The Benefits and Risks of Implementing a Point of Sales System in Small and Medium Sized Enterprises: A Case Study of Four Seasons Greenhouse and Nursery

This report evaluates the benefits and risks of implementing a point of sales system in small and medium sized enterprises using Four Seasons Greenhouse and Nursery as a case study. It discusses the advantages and disadvantages of the new POS system, associated security risks and approaches to address those risks.

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IT
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Author Note

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Executive Summary
The purpose of this report is to understand the need of technology in business. The report takes
into consideration the example of Four Seasons Greenhouse and Nursery in order to evaluate the
business benefit of implementing a new point of sales system. The organization previously
maintained manual registers for record keeping that affected the business in a negative manner.
The implementation of the POS system helped the organization in increasing the operational
efficiency. The advantages and disadvantages of the new POS system is discussed in the report
along with the associated security risks and the approaches to address those risks.

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Table of Contents
Introduction..........................................................................................................................3
1. The Advantages and Disadvantages of POS..................................................................3
2. Achieving Competitive Advantage with the new POS....................................................6
3. The Advantages of having Centralized Database...........................................................6
4. POS System in Facilitating Decision-Making................................................................7
5. Recommended option of Telecommunication: LAN......................................................9
6. Risks that POS bring........................................................................................................9
Conclusion.........................................................................................................................10
Recommendations..............................................................................................................10
References..........................................................................................................................11
Appendix............................................................................................................................13

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Introduction
Use of computers and information system are essential to maintain and manage almost
every business irrespective of its size and type. Not only the large business enterprises, but also
smaller businesses are making use of technology for easier management and to gain business
profits. The use of technology is small and medium sized organizations are limited mainly
because these organizations do not have the expertise and the resources of that of large business
organizations. The report discusses the adoption of point of sales (POS) system in Four Seasons
Greenhouse and Nursery that is located in Colorado. This nursery is similar to many other
businesses and garden centres that make use of manual registers in tracking and maintaining the
inventory, sales and details of the products. The aim of the report is to establish the fact that the
benefits of technology in small and medium sized enterprises are just as crucial to the business
operations as it is for the large organizations (Pearlson, Saunders and Galletta 2016). The
information tracking with the help of manual registers resulted in negligible profit for the
organization or business loss. The Four Seasons nursery adopted POS system in the year 2008
that helped the organization in gaining certain business benefits (refer to appendix). The report
discusses the benefits, advantages and disadvantages of the new POS system along with the risks
associated with the use of such information system in the following paragraphs.
1. The Advantages and Disadvantages of POS
Point of sales systems are mainly designed to optimize the daily business processes. It
helps in eliminating the need of paper work that is associated with the tracking of sales and
inventory management. This process helps in saving a lot of time as it eliminates the need of
manual calculations (Stair and Reynolds 2013). The use of POS therefore improves the

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efficiency of business management by generation of accurate reports, which in turn helps in
enhanced decision making. The advantages of implementation of POS in Four Seasons
Greenhouse and Nursery are as follows-
1. The new POS system allowed the owners of the nursery to track useful business
data immediately at the time of sales. The live report generation eliminates the
chances of human errors by eliminating manual tracking of the sales related data
(Pearlson, Saunders and Galletta 2016). The system furthermore, automatically
updates the inventory data and compiles the sales history in real time.
2. The new POS system that is implemented in Four Seasons Greenhouse and
Nursery provides much more than a cash register. This system therefore provides
a robust functionality in tracking and distributing the useful business data to the
managers of the organization. Therefore, the new point of sales system helps in
effective decision making as the accurate data associated with the number of sales
and inventory items can be gathered.
3. The calculation of the inventory data and current inventory units are no longer
based on speculations as the new point of sales system provided all the necessary
and useful information about the inventory units and the information that is
required to operate and manage a business.
4. With the help of the data that is gathered from the POS system, accurate profit
margins of each product could be easily tracked. The implementation of the new
POS system proved that the owners had a very little knowledge about the actual
price or profit of a product that resulted in business loss. The data obtained from
the new POS system proved that some products were less profitable that the

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owners thought it would be. Therefore, the use of new point of sales system
enabled the owners in appropriate pricing of the products, which increase the
profits that the organization made.
5. On time reporting of the sales and business information helped the managers in
effective management of all the operations including sales, inventory and
purchasing transactions (Van Der Aalst, La Rosa and Santoro 2016). This
eliminated the need of data entry on paper thus saving a lot of time.
6. The new POS system further enabled the managers to have a direct control over
the employee schedule. The managers could effectively review and allocate the
labour expenses to particular departments and functions. Therefore, the new point
of sales system helped in easier management of the staffs and labour schedule.
These are the main advantages of implementation of new point of sales system in
business. However, there are a number of disadvantages as well, which are as follows (refer to
appendix)-
1. The operation of a point of sales system needs a reliable internet connection as the
entire system is web based.
2. The software updates are quite frequent which might be time consuming and
expensive.
3. There are certain security issues associated with the use of point of sales system
as it is generally web based and therefore, there are high chances of data breach
and loss of data.
4. The cost of deployment of a point of sales system is quite high. Furthermore, a
certain amount of money is to be deployed as maintenance cost as well.

