Point-of-sale System

This report discusses the advantages and disadvantages of point-of-sale system, how it helps businesses gain competitive advantage, and the risks involved. It also covers the advantages of having a centralised database, the telecommunication networks used by POS system, and the risks of POS system and the risk mitigating activities to protect business against the risks.

Running Head: POINT-OF-SALE SYSTEM
Point-of-sale System
Name of the student:
Name of the university:
Author note:

1POINT-OF-SALE SYSTEM
Executive Summary:
Four Season Greenhouse and Nursery is a small enterprise that is facing problem in maintaining
correct inventory data that is required for effective decision-making. Point-of-sale system is one
technology that can be used to solve the problem. In this system process, information regarding
transaction is stored in database immediately when action is done. It will facilitate in tracking
operational data that will help in taking correct decisions regarding business.

2POINT-OF-SALE SYSTEM
Table of Contents
List of abbreviations........................................................................................................................3
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
1. Advantages and Disadvantages of the new POS system.........................................................4
2. The way POS system will help the business gain competitive advantage..............................5
3. Advantages of having centralised database.............................................................................6
4. The way POS system will facilitate decision-making.............................................................7
5. Telecommunication networks that will be used by POS system.............................................8
6. Risks of POS system and the risk mitigating activities to protect business against the risks..9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

3POINT-OF-SALE SYSTEM
List of abbreviations:
1. POS – Point-of-sale
2. SME – Small and Medium-sized enterprise
3. IT – Information Technology
4. LAN – Local Area Network.
5. WAN – Wide Area Network
6. MAN – Metropolitan Area Network

4POINT-OF-SALE SYSTEM
Introduction:
This report will enlighten on the new technology known as point-of-sale system.
Information technology strategies are adopted by every organisation whether large or small
(Seethamraju 2015). The advantages are visible once the technology is adopted. However, small
enterprises do not have enough resource and infrastructure to support information technology
strategies (Brimblecombe Liddle and O'Dea 2013). Technology benefits to SMEs are
significantly crucial for carrying out operations in organisation and developing strategies to
improve them. Four Seasons Greenhouse and Nursery that is located in Colorado is an example
of small enterprise that maintained its inventory information using a manual register. They
entered information of the products realizing maximum profits manually in the register. As a
result, important operational data was ignored by the enterprise that led to no profit and
sometimes loss to the enterprise. The business operations carried out by Four Seasons
Greenhouse and Nursery lacked in reviewing and tracking individual products margin. To
improve business operations, the enterprise adopted point-of-sale system in 2008. Point-of-sale
system is defined as the process of storing information of the point at which customers pay
money for to merchants to buy a product (Harris and Patten 2014). The following paragraph will
focus on the advantages and disadvantages of POS followed by the way it will help business gain
competitive advantage and the risks that are invited by the system.
Discussion:
1. Advantages and Disadvantages of the new POS system:
Advantages:

5POINT-OF-SALE SYSTEM
The devices that are used by point-of-sale system are barcode scanners, weighing scales
and cash registers. The customers use touch screens, payment terminals as well as other
hardware and software tools to make payment. The enterprise that owns POS system can track
business data and transaction information immediately at point of sale with the use of these
devices. The system eliminates the risks that are involved in tracking and storing information
manually. Additionally, the system can update inventory information along with keeping a track
of sales transaction (Nikolova and Inman 2018). Sales history of the enterprise is maintained at
the same time. Device like barcode reader stores the information of transacted product in
centralised database immediately the barcode of the product is read by it. POS system helps to
maintain correct inventory data for sold products that aids in decision-making while helping
business to shift to high profit production (Mayer, Borges and Simske 2018). The system is
much more robust and has more functionality than cash registers. Four Seasons Greenhouse and
Nursery will be benefitted by useful operational data that will help to manage business
efficiently.
Disadvantages:
The two types of systems that are supported by point-of-sale system are web-based
system and software-based system. However, web-based systems are more user-friendly because
of which most business enterprise adopts this system (Ismail and King 2014). The additional cost
for internet access might not be afforded by small enterprises. If the organisation use software-
based system then continuous update of software to new version is required from software
company manufacturer. Updating software invites new complications in the system that
increases cost of updating hardware.
2. The way POS system will help the business gain competitive advantage:

