifying the project needs.
5. Telecommunication Options
The POS must ensure a proper telecommunication option that will helps in effective information flow. The Local Area network or LAN help in interconnecting the digital devices present in a smaller geographical area. While that of Wide Area Network (WAN) and Metropolitan Area Network (MAN) works on a larger geographical area. Since Four Seasons is a small sized organization, LAN is the recommended telecommunication option for the organization (Ghosh et al., 2014).
The LAN being the backbone of the telecommunication system, it becomes very essential to evaluate whether wired or wireless technology will be suitable for consideration. However, the wireless technology is recommended for the organization as it is easier to implement and is cost effective as well. Furthermore, the cost of implementation of a wired system will be higher in comparison to the wireless system (Laudon and Laudon 2016). The wireless system will furthermore help the employees of the organization in easier data access by connecting to a common network. Therefore, the wireless technology is recommended for the appropriate telecommunication option. The wireless technology in Four Seasons can be implemented by making use of the radio, infrared and wireless communication (Lu et al. 2015).
6. Associated Risks
With the use of wireless technology in implementation of the system, there are certain associated security risks as well (Al Ameen, Liu and Kwak 2012). This risk is mainly associated with data storage and deals with the security, privacy and confidentiality of the data stored. The risk is more prominent in wireless network as it possesses the security risks of hacking and data theft. Therefore it is essential to ensure proper data security. The threats in the system can be from an insider too (Galliers and Leidner 2014). An employee of the organization can make wrong use of his power and can modify the data stored in the system. Therefore it is necessary to ensure proper security of the POS system (Barakah and Ammad-uddin 2012). This can be achieved by ensuring proper authorization control and access control. This will ensure that no unauthorized person is able to access any data from the system. Use of internal firewalls further prevents the entry of any malware in the network thus securing the data stored in the POS.
Telecommunication Option
Conclusion
Since the use of information technology has become a mandatory need for any organization, the decision of using a new point of sales system in Four Seasons nursery was appropriate. The business could achieve a considerable benefit with the use the new information system as the internal business processes were automated with the help of the new point of sales system. The use of the new point of sales system proved to be of a huge business benefit for the organization as it became easier for the organization to manage the sales procedure. The technology bloom in the organization therefore proved to be a good decision for the organization. With the knowledge of actual price of the products, the business could make a greater profit.
Recommendations
The recommendations for improving the business process of Four Seasons are as follows-
- Proper training is to be provided to the employees of the organization in order to make the efficient use of the system
- In order to maintain the data security, proper data control is needed to be ensured.
- The POS should be implemented according to the need of the organization.
References
Al Ameen, M., Liu, J. and Kwak, K., 2012. Security and privacy issues in wireless sensor networks for healthcare applications. Journal of medical systems, 36(1), pp.93-101.
Barakah, D.M. and Ammad-uddin, M., 2012, February. A survey of challenges and applications of wireless body area network (WBAN) and role of a virtual doctor server in existing architecture. In Intelligent Systems, Modelling and Simulation (ISMS), 2012 Third International Conference on (pp. 214-219). IEEE.
Coronel, C. and Morris, S., 2016. Database systems: design, implementation, & management. Cengage Learning.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Ghosh, A., Thomas, T.A., Cudak, M.C., Ratasuk, R., Moorut, P., Vook, F.W., Rappaport, T.S., MacCartney, G.R., Sun, S. and Nie, S., 2014. Millimeter-wave enhanced local area systems: A high-data-rate approach for future wireless networks. IEEE Journal on Selected Areas in Communications, 32(6), pp.1152-1163.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Lallo, N.Y.H., 2012. Critical Succes Factors, Instructors’ Characteristics and Accounting Information System Course Content (Doctoral dissertation, Universiti Utara Malaysia).
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Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Stair, R. and Reynolds, G., 2013. Principles of information systems. Cengage Learning.
Wang, S., Chen, W., Yin, Z.Q., Li, H.W., He, D.Y., Li, Y.H., Zhou, Z., Song, X.T., Li, F.Y., Wang, D. and Chen, H., 2014. Field and long-term demonstration of a wide area quantum key distribution network. Optics express, 22(18), pp.21739-21756.
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