Point of Sale (POS) System Analysis

This assignment delves into the intricacies of Point of Sale (POS) systems. It begins by defining POS, outlining its components and functions across various industries. The analysis then shifts focus to the crucial aspect of security, examining potential vulnerabilities within POS systems and discussing strategies for enhancing their security. The provided resources include research papers, a case study, and explanations of key concepts like Wide Area Networks (WANs).

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IT for Business
Name of the Student
Name of the University
Author’s note

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Executive Summary
The aim of this report is to get a proper understanding of the POS system and its benefits. This
report focuses on the new POS system implemented by Four Seasons Greenhouse and Nursery, a
small nursery located in Colorado. The use of manual registers for data tracking and maintaining
inventory caused business loss or negligible profit. The small nursery could effectively use
information and achieve competitive advantage by using the new POS system. This report also
provides recommendation for using Wi-fi technology and wide area network for the POS system
of the nursery. This report also gives suggestions such as use of firewalls, implementation of
authorization levels and installation of anti-virus program for protecting the business against
security, confidentiality and privacy risks respectively.

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Table of Contents
Introduction......................................................................................................................................3
1. Advantages and Disadvantages of the new POS System............................................................3
2. Role of the POS System in helping the Business to gain Competitive Advantages....................5
3. Advantages of a Centralised Database........................................................................................6
4. POS System facilitating Decision Making..................................................................................7
5. Recommendation for Telecommunication Options.....................................................................8
6. Business Risks.............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
Bibliography..................................................................................................................................13
Appendices....................................................................................................................................14
Appendix 1.................................................................................................................................14
Appendix 2.................................................................................................................................15
Appendix 3.................................................................................................................................16

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Introduction
The point-of-sale systems have replaced traditional cash registers and manual data
tracking process. POS systems can accurately maintain, distribute and track sales, purchase and
inventory data (Rahman & Ripon, 2014). POS systems help organizations to generate more
revenue and increase profit margin by simplifying and enhancing operational efficiencies of the
business (Refer to Appendix 2). This report analyses a case study of a small business, Four
Seasons Greenhouse and Nursery that has started using a POS system since 2008. This report
discusses various advantages and disadvantages of the POS system. It shows how this POS
system will help the organization to achieve competitive advantages and facilitate the decision
making. This report recommends suitable telecommunication options for the POS system of the
business and discusses the various types of business risks that can occur due to the POS system.
It also gives suggestions for protecting the organization against the business risks.
1. Advantages and Disadvantages of the new POS System
The POS or point-of-sale system has been able to overcome the challenges faced by Four
Seasons Greenhouse and Nursery (Refer to Appendix 1). Several advantages of the new POS
system are:
1. The process of manual tracking gets eliminated by implementing a POS system. POS
systems can automatically produce business reports for effective operations of the organizations.
The POS system can be considered to be an advanced version of a cash register. It enhances the
accuracy of the reports and saves time.

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2. The POS system allows the business to effectively store, track and update sales,
inventory and purchase data in real-time. It also provides robust functionality in distributing
business data to the organizations for facilitating them to manage and operate their business in an
effective manner (Laudon & Laudon, 2016). Therefore, the POS system helps the business to
generate more revenue.
3. The POS system provides accurate information about the inventory counts and
enhances the decision making process. It helps the business to operate and focus on lean
management of inventory units (Refer to Appendix 1). Therefore, the POS system reduces
inventory waste, reduces cost and increases stock turnover.
4. The POS system provides accurate product cost details to the business that helps the
business to get an insight into the profitability of all the products. This enables the business to
improve product pricing and generate more profit. Proper and consistent pricing of products will
increase the level of customer satisfaction and help the business to grow.
5. The POS system helps in effectively controlling employee schedules. It helps in
accurately allocating labour expenses to the specific functions as well as departments. Therefore,
the POS system helps in enhancing employee satisfaction.
The disadvantages of the new POS system are:
1. The initial cost of installation of the POS system is high. The POS system requires
regular maintenance and software update that increases the expense of the business. Hence, it
becomes difficult for a medium or small sized organization to use the POS system.