6POINT-OF-SALE SYSTEM
POS system will help in eliminating reliance on manual way of storing transaction
information that will reduce the risks of ignoring inventory items sold. Maintaining correct
inventory information facilitates decision-making. Decisions related to number of units to be
ordered for an item does not depend on current inventory units. The guesswork that was made
for ordering items have now been eliminated that helped business operation on leaner inventory
units. The system will provide the business with transaction details such as number of items
purchased, sold and discarded of inventory items. Good decision-making ability will help the
business gain competitive advantage. POS implementation in business exposed that business
owners did not knew much about the business. When business owners reviewed reports of this
new system, they found that a number of products were not profitable as they thought. The
products that will contribute maximum profit to organisation can be understood from detailed
cost report. This report provided an opportunity for business to shift to production of more
profitable products that will indirectly lead to more profit. Increase in profit will help enterprise
to compete with other enterprises. Detailed knowledge of product costs will help organisation to
price products in a way to make profit. Keeping track of information related to products and their
costs will help managers manage operations of the business effectively. Time will be saved that
can be used to manage other things rather than wasting it on mundane functions.
3. Advantages of having centralised database:
When amount of data increases with expansion of business, it becomes hectic to manage
them. Organising data is important to handle them so that they can impose sanity to businesses.
The advantages of using centralised database are as follows:
 Data security is improved: Data that are stored in central databases face less challenges
of security as strong data security is provided by central database (Wimmer et al. 2013).

7POINT-OF-SALE SYSTEM
Important customer information that needs strong protection should be stored in central
databases so that it is kept secured.
 Data preservation is improved: The main advantage that is provided by centralised
database is improved data preservation (Hustad and Olsen 2013). If hardware failure
occurs, centralised database preserves data and prevents from unauthorised access. As a
result, loss of data is eliminated and the system is referred as a fault-tolerant system.
 Physical security is improved: Data stored in laptops and notebooks is vulnerable to loss
because the devices might be stolen or lost. The lost and stolen device can be accessed
by anyone and data stored in locally might be at security risks (Scanlon 2016). When
data is stored in a centralised database, it cannot be physically accessed to a single
location. Hackers who intentionally steals important data to cause loss to business will
not be able to access these data as they are under strong security checks.
 Reduction in costs along with improvement in reliability and speed update: Huge cost is
incurred for implementing server technology however overall cost is reduced in
maintaining a central server. Cost spent to maintain multiple computers that stored data
in multiple location would be more. Therefore, centralised database has added advantage
of reduction in cost. Components of higher quality and redundancy are used in central
databases that makes it more reliable than local storages (Scanlon and Kechadi 2013).
Updates applied on database passes through central storage to all computers connected to
it. As a result, speed of update is high. Local storages do not have the facilities that
makes centralised database advantageous than local storage.
4. The way POS system will facilitate decision-making:

8POINT-OF-SALE SYSTEM
Point-of-sale system facilitates in taking correct decisions. The products that will increase
profit of business are identified well and accordingly decisions are made for production of the
particular products. In point-of-sale system processes, the items that are sold are immediately
stored in database through various devices. Products that are sold in huge amounts and causes
maximum profit to business can be easily determined. It eliminates manual storage of data.
Information that are tracked manually might sometimes be wrong. Humans cannot be perfect all
time. As a result, there might be some mistake in entering data in manual registers. It affects
decision-making. In the case study of Four Seasons Greenhouse and nursery, inventory data was
entered manually in manual registers that resulted in negligible profit and sometimes loss to the
business (Bocken et al. 2014). It was lacking useful operational data that could lead to effective
decision-making. Questions that were answered by use of POS are: products that brings
maximum profit to business, amount of raw materials that should be ordered to reduce cost of
production, number of products that were discarded, purchased and sold. Information gained
from POS system will help business to keep a track of inventory data and product that will
directly lead to business profit. Data collected in database will facilitate business in deciding
which products needs to be produced in large quantities, decide amount of raw materials that
should be ordered to make the product and so on (Bhalla et al. 2013). Expansion of business and
quality of service also depends on correct data and information that are stored in centralised
database.
5. Telecommunication networks that will be used by POS system:
Four Seasons Greenhouse and Nursery is referred to as a small enterprise. Small
enterprises so not have enough funds and infrastructure to implement costly technologies.
Therefore, LAN would be useful for implementing POS. WAN or MAN can be used in large

