(pdf) Impacts of Information Technology on Businesses

IMPACT OF IT ON BUSINESS
Introduction
The point of sale involves place and time whereby a transaction of retail is finalized
without the remainders of dues in the parties engaged in the business. It enables the seller to
compute the amount a customer owes them and afterwards make an invoice and offer several
options for the various ways of paying. The system of POS currently is becoming more popular
since it eliminates the need of the use of tags of prices and if present, the window of inventory
may be used to deal with it. The POS also assists in implementing various types of programs of
royalty and discounts which help in attracting customers in purchasing of commodities or
products.
Advantages and disadvantages of the POS system.
The use of the new system of the POS is advantageous in that; it allows its custodians to
keep track of important data of the business from transaction of sales immediately during the sale
hence doing away with manual tracking of the sales. It also processes data and stores it from
selling and at the same time updates the inventory and also compiles the history of the sale. This
does away with relying on entry of transactions sales manually and reduces the units of inventory
of the sold items. Besides the provision of the register of cash, the POS also provides more
functionality of robust in tracking distributing, inputting and tracking of the data so as to offer
helpful information for operating and managing businesses. The POS also provides reports that
are used by the business people to determine the real cost of items and their profitability. (Lum,
J, 2008)
Besides being advantageous, the POS also has some draw backs such as; it relies mainly
on connection of network which is continuous and also an ISP for maintaining it when it’s web-
based. Hence, if the internet fails, one cannot access the POS system. Another problem is that,
the system needs updates of the software frequently which can be very expensive and also
consumes a lot of time. Another thing also is the few required for licensing and for the purchase
of the software if one needs to expand it. There is also a fee charged monthly as fee of
subscription that can lead to reduction of the earnings of a business. (M.Weber & P. Kantamneni,
2013)

Systems that are software-based are less convenient to use since they are complicated and
are not available easily. The hardware associated is also mandatory which is needed to make the
connection between the terminals of the hardware and the internet. There is risks of security of
the finance when it comes to the payments made online since debit cards’ and credit cards’
details may be exposed which may lead to fraud. (Edwards et al., 2016)
Competitive advantage in the POS
Despite of the disadvantages of the POS, it will assist companies in gaining advantages of
competition whereby the owners are able to comprehend their businesses by reviewing of reports
and realizing which products were offering good profits and the ones lagging behind. Through
that, the business is able to shift to the products offering good profits and price the products
effectively. Since those reports are offered accurately and at the right time, the business is able to
plan and run effectively and compete with other organizations.
Advantages of Centralized Database.
The POS also offers a centralized database which offers a lot of benefits to the business
such as efficiency. The business is able to maximize the analysis and making of reports of the
data accessible efficiently. This comes as a result of integrating the separate data from several
departments such as the portal of e-commerce, department of the customer service and the POS.
Retrieval of answers needed to respond to queries raised is easily done. Also, centralizing the
data can assist in realizing the behavior of the customer based on the reports made from different
domains such as the history of purchase, responses to campaigns among others. The reporting is
done efficiently. (Falzone, L. & Ciabarra, 2012).
Another benefit is that, centralizing data reduces the cost of processes carried out by the
business and making them more efficient. Marketing and data of the customer is controlled in a
good way when data is centralized and time and effort spent to reconcile and manage the data is
reduced. This helps in better resource utilization which plays a good part in the management of
the cost involved. The money and time that is saved when integrating the data may be utilized for
productive activities such as initiatives that are strategic which can lead to better savings for
businesses. The commitment in line of centralization of database may results in good fruits of
optimizing operations of a business and enhancing the experience of a customer at the end.

Another advantage of the centralized database is that it offers quality data. Since the
records of customers keep on changing and require to be quickly updated, the need for data
centralization becomes vital in order to maintain data quality. The process of managing the
quality of data may be complicated since it requires merging and matching of the records of the
customers using various criteria. The aim of the process of consolidation is to eliminate
duplication of data and can help in the improvement of efficiency and quality. The routines of
management so as to maintain the data quality is a process that is ongoing. Depending on the
business type, the audience targeted and the capability of the operations, the procedure may not
be similar. However, regularly updating the data may help the business in unlocking its potential
fully towards marketing at the end. (Swartz, J, 2014)
Decision making in POS
The POS also helps in making of the decisions regarding the business operations. This is
achieved since the POS is able to maintain data of the inventory which is accurate. Decisions
regarding the number of units of a product to order can now be based on counts of inventory that
are accurate which are made possible by the POS. (Deaton, D.W. and Gabriel, R.G, 2009). They
no longer need to be based on speculations regarding the units of the inventory. The businesses
are able to operate with units of inventory that are leaner. The reports of the system offer
transactions’ details for an item of inventory, for example the number of items purchased, wasted
and sold. The reports also provide information regarding the products offering profits and also
the products that are less profitable. The owners are able to make a decision regarding those
products and they can move to the products that are more likely to boost their business.
With the knowledge of the costs of the products, the owners are able to price products
with a price that will bring more profits to the business. (Steckel, J.H., Gupta, S. and Banerji, A.,
2009). The changes on the price can be done on permanent or temporal basis and still maintain
margins of products which are acceptable. Information reporting that is timely and accurate helps
owners to be effective in managing the operations of the business. The system is also able to
process inventory, sales and transactions of sales immediately which helps in reduction for the
need of entry of data on the paper which saves time that may be used in proper management of
the business. This enhances proper decision making. (Nichols et al., 2015)

POS telecommunication
The POS system should use the Local Area Network (LAN) since the software is used
within the same physical area hence it LAN would be more appropriate. The wired technology is
preferred and the cables to be used should be the ethernet cables. (Seflova, P. et al., 2012).
Risks in the POS system
The POS system is exposed to various security threats which include insecurity. This can
be experienced from the network whereby hackers can inject setups that are weak and steal
information, for example the number of the credit card the data contained in the account of the
business. (Higgins, G.M., 2014). Skimmers may also install a hardware inside the system of
Point of Sale and steal confidential information such as the details of a credit card and send it to
the hackers. Devices that are suspicious should be checked out in the system to avoid that.
Workers handling the systems should also be monitored and measures of security put in place so
as to avoid access of the system which is unauthorized (Stoutenburg et al., 2012). A check of the
routine that is regular should be performed on the system so as to evade the attacks of security by
skimmers. Privacy may also be compromised when hackers acquire information from the
manufactures since they are the ones who provide default passwords.
The business can be protected against the risks mentioned above by the use of passwords
that are strong and changing passwords that are default immediately after installation of the POS
system. (Barton, B., 2010). Keeping of passwords in a network that is protected using a password
can also help in reducing the risks. Update of the applications of the POS may also protect the
business since latest applications may be more secure. Restriction of the access of the internet to
the system of POS terminals or computers may also help in preventing the users from revealing
confidential data online. Finally, the use of authentication of two factor offers an additional
security layer to the process of authentication. (Valliani et al., 2013)
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.

References
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