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2. There are certain confidential, privacy and security risks associated with the POS
system. Absence of regular software updates and security policies can lead to these risks. The
security risks can leak and manipulate sensitive business data. Therefore, any security breach can
adversely affect the business.
2. Role of the POS System in helping the Business to gain Competitive Advantages
The POS system will play a significant role in helping the business to gain competitive
advantages. POS systems will enhance the speed and accuracy of the financial transactions. The
point-of-sale system will help in recording sales data immediately during the time of transaction
or sale. The POS system will eliminate the method of manual tracking and promote automatic
recording, tracking as well as distribution of data. The POS system can flawlessly perform
transactions and calculations (Moon, Kim & Ham, 2014). The absence of human intervention
will eliminate the errors in sales, inventory and purchase reports. POS systems will help the
business to make accurate decisions regarding inventory units and pricing of the products by
providing correct inventory information and product cost reports respectively (Williams et al.,
2014). Hence, consistent product pricing, elimination of inventory waste and reduction of
inventory cost will help the business to increase the level of customer satisfaction and generate
more revenue. Organizations will be able to increase their profit margin by implementing the
POS system. Controlling and tracking of employee schedules along with proper allocation of
labour costs to different departments can be done by the POS system. Therefore, the POS system
will help in retaining employees by increasing their satisfaction level. POS systems will provide
timely and accurate reports to the business and enhance the efficiency of business operations.
The POS system will create a solid business infrastructure that will simplify the reporting and
processing of business operations (Refer to Appendix 1). It will reduce the amount of paperwork

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and increase the speed of the business operations. The overall operational efficiency of the
business will increase by implementing the POS system. Four Seasons Greenhouse and Nursery
will be able to utilize the benefits of the POS system and gain competitive advantage by
increasing the business operational efficiency.
3. Advantages of a Centralised Database
1) A centralised database integrates the information of various departments of a business.
Therefore, it reduces data redundancy by storing data in a single structured database (Gouhar,
2017).
2) A centralised database provides consistent data to its business users by enabling the
business to establish data standards. Implementation of strong security policies reduces the risk
of data theft and data manipulation. Therefore, it helps in enhancing business assessments by
improving the quality of data.
3) A centralised database provides data access to the business users depending on various
authorization levels and user needs. It helps different users belonging to different departments to
access the same data at the same time from various locations. It has strong control over data
concurrency that does not allow more than one user to modify the data at the same time but
allows two or more users to read at the same time (Srinivasan & Manohar, 2012). Therefore, a
centralised database enhances business operations by allowing data sharing in an easy and
effective manner.
4) A centralised database can control all the data of an organization in a central repository
which can redirect valuable resources for fulfilling the business needs. It enables implementation

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of changes in a single instance (Coronel & Morris, 2016). Therefore, a centralised database saves
time and increases business productivity.
5) A centralised database helps in controlling and saving the cost of storing and retrieving
data. It helps in enhancing the accuracy and validity of data. The better management of data
along with easy access method helps in improving the decision making process of the business.
4. POS System facilitating Decision Making
The POS system could help Four Seasons Greenhouse and Nursery with business
decision making by providing accurate cost reports, sales data and inventory data. Initially, Four
Seasons Greenhouse and Nursery depended on manual registers for tracking and maintaining its
inventory. The use of manual registers and manual tracking led to negligible profit or loss. The
point-of-sale system eliminated the need for manual tracking and helped the business to track
sales data in real-time (Refer to Appendix 1). The POS system could update the inventory,
compile sales history and store the data immediately from the time of sale. It could produce
error-free reports for facilitating business operations. The POS system could store, track and
distribute data for providing useful information for operating as well as managing the business.
Therefore, POS systems effectively process the business activities.
Manual inventory management is a labour intensive process. It consumes more time. The
possibility of error occurrence is more when manual processes are involved. Inaccurate tracking
of the sales data and inventory units affects the entire business. The POS system on the other
hand could automate the process of data tracking and operate the business in an effective
manner.

