Analyzing Modern POS Systems

This assignment analyzes the advantages and disadvantages of implementing a new point-of-sale system compared to traditional methods. It delves into the various technologies used in POS systems, including LANs, WANs, databases, and security measures. The document also discusses common types of attacks targeting POS systems and proposes solutions to mitigate these risks. Finally, it highlights how POS systems facilitate data-driven decision making for businesses.

1
Impact of IT on Business

2
Summary
Four Seasons Greenhouse and Nursery is a small nursery business which is located in
Colorado. The company used manual registers and traditional ways to manage its inventory.
But in 2008, the company implemented point-of-sale systems to manage the inventory and
the data.
POS systems helped in facilitating decision making processes. The easy accessibility of the
data made profits to the company as it saved time. The telecommunication process of the
POS systems is recommended. Apart from this, the risks of POS systems is analysed and then
description of measures taken to solve these risks are determined. The information
technology system creates a solid infrastructure to process and report the businesses
operations for the entire enterprise.
With the example of Four Seasons Greenhouse and Nursery it has been explained that how
technology can realize benefits for a business. The ability for organizations to remain
competitive and agile is crucial. These systems allow organizations large and small to
leverage business data to gain a competitive advantage and operational efficiency.

3
Contents
Impact of IT on Business...........................................................................................................1
Summary....................................................................................................................................2
Introduction................................................................................................................................4
Advantages and disadvantages of POS system..........................................................................5
Business gain competitive advantages.......................................................................................5
Advantages of centralized database management system..........................................................6
Decision making process............................................................................................................7
Technologies of POS systems....................................................................................................7
Risks of POS systems.................................................................................................................8
Prevention of risks......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

4
Introduction
This report depicts the use of information technology which is needed by every industry size
and type of business particularly in small businesses. The benefits of technology for small
and medium sized enterprise are explained by the help of Four Seasons Greenhouse and
Nursery which is located in Colorado. Prior to the implementation of the point-of-sale system
the company used manual registers to track and maintain the inventory which was very
difficult.
The point-of-sale system was implemented in 2008 and it allowed the owners to track useful
business data from the sales transactions. This system helped in decision making process for
an inventory item, such as how many were purchased, discarded, and sold. With the help of
this system, the organisation was able to maintain its data accurately and as a result it lead to
profit of the company.

5
Advantages and disadvantages of POS system
The implementation of the new POS system had many advantages and disadvantages.
Advantages of the new POS system-
1. There was no need of tracking sales manually; the system tracks the useful business
data from the sales transactions at the time of the sale.
2. Eliminates reliance on manual entry of sales transactions and reduction of inventory
units for the items sold
3. Provides robust functionality in inputting, tracking and distributing data to provide
useful information to operate and manage the business
4. Helped with decision making by maintaining inventory data
5. counts eliminate the guesswork on how much to order, helping the business to operate
on leaner inventory units (Market, 2016)
6. The system's reporting can provide the detail transactions for an inventory item, such
as how many were purchased, discarded, and sold
7. The more detailed cost reporting by item helped them to understand which products
contributed the most profit to the operation (McCarthy, 2016)
Disadvantages of the new POS system-
1. Security Risks-The customers who were using credit cards or debit cards were at high
risks of losing their PINs to other customers. The keypads are not hidden and hence
anybody can use their authentic information.
2. Costly software upgrades-For upgrading the software, every time the company has to
pay an additional amount.
3. Hardware problems- It gets very difficult to fix the hardware are which are used in the
POS systems. It is very costly as well as time-consuming (Hamilton, 2013).
Business gain competitive advantages
The POS systems help the business gain competitive advantages in the following ways;
 Speed and efficiency-With the usage of POS systems, the speed and efficiency of the
transactions increases. As it reduces manual entry of the sales the data gets updated
very quickly.

