Advantages of POS Systems
Discuss about the adoption of information technology in the business operations of Four Seasons Greenhouse.
The use of information technology has now become the requirement of every kind of business and industry of every size. The positive effects of adopting technology can be realized by the small businesses but they lack the expertise and resources required for the implementation of the information technology strategies.
POS systems are being increasingly adopted by the businesses as there is no requirement of the price tags and the processing of sale take place only by the scanning of the product code which is linked with the selling prices (Griff, 2014). POS systems can be defined as a computerized network in which the checkout terminals are linked with the main computer and are supported by various features of the hardware including the barcode scanners and card payment terminals (Hiiemaa, 2015). This report discusses the POS system adopted by Four Seasons Greenhouse and Nursery in detail.
The new Point-of-sale (POS) system has the following advantages and disadvantages.
Tracking of Business Data- Point- of- Sale system allows the owner to track business data immediately from the transaction relating to sales which in turn eliminates the need to perform the manual tracking of sales. The data is stored and processed by the system from the sale while performing the function of compiling of sales history and updating of inventory (Solution Dots, 2016).
More useful than a Cash Register- The functions of a POS system provide much more usefulness than a cash register. POS systems are capable of performing a variety of functions such as input, tracking and distribution of data which provides useful information to the owner with respect to the operations and management of business.
Supports Decision Making- The decisions relating to the number of units to be ordered are no longer required to be made on the basis of speculation regarding present inventory units.
Costly Software Updates- POS system requires continuous updating of the software with newer versions along with some hardware updates which is very complicated and costly (Kimmons, 2017).
Security risks- Various security risks are associated with the linking of the registers in the store by POS system to a central network. Security breaches can occur in cases where the software is not updated on time or if it is incorrectly updated.
Problems caused by hardware- web- based POS systems require fixing of the hardware which is difficult task. The costly and time consuming services of a service technician may be required for troubleshooting the problem.
Disadvantages of POS Systems
Point- of- Sale (POS) system allows the business to take the maximum advantage of the business data for the purpose of gaining operational efficiency and competitive advantage. POS system assists in gaining knowledge about the products which were not as much profitable as expected. Moreover, detailed cost reporting with regard to every item provided greater knowledge about the products which contributed maximum towards the profits (Schroeder, 2007). This new perspective provided by the POS system, offered the opportunity to shift production to those items which were found to be highly profitable which significantly resulted in higher profits. Accurate and on time reporting of information with the POS system assists in the effective management of the business operations.
Centralized database provides a variety of advantages against other databases. Some of them are listed below:
- Data redundancy is minimized and data integrity is maximized as all the data is stored in a single place which implies that the given set of data has only one primary record.
- Greater data security is provided as a result of single storage location of the data which means that there is only one place from which data can be stolen, attacked or tampered with.
- Easy to use by the end user due to its single database design.
- Accessing of all the information from the same location at the same time.
- End user receives immediate updates on the given set of data.
- Minimization of power supply, labor and maintenance costs makes it more cost effective in relation to other kinds of database systems.
- Changing, mirroring, re-organizing and analyzing of data become easier when kept in the same location.
- Data administration and Data portability becomes easier.
- Data preservation improves as compared to other types of databases due to the inclusion of fault- tolerant setup.
Decision making is facilitated by POS system with the help of maintaining accurate inventory data. Earlier, speculation related to the current units of inventory formed the basis on which the decisions relating to the number of units to be ordered.
The business activities are processed more effectively by POS system due to the fact that the business data related to the sales transactions are tracked immediately at the time of sale. Also, parallel processes are performed related to the compiling of sales history and updating of inventory.
Such information cannot be tracked manually in an effective manner as proper access to the operational data cannot be achieved which is required for the effective management of business. Moreover, manual tracking does not take into account the detailed cost reporting by item which specifies the product making the highest contribution towards the profits.
POS system provides effective answers to a variety of questions. Due to POS system, accurate inventory counts are available which significantly helps in eliminating the guesswork relating to the quantity to be ordered thereby facilitating the business to perform its operations on leaner inventory units (Rainer & Cegielski, 2010). Moreover, the reporting of the system provides answers to the questions relating to the number of units purchased, sold and discarded.
