Impact of IT on Business: Advantages and Risks of Point of Sale System

This article discusses the impact of IT on business, specifically the advantages and risks of using a point of sale (POS) system. It covers topics such as tracking sales, competitive advantage, centralized database, decision making, POS telecommunication, and risks in the POS system. The article also provides mitigation strategies for the risks. Course code, course name, and college/university are not mentioned.

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Introduction.................................................................................................................................................2
Advantages and disadvantages of the POS system......................................................................................2
Tracking of sales......................................................................................................................................2
Competitive advantage in the POS..........................................................................................................3
Advantages of Centralized Database...........................................................................................................3
Accuracy and consistency........................................................................................................................3
Reduced expenditure..............................................................................................................................3
Decision making in POS...............................................................................................................................4
POS telecommunication..............................................................................................................................5
Risks in the POS system...............................................................................................................................5
Conclusion...................................................................................................................................................6
BIBLIOGRAPHY.............................................................................................................................................7

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IMPACTOF IT ON BUSINESS
Introduction
The point of sale terminal is a system for processing payments for goods and services
offered to customers in a business premise. Using POS, a cashier on a premise processes an
invoice of what amount of money the customer owes the business for the goods and services
offered then offers the customer with the available modes of payment. Point of Sale Terminal is
gaining popularity as it beats the logic of using price tags on goods the window of inventory may
be used to deal with it. It also assists in implementing various types of business processes like
royalty and discounts which help in attracting more customers to the business premise or
organization.
Advantages and disadvantages of the POS system.
Tracking of sales. Point of sale terminal helps in keeping track of the daily sales
by recording the customer details, the goods or services they bought, the time of sale and the
total amount of the sale (Edwards et.al 2016) The system generates reports on the sales made on
a daily basis therefore doing away with the manual way of keeping track of the sales. The point
of sale reduces the time of sale due to automation of the process of selling therefore selling
becomes easier and faster. It also offers inventory generation, distribution and stock of goods that
offers required insights during decision making for the managerial level and operational level of
the business. During decision making the reports generated by the point of sale is very crucial as
it provides insights on management of sales, stock of goods, how to maintain customers and
suppliers and how to improve the business profits.
Despite having its positive impacts on a business POS also has its cons. The computers
on a point of sale are interconnected, if the network fails the business processes come to a halt at
the business premise (Cunningham et.al 2015) If a POS system cloud-sourced or web-based it
requires ISP for maintenance which is internet dependent, therefore if the internet fails the
business processes in the business premise come to a halt until the internet connections are
configured. Upgrading of the point of sale system is very expensive and time consuming which

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is a draw back to the business in terms of money and time. Licensing of POS expansion during
upgrading is also expensive and affects the business negatively financial wise.
Software based systems are not that convenient because they are very complex and are
scarce to find. The hardware specifications are also necessary for the interconnection between
the computer terminals of the business and the internet to access the point of sale terminal. For
cloud-based and web-based point of sale software, there is a security risk through the wiring of
payments online where fraud cases tend to be so many.
Competitive advantage in the POS
Through the generation of reports on the sales made, the customer relationship to the business,
automatic invoice and inventory generation and the stock management, a business or a business-
oriented organization is able to maintain itself in the competitive niche of business nowadays.
The feature of report generation gives the management of a business, insights to make good
decisions on how to achieve a higher profit, maintain their suppliers, make more customers
coming to the business and maintain their stocks. By doing so a business remains competitive.
Advantages of Centralized Database.
Accuracy and consistency. Point of Sale utilizes the centralized database
which is common for all the business processes, in that all the transactions update one database
(Coronel and Morris 2016) All the business processes like electronic commerce, invoicing,
inventorying, sales management and customer relationship update one database. This ensures
that data in the database comes from one consistent state to another, whereby a transaction has to
wait for one to execute to completion for it to start execution (Zheng et.al 2017) This also
ensures the accuracy of the data and information in the centralized database for the business. The
feature that a transaction only updates a common page, table or form in a database when another
transaction that was executing before it comes to completion is what enforces accuracy.
Reduced expenditure. With the utilization of a centralized database for the
point of sale, the time required to retrieve data is much less as compared to retrieving data from a
decentralized database. Centralization of the database is what makes the point of sale terminal
system fast and efficient during the sale of products and services in the business due to the
reduced time factor. Setting up decentralized database structure is more expensive than setting up

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the centralized database structure (Zheng et.al 2017) The extra money that could be used in the
set up of the decentralized database would be used in the addition of stock or doing more
productive tasks like upgrading the point of sale system with new business processes.
Better quality of data and information stored. With decentralized database for a business,
data and information may be redundant in that it appears in many tables of a database while in
real sense it is supposed to appear once in one table. This creates a huge problem during
querying for instance retrieving a price for a certain good picked by a customer and two different
prices appear for the same product, it makes the cashier confused on what to choose. With the
accuracy and consistency offered by the centralized database utilized by the point of sale will
enhance the quality of data and information used by the business, in that there will be no or less
redundancy and duplication of the data and information. Therefore a scenario like the one above
could be avoided because the data and information in the centralized database is accurate and
consistent.
Decision making in POS
Decision making is a very vital process in a business today. It determines whether the
business will either succeed or fail. The point of sale comes in handy in assisting the
management of a business in making sound decisions that will propel the business forward.
Generation of the inventories, invoices, reports on the daily sales, reports on the customer
intimacy and stock, are the basis of making a good decision for the business. With the invoices
and the daily sales report the business will be able to determine the most bought product and the
worst bought goods and products so that when it comes to stock management there will be
priorities on what goods to increase in stock and those that less urgent to increase their stock.
The stock reports, enables the business to update the stock just in time and prevent running out of
products. The automatic generation of invoices maintains the accuracy in the accounts.
The timely generation of the reports, invoices and inventories ensures effective and
efficient delivery of services and goods to customers. The recording of the sales daily also
records the selling duration. For improvement in the delivery of the services and products to the
customers, the business uses the selling duration records to evaluate how they can improve the
selling duration. The decision here is made based on the records on the selling duration and the
feedback the business gets from the customers. For a business to maintain the competition from