6
 Accountability- POS systems let the business to monitor the staff and the record
continuously. If the owner will have a full record of the staff activities, the staff will
be serious about their work. This will also result in an encouraging spirit of
competition within the employees. The employees who undergo unusual and wrong
sales measures will be identified easily.
 Financial Accuracy- The point-of-sale systems increases the financial accuracy of the
business. Before the use of POS systems, the businesses used to seek the calculation
of the staff members which mostly leads to errors. The POS systems assure that the
charging and pricing structure remains consistent with the business.
 Reporting-With the help of point-of-sale systems it gets easy to manage the business
performance reports. This report consists of annual profit margins, list of top selling
products, etc. By analysing these reports the company gets to know their overall
performance and hence can apply strategies to improve the business more effectively.
 Stock Management-The point-of-sale systems are also used to manage the stocks of
the business. The company can easily get a review of the current level of stocks and
hence can identify the areas where enhanced level of stock is needed. These systems
reduce the amount of time which is taken in stocktaking operations (Aberle, 2017).
Advantages of centralized database management system
The advantages of centralized database management systems are:
1. It improves data security-The stored data is highly secure as only the administration
has access authorization, nobody can access the data without the permission of the
administrator. Centralised data management encrypts the virtual private networks and
provides password protection.
2. Enhanced data recovery-Centralized storage consists of a fault-tolerant setup which
helps in preservation and recovery of data easily. Along with the data is backed up on
a regular basis and hence at the time of server failure this data can be used.
3. Data sharing-The centralized data management repositories also creates and exports
data in many different formats. Hence, it gets very easy to share data to multiple sites
in different formats. Along with this, the data stored at a particular location can be
accessible at multiple sites but under the authorization of the administrator.

7
4. Reduces cost- The maintenance costs of the central servers is very less as compared to
the maintenance costs of multiple computers. Apart from this, the space required for
data storage and processing also gets reduce (Gillenson, 2008).
Decision making process
The POS systems facilitates the decision making process as the point of sale systems is able
to track beneficial information immediately to the point of sale. This can be from ordering,
diminishing stock to identifying best sellers. Decisions like how many units of a product to
order were made easily and the reports provide the details for an inventory item. This can be
done manually but not as effectively from a time management standpoint. The POS systems
automatically help a customer to make a decision for example, what the customer needs and
streamlining the order of the customers. Questions that could be answered would be if subpar
selling items are taking up too much space for the hot items. The information can be used to
better manage the business as all the information will be collected on the same platform and
hence accessibility will be easy (Gibson, 2015).
Technologies of POS systems
A POS system can be connected to a LAN i.e.it can be connected to two or more systems to
exchange information and share common resources with them. A POS system may need
many advanced networking software, these software’s transmits information from one station
to other. All the connected stations consist of a network card. Benefits of having a LAN
connected POS system are:
1. All the stored information has a shared access.
2. All the information which is collected by each and every computer has shared storage.
3. Whenever any new software is installed on the server it can be accessed by each and
every station (McCabe J. , 2010).
WAN i.e. wide area network is a type of network which is used over a wide geographical
area to transfer information. POS systems are also connected with WAN and hence all the
LAN’s are connected to the internet.
POS systems also makes use of metropolitan area network i.e. MAN. This network is similar
to LAN but their range is better than that of LAN. It can also connect many LANs together to
form a bigger network (Aberle, 2017).