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The point-of-sale system could accurately maintain the inventory data that helped with
the decision making of Four Seasons Greenhouse and Nursery. Initially, the business decided the
number of units to be ordered based on guesswork and speculations. The POS system could
provide accurate details about transactions for inventory items and answer such questions that
provided information about how many items were sold, purchased and discarded.
The POS system provided accurate cost details that helped the business to differentiate
between profitable and less profitable products. This helped the business to produce more
profitable items and increase the profit margin. The POS system could provide details about the
product costs that helped in maintaining consistent pricing (Pearlson, Saunders & Galletta,
2016). Hence, the POS system could help Four Seasons Greenhouse and Nursery to effectively
use the information for managing the business in a better manner.
5. Recommendation for Telecommunication Options
WAN or wide area network can connect several LANs that are located in various
locations and cover a larger span as compared to a LAN or MAN (Refer to Appendix 3). The
most suitable network for the POS system of Four Seasons Greenhouse and Nursery will be
WAN. WAN will help the employees of the company to remotely access network resources from
any location and enhance business productivity. Installation of WAN connection will not require
the purchase and configuration of the components unlike setting up of LAN and save business
cost (Comer, 2015). WAN will also help in expanding the business by linking different sites.
Wired networks make the use of physical medium such as fiber optic, copper wire and
twisted pair cables for connecting various devices. Wireless networks transmit information over
long distance without any physical medium and use electromagnetic waves.

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The most suitable medium or technology for Four Seasons Greenhouse and Nursery will
be wireless technologies. The wireless technology will allow the users to move freely by
connecting to the Internet and instantly share files without using cables (Iniewski, 2017). The
business will not incur heavy installation and cabling cost by using wireless technologies.
Wi-Fi technology will be suitable for the POS system of Four Seasons Greenhouse and
Nursery as it will help the business to instantly share resources among various devices. It will
eliminate the complex process of wiring and help the employees to easily access information
(Adib & Katabi, 2013). Wi-Fi technology will enhance the operational efficiency of the business
by improving its responsiveness (Xiao-yang, 2012).
6. Business Risks
The POS system can bring three main types of risks to the business such as security,
confidentiality and privacy risks. Security risk can occur when there is lack of effective network
security policies and encryption (Kizza, 2017). If the POS system is not up-to-date then it can
cause security risk. The business can be protected against the security risks by updating the
software on a regular basis. The security risks can be prevented by using encryption methods and
security policy (Stallings et al., 2012). Firewall can be implemented for preventing and detecting
intrusion.
Privacy risk can occur due to the presence of malicious codes and virus. Malware attacks
can steal sensitive data and adversely affect the business (Saeed, Selamat & Abuagoub, 2013).
Virus attacks can corrupt the POS system and destroy business data by replicating itself. Privacy
risks can be prevented by installing anti-virus software and updating the software on a regular
basis.

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Confidentiality risk occurs when there are no authorization levels and all the users have
access to all information present in the POS system. Authorization levels must be enforced and
data must be encrypted for restricting the access to sensitive business information (Singh, 2013).
A specific category of users must be able to access information related to their specific domain.
Conclusion
From the above discussion, it can be said that Four Seasons Greenhouse and Nursery will
be able to achieve operational efficiencies and competitive advantages by using the new POS
system. According to this report, centralised database can integrate the information of various
departments and help in enhancing business productivity. This report also pointed out that the
accurate data of inventory has helped in the decision making process of the business. It also
showed that detailed cost reports have helped the business to identify profitable items and raise
profit margin. The most suitable telecommunication options for the business will be WAN and
wireless technologies. This report said that regular software updates, use of firewalls and anti-
virus software will be able to prevent the business from various risks that can occur due to the
POS system.

