POS Systems for Small Businesses: Advantages, Disadvantages, and Recommendations

This appears to be a summary of an assignment discussing the use of Point of Sale (POS) systems in small businesses. The assignment includes an introduction, a discussion of the advantages and disadvantages of POS systems, the role of POS systems in gaining competitive benefits, the benefits of having a centralized database, and how POS systems can facilitate the decision-making process. The assignment also includes recommendations for telecommunication options for POS systems and discusses the risks associated with using POS systems. Is there anything specific you would like to know more about?

Information technologies for business

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Table of Contents
Introduction...........................................................................................................................................2
Advantages and disadvantages of the POS system................................................................................2
Advantages........................................................................................................................................2
Disadvantages of the POS system......................................................................................................3
Role of POS system in business to gain the competitive benefits..........................................................3
The benefit of having a centralized database........................................................................................4
How could the POS system facilitate the decision-making process.......................................................4
Recommend telecommunication options for POS system.....................................................................5
Risks associated with the POS system ..................................................................................................6
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

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Introduction
According to the given scenario, the information technology required the information
technologies in order to improve their performance. However, small business industries
do not have sources and expertise to design and develop information technology
strategies. The small nurseries are not able to control and manage the operational data
more effectively for which they adopted the point of sale technique. This report
objective is to analyze the importance of the POS system with their advantages and
disadvantages and how this method help for developing a better decision-making
approach. This report divided into five parts such as benefits and drawbacks of POS,
role of POS system in the business, benefits if having a centralised database, and
recommendation for the POS system, security risks associated with the POS.
Advantages and disadvantages of the POS system
Advantages
The nursery and small business industries utilized the manual process in order to track
and monitor their inventory and identify which product was realized the most profit. In
this modern ear, the point of sale is an advanced technology that allows companies to
track the data and information from the sales transactions in less time. This technique is
more effective rather than the manual process by which small business sectors and
nursery can control and monitor the company’s inventory (Seo, and La Paz, 2008). It is
observed that the POS system help SME and nursery to reduce the operating time and
enhance the efficiency of their resources. By using this process nursery and other small
sectors can increase their trust quotient amongst the supplier, and consumers. The
main advantage of the POS system is that it saves time as it allows entering of the sale
transaction data straight away during the sale (Boukerche, et al., 2008).
During the manual process data entering and collecting require more time but POS
system reduced this drawback and improve the performance of the system. One other
major attribute of this technique is that it delivers better performance for entering,
controlling and tracking data or information for a few useful business tasks. Such kind
of technology also decreases the tedious task of the guesswork to evaluate how much
stokes should be ordered (Paynter, and Edwards, 2009). It has the ability to produce the

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complete report for the transaction history and it is very helpful for increasing the
overall performance of the stock management.
Disadvantages of the POS system
There are several limitations and drawbacks of the point of the sale process that will be
discussed in this section. The most critical thing of this technique is that it is completely
depended on the continuous internet communication and ISP which is web-based
services (Lee, et al., 2015). Moreover, the point of sale process requires the regular
software updating which is more expensive and consume more time. The utilization of
information technology is risky when it comes to the card payment and consumers can
lose their private information and data through online payment. There are several risks
are also associated with the POS system such as hacking, data breach and many more
(Ramdani, Kawalek, and Lorenzo, 2009).
Role of POS system in business to gain the competitive benefits
It is observed that the POS system is secure and easy to track and data and information
and nursery and other SME can develop this technique. Such kind of technique also
helps SME and business industries in order to understand their potential of the business
and evaluating their establishment more effectively (Ståhlberg, and Maila, 2012). POS
system has the ability to produce the realization which can help business for evaluating
the loss and profits in the market and it is also very important in the competitive
market. Mainly, this system produces complete information of cost of products that can
help identify which product provided more profit.
In the given scenario SME and nursery adopted the POS system by which they can
significantly produce the cost of each product in the report form. With the help of this
approach organizations and small business enhance their business more effectively and
approachable. It is analysed that effective management of the system can help
organizations to increase their productivity and efficiency in the competitive market.
Time-saving is one of the key factors of the POS system that positively impact on the
business industries and companies. It is observed that many employees and worker
spend more time on a single task or project that creates uncertainty in the business for
which they can develop the POS system. Moreover, the manual process increases the

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rate of errors in the task due to which organization can suffer from the losses that can
be reduced through POS system because it is an automatic process.
The benefit of having a centralized database
For controlling and monitoring the data of product it is important to design the
centralized database system by which nursery and greenhouse SME can manage data
more effectively. From given case study it is analysed that the centralized database
system helps small business industries for understanding the stock of the products like
which item to order, how many sold, which product provided more profit and many
more (Zhang, Zheng, and Hu, 2008). This kind of technique also helps companies to
evaluate the marketing strategy and identifying the products that provided more profit
in the business. It also provides a way to analyse the products and items and stock from
the detailed report about the sales transaction. Therefore, the POS system is always
advantageous to have a centralised database.
How could the POS system facilitate the decision-making process
It is very crucial for the employees and SME to understand and be accurate about their
stocks and products. it is very complex for the management team to supervise when
such kind of things are managed and controlled through a manual process. Therefore,
they should develop the point of sale system that has the capability to manage the
register and entering of data through an automatic process (Khodakarami, and Chan,
2014). Moreover, this process provides a platform to manage such kind of issues and
deliver each possible solution for making decisions. From given scenario, it is analysed
that the POS system provides a very simple technique to track and update the records of
available products and items with their prices and it also evaluate the schedule of the
workers and employees which is useful for developing the better decision-making
process (Porter, and Siggelkow, 2008). The decision making involves responsibility
assigned to the employees, changes require in the employees in order to enhance the
productivity of the business and which types of products will use to increase
profitability.