9POINT-OF-SALE SYSTEM
enterprises however SMEs will not be able to afford for WAN or MAN. Moreover, number of
computers that will be connected to the network will be less. As a result, LAN will be ideal
network for this POS system. Internet providers will provide access to network such that POS
system processes can be carried out. Wired as well as wireless technologies can be used to build
network. Wireless technology would eliminate the risks of wired media however, cost of
implementation would be large. In case wired technology is used for network, fibre optics would
be the best option. It would eliminate the risks associated with coaxial and twisted pair cables.
However, the cost of installation of fibre optics is more.
6. Risks of POS system and the risk mitigating activities to protect business against
the risks:
Besides the advantages of POS system, the system remains to be vulnerable to security
risks. Employee theft is the most common risk faced in a POS system. Cashier who is in charge
of scanning goods sold and purchased might bypass scanning of some items thereby profiting
himself however, the business will be at loss (Foxall 2014). By hacking security systems of
centralised server, a hacker can gain access to confidential data. Therefore, data security, privacy
and confidentiality is lost. To mitigate these risks, it is crucial for POS system to create an admin
window for the owner or administrator to inspect daily sales, regularly check sales and purchase
receipts (Laudon and Laudon 2016). Besides all this precautions POS system will not be able to
become 100% risk free. This is because of dishonest employee and staffs that will be present in
the enterprise.
Conclusion:

10POINT-OF-SALE SYSTEM
It can be concluded from above discussions that POS system facilitates in decision-
making. It might be difficult for small and medium-sized enterprise to implement POS however
considering its effects on business it is implemented by SMEs. It helps in keeping track of
inventory data and products that should be produced in huge amounts to maximize profit. POS
system stores data in centralised database that has added advantage of improved data
preservation and security. Physical security is also provided that helps to recover stored
information in case of system failure. Manually stored data are prone to theft however, data
stored in centralised database are immune to risks of theft and data loss. LAN helped the
enterprise to connect to internet and implement POS system in the enterprise. Besides these
advantages, POS systems are still vulnerable to security threats. Internal staffs of the enterprise
are hacking the system to steal important information. To mitigate these risks, the enterprise
should limit access of users to its centralised database. Only trusted and registered staffs should
have access to it. Apart from the security risks, POS system in any organisation should ideal for
maintaining a track of products that are sold, purchased or discarded.

11POINT-OF-SALE SYSTEM
References:
Bhalla, V., Singla, T., Gahlot, A. and Gupta, V., 2013. Bluetooth based attendance management
system. International Journal of Innovations in Engineering and Technology (IJIET) Vol, 3(1),
pp.227-233.
Bocken, N.M.P., Farracho, M., Bosworth, R. and Kemp, R., 2014. The front-end of eco-
innovation for eco-innovative small and medium sized companies. Journal of Engineering and
Technology Management, 31, pp.43-57.
Brimblecombe, J., Liddle, R. and O'Dea, K., 2013. Use of point-of-sale data to assess food and
nutrient quality in remote stores. Public health nutrition, 16(7), pp.1159-1167.
Foxall, G., 2014. Consumer Behaviour (RLE Consumer Behaviour): A Practical Guide.
Routledge.
Harris, M. and P. Patten, K., 2014. Mobile device security considerations for small-and medium-
sized enterprise business mobility. Information Management & Computer Security, 22(1), pp.97-
114.
Hustad, E. and Olsen, D.H., 2013. Critical issues across the ERP life cycle in small-and-medium-
sized enterprises: Experiences from a multiple case study. Procedia Technology, 9, pp.179-188.
Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information
systems in small and medium sized Malaysian manufacturing firms. Journal of Information
Systems and Small Business, 1(1-2), pp.1-20.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.

12POINT-OF-SALE SYSTEM
Mayer, J., Borges, P.V. and Simske, S.J., 2018. Introduction. In Fundamentals and Applications
of Hardcopy Communication (pp. 1-5). Springer, Cham.
Nikolova, H.D. and Inman, J.J., 2018. Healthy choice: the effect of simplified point-of-sale
nutritional information on consumer food choice behavior. Journal of Marketing Research.
Scanlon, M. and Kechadi, M.T., 2013, September. Universal peer-to-peer network investigation
framework. In 2013 International Conference on Availability, Reliability and Security (pp. 694-
700). IEEE.
Scanlon, M., 2016, August. Battling the digital forensic backlog through data deduplication. In
Innovative Computing Technology (INTECH), 2016 Sixth International Conference on (pp. 10-
14). IEEE.
Schneider, C., Barker, A. and Dobson, S., 2015. A survey of self‐healing systems frameworks.
Software: Practice and Experience, 45(10), pp.1375-1398.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers,
17(3), pp.475-492.
Vohs, K.D., Baumeister, R.F., Schmeichel, B.J., Twenge, J.M., Nelson, N.M. and Tice, D.M.,
2018. Making choices impairs subsequent self-control: A limited-resource account of decision
making, self-regulation, and active initiative. In Self-Regulation and Self-Control (pp. 45-77).
Routledge.

13POINT-OF-SALE SYSTEM
Wimmer, J., Towsey, M., Planitz, B., Williamson, I. and Roe, P., 2013. Analysing environmental
acoustic data through collaboration and automation. Future Generation Computer Systems,
29(2), pp.560-568.