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References
Adib, F., & Katabi, D. (2013). See through walls with WiFi!(Vol. 43, No. 4, pp. 75-86). ACM.
Comer, D. (2015). Computer networks and internets. Pearson.
Coronel, C., & Morris, S. (2016). Database systems: design, implementation, & management.
Cengage Learning.
Gouhar, A. (2017). Database Management System. International Journal of Engineering
Science, 11766.
Iniewski, K. (Ed.). (2017). Wireless technologies: circuits, systems, and devices. CRC press.
Kizza, J. M. (2017). Guide to computer network security. Springer.
Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education
India.
Moon, Y. J., Kim, W., & Ham, S. (2014). Users' intentions to employ a Point-Of-Sale
system. The Service Industries Journal, 34(11), 901-921.
Pearlson, K. E., Saunders, C. S., & Galletta, D. F. (2016). Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Rahman, M., & Ripon, S. (2014). Elicitation and modeling non-functional requirements-A pos
case study. arXiv preprint arXiv:1403.1936.
Saeed, I. A., Selamat, A., & Abuagoub, A. M. (2013). A survey on malware and malware
detection systems. International Journal of Computer Applications, 67(16).

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Singh, G. (2013). A study of encryption algorithms (RSA, DES, 3DES and AES) for information
security. International Journal of Computer Applications, 67(19).
Srinivasan, M., & Manohar, R. (2012). Performance of Concurrency Control Mechanisms in
Centralised Database Systems. Indian Journal of Computer Science and
Engineering, 3(3).
Stallings, W., Brown, L., Bauer, M. D., & Bhattacharjee, A. K. (2012). Computer security:
principles and practice (pp. 978-0). Pearson Education.
Williams, B. D., Waller, M. A., Ahire, S., & Ferrier, G. D. (2014). Predicting retailer orders with
POS and order data: The inventory balance effect. European Journal of Operational
Research, 232(3), 593-600.
Xiao-yang, L. I. (2012). WIFI technology and its application and development [J]. Information
technology, 2, 062.

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Bibliography
Kaiser, K. (2012). Protecting confidentiality. The Sage handbook of interview research, 457-464.
Stair, R., & Reynolds, G. (2013). Principles of information systems. Cengage Learning.
Yang, D., & Hwang, I. (2015, May). Security enhancement methods for mobile POS system.
In Proceedings of the Second ACM International Conference on Mobile Software
Engineering and Systems (pp. 152-153). IEEE Press.

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Appendices
Appendix 1
Case Study

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Appendix 2
What is a POS System?
POS stands for point of sale, which refers to the time and place - the point - that a sales
transaction is completed. POS may also stand for point of service, or the time when customers

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interact with merchants, or point of purchase, or a place where sales are made, whether at a
mall, market, city, or restaurant.
A point of sale system, however, is a term that encompasses the hardware, software, and
support that manages that transaction, including credit card processing, receipt printing, and
more. POS terminals are used in most industries, such as lodging, retails, and restaurants.
With a POS system:
 You can analyze sales data, figure out how well all the items on your shelves sell, and
adjust purchasing levels accordingly.
 You can maintain a sales history to help adjust your buying decisions for seasonal
purchasing trends.
 You can improve pricing accuracy by integrating bar-code scanners and credit card
authorization ability with the POS system.
Appendix 3
Wide Area Network
The WAN is a network which is a collection of LANs and other network types connected
using router. It covers large geographical distance compare to LAN and MAN types. A WAN is
essentially a larger version of a LAN, designed to allow communication over a wide
geographical area. Although there is no strict definition of what constitutes a WAN as opposed to
a LAN, WANs can generally be recognized by their use of public infrastructure such as phone or
cable lines. WAN technology can be used to access network resources remotely, including other

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WANs or LANs. For example, a company could allow its employees to access its local network
from home using their Internet connection.