POS system eliminates the need for manual tracking of the sales by allowing the owner to track business data immediately at the time of sales from the transactions relating to sales (Park, Adeli, Park & Woungang, 2013). The processing and storage of data is performed by the system along with compiling the sales history and updating the inventory. The system performs functions associated with the input, tracking and distribution of data such that useful data can be acquired which can further be utilized in the various operation and management of business.
Telecommunication Options for Setting up POS System
The telecommunication options which can be utilized for the purpose of setting up of POS system are as follows.
Types of Networks- Among the three available options i.e. LAN, WAN and MAN, LAN (Local Area Network) based POS system will be recommended as it is a type of setup where a centralized database server is built and accordingly configured for the purpose of holding all kinds of required records and settings for a POS system. It will best suit the requirements of Four Seasons Greenhouse and Nursery as it is a small business. However, WAN can also be used but LAN is recommended after taking into consideration the operations of the business. Multiple POS terminals are supported by LAN based setup. All POS terminals are configured such that it can access same database server. This setup is also preferred by various departmental stores and larger supermarkets.
Types of media- As far as type of media is concerned, wireless technologies should be adopted as wireless POS is capable of changing the operating mode of the industries. The approach to wireless POS systems is in the form of wireless LAN. Therefore, an encrypted wireless LAN should be set up for POS system. In this, the order terminals communicate in an encrypted manner with the secure WPA2 security standard. The wireless technologies recommended for wireless LAN are narrowband microwave (help in interconnecting LAN between buildings), spread spectrum (widely used, cost effective and uses less power, it broadcasts signals over a random series of radio frequency which is received by the receiver, hopping between frequencies in coordination with the transmitter) and infrared (uses infrared signals to transfer data and is able to carry a high bandwidth).
POS system suffers from a variety of risks associated with the security, privacy and confidentiality of POS data.
Security- In case if the POS system is running on an older operating system and there is no extended support or the extended support has lapsed then such circumstances give rise to the entry of hackers into the software leading to the exposure of POS data. Moreover, data related to the customer and company suffers from risks in cases where the POS system itself is fraudulent. Also, hackers can take the control of the machine and can easily navigate throughout the network and gain access to any data by phishing. Hackers also adopt skimming by installing hardware on the POS device which enables them to scan the credit card information (Gee, 2014).
Risks Associated with POS System Use
For protecting the system, first of all the default password must be changed. If the system is maintained by a third party vendor, then the policies regarding the passwords must be discussed. The same passwords must not be allowed for use by the vendors as it does for other clients. Moreover, antivirus software must be installed on the POS system (Pofeldt, 2014).
Privacy- POS systems contains all sorts of personal information including name, address, email address, city, state, birthday, credit card information, purchase history, in- store video monitoring, etc. hackers hack these systems of the companies with the help of server hacks, spyware, etc. and obtain the such information for their own purposes (Point of Sale, 2017).
Privacy of the data of customers can be protected with the help of updating the POS on regular basis with relevant security patches. Moreover, employees must also be trained to follow security protocol (Restaurant POS Central, 2016). Multi-biometric systems can be used as it allows extraction of secure identifiers and ensures that the privacy of the users biometrics is not compromised (Climato, Gamassi, Piuri, Sassi & Scotti, 2009).
Confidentiality- The confidence of the consumers of the Four Seasons is under threat as a result of a confidentiality breaches. When the information of the customers is accessed by someone who is not authorized to view it, the confidentiality is breached.
Various softwares available in the market can be utilized for protecting the confidentiality of the data of the consumers. Such software protects the confidential data against the known, unknown and emerging threats. It protects the POAS machines from malware and external threats along with providing reliable VPN connectivity (Check Point, 2018).
Therefore, it can be concluded that the best use of technology is made by the garden centre for the benefits of the business. The use of POS systems has allowed this organization to gain operational efficiency and competitive advantage by taking the best advantage of the business data (POS Nation, 2018). Moreover, this system helped in efficient decision making relating to the production of items and has ultimately resulted in higher profits.
It is recommended that the hardware and software must be updated on regular basis by the garden centre in order to protect the security, privacy and confidentiality of the data of the consumers. Moreover, WAN can also be utilized for establishing telecommunication network which will be linked with a remote location.
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