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other businesses it has to find ways of improving customer intimacy using the records in their
database to find the reason why a certain product is slowly reducing in stock and maybe decide
to reduce its price and see how that goes.
POS telecommunication
Point of Sale software should utilize the Local Area Network because its operation will
be based on a small physical area (Brundage 2015.) which is the business premise. The wired
technology is preferred and the cables to be used should be the Ethernet cables (Dietrich et.al
2016)
Risks in the POS system
Web-based and cloud sourced POS systems suffer from code injection whereas the
premise-based POS systems may suffer from botnets which compromises the security. Code
injection can be MYSQL injection (Som et.al 2016) or x scripting (Gupta & Gupta 2017) where
a hacker injects malicious code to the software codes to gain control of the flow of execution.
Once the malicious person gains control of the execution flow he or she can achieve any
malicious activity he or she wants. This invades the privacy of the business information. Botnets
are malicious networks inserted in a network for malicious reasons without the business
knowledge (Bertino and Islam 2017). The business might be operating on the botnet for a long
time without noticing but the malicious person is acquiring information from their database
including the security credentials like the access levels, passwords and security levels. Another
security threat POS system can suffer is attack from a virus that cripples the whole business
process. Denial of service attacks (Palmieri et.al 2015), where some authorized personnel is
denied services and denial of access attacks, where an authorized person is denied access to the
system are also common with the POS connected in a network.
Mitigation strategies.
Botnet attacks can be prevented by putting into place the firewalls that filter all the
events. This will enable the botnets to be discovered and the network is shut down first, then
plans to detach the botnet from the network put in place. The use of hashed passwords can be

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used to prevent MySQL injections for the web-based and cloud sourced POS systems.
Use of strong passwords which involves the combination of characters, symbols and
special characters will enable enhance the security of data and information used for the POS
system.
Encryption (Stallings 2016) of the data and information send through the network will
ensure safety of the data and information because the hacker has to crack it first before accessing
the data which will be tiresome and discouraging.
Conclusion
The Systems of Point of Sale have helped a lot in reduction of the workload of human
and also assisting in reaping of advantages of efficiency of the systems by the proprietor.
Disadvantages associated with the system are still present but they will be dealt with soon.

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BIBLIOGRAPHY
Edwards, T., Skoog, L., Babu, A. and Dorogusker, J., Square Inc, 2016. Point-of-sale
system. U.S. Patent 9,424,721.
Cunningham, C., Good, T., Kearney, S.P., Miraglia, M., Amundsen, T., Giordano, P.,
Wang, Y.P. and Zhu, X., Metrologic Instruments Inc, 2015. Point of sale (POS) based checkout
system supporting a customer-transparent two-factor authentication process during product
checkout operations. U.S. Patent 8,976,030.
Coronel, C. and Morris, S., 2016. Database systems: design, implementation, &
management. Cengage Learning.
Zheng, J., Erzurumluoglu, A.M., Elsworth, B.L., Kemp, J.P., Howe, L., Haycock, P.C.,
Hemani, G., Tansey, K., Laurin, C., Pourcain, B.S. and Warrington, N.M., 2017. LD Hub: a
centralized database and web interface to perform LD score regression that maximizes the
potential of summary level GWAS data for SNP heritability and genetic correlation
analysis. Bioinformatics, 33(2), pp.272-279.
Ilyas, I.F. and Chu, X., 2015. Trends in cleaning relational data: Consistency and
deduplication. Foundations and Trends® in Databases, 5(4), pp.281-393.
Brundage, T.J. and Rhoads, G.B., Digimarc Corp, 2015. Wireless local area network-
based position locating systems and methods. U.S. Patent 9,014,162.
Dietrich, B., Putterman, D., Peters, G. and Bullwinkle, R., Rovi Solutions Corp,
2016. Methods and apparatus for integrating media across a wide area network. U.S. Patent
9,467,322.
Som, S., Sinha, S. and Kataria, R., 2016. Study on sql injection attacks: Mode detection
and prevention. International Journal of Engineering Applied Sciences and Technology, Indexed
in Google Scholar, ISI etc., Impact Factor: 1.494, 1(8), pp.23-29.

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Gupta, S. and Gupta, B.B., 2017. Cross-Site Scripting (XSS) attacks and defense
mechanisms: classification and state-of-the-art. International Journal of System Assurance
Engineering and Management, 8(1), pp.512-530.
Stallings, W., 2016. Cryptography and network security: Principles and practice.
Pearson.
Palmieri, F., Ricciardi, S., Fiore, U., Ficco, M. and Castiglione, A., 2015. Energy-
oriented denial of service attacks: an emerging menace for large cloud infrastructures. The
Journal of Supercomputing, 71(5), pp.1620-1641.
Bertino, E. and Islam, N., 2017. Botnets and internet of things security. Computer, 50(2),
pp.76-79.