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Recommend telecommunication options for POS system
There are major three kinds of telecommunication networks used in the POS system in
order to send and receive the data from one location to another such as LAN, WAN, and
MAN. LAN is the local area network which is used to connect two or more computing
devices in an office and building. The speed of this network is very high but it cannot be
used for long distance communication due to less frequency band. In the case of MAN
consumers and organization can send and receive data over a long distance but it is
very less secure rather than LAN network (Neves, Soares, and Sargento, 2009).
Generally, MAN is defined as the metropolitan area network which is used to connect
the small geographical area and two or more building located in less distance. Wide area
network (WAN) is one of the advanced networks that have the ability to connect
numbers of networks at a time and it can be used to connect large geographical area like
city, country, and the whole world. It is the combination of the LAN networks and
provides the high speed for data transferring. It is recommended that for POS system
nursery and SME businesses can adopt the WAN network because it is more secure and
they can communicate with their clients and branches from any location. The speed of
the data communication in the POS system can be enhanced with the help of wide area
network due to their several advantages like
For the given scenario it is recommended that an organization should adopt the
wireless communication because it is a more efficient, reliable and scalable network
rather than a wired network. The wireless technology sends and receives the data from
one location to another without using any connecting wires and it has the potential to
communicate over long distance (Pahlavan, and Krishnamurthy, 2011). The other
benefit of the technology is that both transmitter and receiver both are connected
through wireless networks by which consumer can communicate with SME and
organization. For wireless technology, the Wireless LAN cable can use that has the
potential to interconnect numbers of computer and physical devices with each other.
The data speed of this cable is very high rather than other and it is more secure by
which organization and nursery can secure their personal data and information
(Baccelli, and Błaszczyszyn, 2010).

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Risks associated with the POS system
The security and privacy of data both are very common risks associated with the POS
system and its impact on the performance of the business. Mainly, the POS system
collects payment through online modes like credit and debit cards due and they use
internet connectivity by which attackers can assess their networks and detect the bank
details of the employees. There are few security risks and confidentialities occur in the
POS system, for example, malware, and phishing, denial of service attack, hacking and
data breach. With the help of malicious software, criminal can enter into employee’s
accounts and block the server of the POS system. After that, they encrypt their personal
data and information.
It is recommended that nursery and other small business industries should receive
payment through cash mode rather than online methods (Rahman, Pakštas, and Wang,
2009). For reducing the security risks company and SME should develop advanced
security tools like encryption and cryptography technology to protect personal data
from hackers. Therefore SME, nursery and other business industries can reduce the
risks associated with the POS system by using all the above techniques and tools.
Conclusion
It is concluded that the small business industries and nursery organization can adopt
the point of sale system in order to improve the efficiency of the system and reducing
overall operational time. This report described the benefits and drawbacks of the POS
system and their role in the development of better decision-making approach. In the
end, the researcher also highlighted the security, privacy and confidentially risks
associated with the POS system and a recommendation is also provided in order to
reduce POS system risks and issues.

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References
Baccelli, F. and Błaszczyszyn, B., (2010). Stochastic geometry and wireless networks:
Volume II Applications. Foundations and Trends® in Networking, 4(1–2), 1-312.
Boukerche, A., Oliveira, H.A., Nakamura, E.F. and Loureiro, A.A., (2008). Vehicular ad hoc
networks: A new challenge for localization-based systems. Computer
communications, 31(12), pp.2838-2849.
Khodakarami, F. and Chan, Y.E., (2014). Exploring the role of customer relationship
management (CRM) systems in customer knowledge creation. Information &
Management, 51(1), 27-42.
Lee, J.G., Henriksen, L., Rose, S.W., Moreland-Russell, S. and Ribisl, K.M., (2015). A
systematic review of neighborhood disparities in point-of-sale tobacco
marketing. American journal of public health, 105(9), e8-e18.
Neves, P., Soares, J. and Sargento, S., (2009). Media independent handovers: LAN, MAN,
and WAN scenarios. In GLOBECOM Workshops, 2009 IEEE, 12(4), 1-6.
Pahlavan, K. and Krishnamurthy, P., (2011). Principles of wireless networks: A unified
approach. Prentice Hall PTR.
Paynter, J. and Edwards, R., (2009). The impact of tobacco promotion at the point of
sale: a systematic review. Nicotine and Tobacco Research, 11(1), 25-35.
Porter, M. and Siggelkow, N., (2008). Contextuality within activity systems and the
sustainability of competitive advantage. Academy of Management
Perspectives, 22(2), 34-56.
Rahman, M.A., Pakštas, A. and Wang, F.Z., (2009). Network modelling and simulation
tools. Simulation Modelling Practice and Theory, 17(6), 1011-1031.
Ramdani, B., Kawalek, P. and Lorenzo, O., (2009). Predicting SMEs' adoption of
enterprise systems. Journal of enterprise information management, 22(1/2), 10-
24.

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Seo, D. and La Paz, A.I., (2008) Exploring the dark side of IS in achieving organizational
agility. Communications of the ACM, 51(11), 136-139.
Ståhlberg, M. and Maila, V., (2012). Shopper marketing: How to increase purchase
decisions at the point of sale. Kogan Page Publishers.
Zhang, Y., Zheng, J. and Hu, H. eds., (2008). Security in wireless mesh networks. CRC press.