8
The various types of cables used for wired technologies are:
1. Co-axial cables
2. Twisted-pair cables
3. Fibre-optic cables
For wireless technologies wireless communication is used for example, LANs, Ethernet,
Wireless Phones, Satellites and Wi-Fi (Cmscompu, 2016).
Risks of POS systems
The point-of-sale systems are based on many different types of operating systems. As the
operating systems are prone to attacks therefore POS systems encounters many security
issues. Various types of ways by which attackers attack POS systems are:
1. Accessibility- These operating systems provides easy accessibility to POS system
data.
2. Fraudulent Devices- Many people use these fraudulent devices and get access of all
the confidential information of the customers.
3. Key loggers- In this situation, attackers use virus codes and read all the information
which is entered by the customers. The attackers makes up the payment systems and
then install malware and records the credit card swipes and hence gets access to the
information of the user (Gomzin, 2014).
4. Network sniffers- The attackers place the NIC into private mode and easily monitor
the traffic on that particular area of the system. The information is copied in the form
of data packets and then the hacker gets access to it.
5. Memory dumpers-Whenever a card is swiped, for a few seconds the track data
remains in the memory until the time it is send to the payment application. The
attackers make use of these few seconds and access the information (Kan, 2016).
The POS systems affect the privacy and confidentiality of the customers and hence the
privacy of the customers is at high risk. The details which can be accessed are the credit
history and the purchase history, the mobile device activities, the education records along
with the web browsing activities.

9
Prevention of risks
There are many ways by which the attacks on point-of –sale systems can be prevented like,
1. Monitoring- By proper monitoring the devices and the systems the attacks can be
reduced. The devices used for the transactions should be monitored so that no
fraudulent devices are used.
2. Encryption- If the customer’s data will be encrypted it would be difficult for the
hackers to access the information. The data of the customer should be encrypted
throughout the payment process.
3. Testing- Before buying or establishing the point-on-sale systems a proper testing of
the systems should be done. The test should see if there are any sort of vulnerabilities
in the system or not and that the system is highly secure (Kan, 2016).

10
Conclusion
The report discussed the benefits of the new point-of-sale system along with its advantages.
A brief comparison of the traditional approach and the new approach was done. The way
POS systems facilitate decision making is discussed and the various types of technologies
used is determined. The types of attacks which the POS system encounters are discussed and
remedies to these attacks is analysed.

11
References
Aberle, C. (2017). POS Multi-user systems and Multi-site systems.[online] Available at:
https://pointofsale.com/POS-101/POS-Multi-user-systems-and-Multi-site-systems.html
[Accessed 21 January 2018].
Cmscompu (2016). What is LAN, WAN, MAN, SAN, CAN, PAN and GAN ?. [online]Available at:
http://www.cmscomputer.in/blog/what-is-lan-wan-man-san-can-pan-and-gan/[Accessed 21
January 2018].
Expert Market (2016). What Is The Advantage Of A POS System?. [online]Available at:
https://www.expertmarket.com/pos/pos-system-advantages[Accessed 21 January 2018].
Gibson, D. (2015). Managing risk in information systems. Burlington, MA: Jones & Bartlett
Learning.
Gomzin, S. (2014). Hacking Point of Sale. UK: John Wiley & Sons.
Gillenson, M. (2008). Fundamentals Of Database Management Systems. UK: John Wiley& Sons.
Hamilton, W. (2013). The Key Disadvantages Of POS Systems - National Processing.[online]
Available at: https://nationalprocessing.com/blog/key-disadvantages-pos-systems/
[Accessed 21 January 2018].
Kan, M. (2016). Here’s how businesses can prevent point-on-sale attacks. Available at:
https://www.csoonline.com/article/3137177/security/heres-how-businesses-can-prevent-
point-of-sale-attacks.html[Accessed 21 January 2018].
Martinez, J. (2016). Top 8 Security Vulnerabilities Threatening Your SMB's POS System.
[online]Available at: http://in.pcmag.com/microsoft-windows-vista/103124/feature/top-8-
security-vulnerabilities-threatening-your-smbs-pos-sys [Accessed 21 January 2018].
McCabe, J.D. (2010). Network Analysis, Architecture and Design.USA: Elseiver.
McCarthy, M. (2016). The Benefits of Moving to a Point-of-Sale (POS) System | AllBusiness.com.
[online] Available at: https://www.allbusiness.com/the-benefits-of-moving-to-a-point-of-
sale-pos-system-10206841-1.html [Accessed 21 January 2018].

12
Nickernson, R.C. (2001). Business and Information Systems. USA: Prentice Hall.