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2. Achieving Competitive Advantage with the new POS
With the help of a new point of sales system, a business can gain competitive advantage.
This is possible as it helps in easier management of the different business operation. The accurate
data about the sales and inventory helps in correct estimation of the business needs that helped
the business in gaining a competitive advantage. With the implementation of the new point of
sales system, proper pricing of the products were possible which helped in increasing the profits
of the organization. This in turn helped the Four Seasons in gaining competitive advantages. The
productivity of the employees increased with the implementation of new point of sales system
(Baden-Fuller and Haefliger 2013). The data and reports generated by the POS system helped in
keeping a track of the employee schedules thus increasing the employees’ productivity thus
giving a competitive advantage. This is the process by which the enhancement of the different
business operations with the help of new POS system helped the organization in gaining
competitive advantages.
3. The Advantages of having Centralized Database
The centralized data management helps in easier transposition and transformation of the
data. A centralized database is generally managed by experienced technical and statistical staffs
to suit the various requirements and a specific need of a particular system, which is in this case,
is POS system (Osman and Knottenbelt 2012). The advantages of having a centralized data base
are as follows-
1. In a centralized database, the data is stored securely with proper administration.
The data in from a centralized database can only be accessed by someone who is

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authorized to access the data. Therefore, data security is one of the main
advantages of a centralized database.
2. In a centralized database, data sharing in different formats is possible.
Furthermore, the data stored in a single location can be easily accessed by the
multiple sites or persons simultaneously, which is another significant advantage
of the POS system.
3. The data in a centralized database are regularly backed up that provides an easier
means of disaster recovery (Coronel and Morris 2016). Having a proper disaster
recovery plan is essential for securing the important data and information
associated with a business. Improved data preservation is therefore another main
advantage of using a centralized database system.
4. The cost of implementation of a centralized database is quite less. The centralized
storage does not require a business to invest heavily on servers which is another
main benefit or advantage of a centralized database.
5. Use of centralised database helps in improving the speed and reliability of data
access and it employs lesser redundancy in data storage.
The above discussed points give an overview of the different advantages of using a
centralized database.
4. POS System in Facilitating Decision-Making
The use of the point of sales system helps in enhancing the decision making. The process
of decision making is enhanced as the live data about the inventory and sales can be easily
recorded and tracked. Knowledge about the inventory sales helps in easier management of the

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business operations of the organization. The use of the point of sales system facilitates decision
making in a number of ways.
The point of sale systems helps in processing the different business activities in an
effective manner. With the help of the POS system, easier tracking of the live business
operations are possible along with the easier tracking of the employee and labour schedule
(Laudon and Laudon 2016). This helps in easier monitoring of the employees’ work schedule,
which in turn helps in management of the business activities more effectively.
The point of sales system eliminated the need of manual tracking of the information and
maintenance of the manual records. Effective tracking of the information in manual process may
not be possible. There are a number of reasons behind the ineffectiveness of manual data
tracking in comparison to the automatic tracking of information as supported by the new point of
sales system (Stair and Reynolds 2013). Human errors can be a possible cause of ineffective
information tracking in manual system. Furthermore, it is a time consuming task. Therefore, the
effective management and tracking of the information by maintaining manual records may not be
possible.
With the help of the new point of sales system, the questions that address the quantity of
inventory units, the quantity of sales, accurate price of the products and their profit margins
could be effectively answered (Jain and Paul 2013). Answer to these questions further helps in
proper management of all the business operations associated with the organization.
The information provided by the new point of sales system helps in generating daily
progress reports that helps in proper monitoring of all the business processes of the organization.
The data about the sales and inventory units helps the organization in operating on leaner

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inventory units, thus helping the business owners and the managers in effective management of
all the business activities associated with the organization.
Easier management of the products, sales, employees’ schedule and the inventory items
therefore enhances the process of decision making as effective decisions can be made based on
the accurate reports generated by the new point of sales system.
5. Recommended option of Telecommunication: LAN
The telecommunication option that is recommended for connecting the devices associated
with the new point of sales system is LAN or Local Area Network (Wang et al., 2015). A local
area network can be described as a group of computers that share a common link to the servers,
thus interconnecting all the digital devices that are present in a districts geographical area (Haigh
et al., 2012). A metropolitan area network is used when the interconnection among the computer
resources in a wider geographical area is needed. Wide area Network or WAN is considered for
an even larger geographical area (Wang et al., 2014). Since Four Seasons is a small nursery, the
choice of the LAN is appropriate.
The choice of media for establishing the LAN connection is wireless technology. It will
help in creating a link to the server. The wireless technology is chosen instead of wired media as
it is more advanced and easier to implement (Arnon et al., 2012).
6. Risks that POS bring
Since POS is mainly a web based system, there are certain cyber security risks that can
challenge the security, privacy and confidentiality of the data stored in the system (Stallings et al.
2012). Furthermore, it is exposed to the threats of hackers and insider threats (Von Solms and

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Van Niekerk 2013). These issues can be addressed by ensuring proper authentication and access
control to the data stored in the system.
Conclusion
The report gives an overview of the use of point of sales system in business. The business
of Four Seasons could achieve a greater business profit after replacing their manual system with
the point of sales system. The advantages, disadvantages and the issues associated with the use
of POS are discussed in the report. It is seen that the use of POS increases the operational
efficiency of a business.
Recommendations
1. The security issues are needed to be addresses in a strategic manner by enforcing
access control.
2. Regular data backup and timely installation of updates is necessary.

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References
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Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information
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Stair, R. and Reynolds, G., 2013. Principles of information systems. Cengage Learning.
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Appendix

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