Point of Sale System: Advantages, Disadvantages, Risks and Telecommunication Options

This report discusses the advantages, disadvantages, risks and telecommunication options of Point of Sale (POS) system. It also explains how POS system helps in gaining competitive advantage and facilitates decision making. The case study of Four Season Greenhouse and Nursery is used to explain the implementation of POS system for managing inventory and measuring profit and loss. The advantages of having a centralized database and how POS system facilitates decision making are also discussed. The risks of security, privacy and confidentiality of data in POS system are explained along with the prevention methods to control these risks.

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Point of Sale System
May 9, 2018

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Abstract
This business report is based on the case study of a Four Season Greenhouse and Nursery which
is located in Colorado. In this nursery, the process of inventory management is done at the
manual basis. Manual registers are used for tracking and maintaining the inventory of whole
nursery. Moreover, the measurement of the profit for each product is also done manually. This is
really a time consuming job and does not provide accurate information about the manufacturing
of products, business revenue and the profit and loss that is generated from the sales of goods at
the business level. To overcome this problem, Four Season Greenhouse and Nursery started to
use a new system i.e. Point of Sale (POS). This system is so much helpful for this organization
and it has replaced the manual system for managing the inventory with automatic system. The
purpose of making this report is to emphasize on the advantages, disadvantages, effectiveness
and risks factors of this POS system in detail.

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Introduction
Point of Sale system is considered as a central component or a hub of a business. It is actually a
place where payment is paid by the customers for purchasing goods and services. POS is a sale
system which is combination of the software and hardware and it allows business owners to
make transactions and other activities properly. Four Season nursery has implemented this
system to manage its inventory appropriately and for accurate measure of the profit and loss of
business. Now in further sections of this report, I will focus on some essential factors of point of
sale system (Harbortouchpossoftware.com, 2018).
Advantages and Disadvantages of the new POS System
According to the case study of Four Season Greenhouse and Nursery, some key advantages are
found of point-of-sale system and those advantages are listed as below:
 The first key advantage of new POS system is that it allowed business owners to trail the
useful business data from the sale transactions immediately at the time of sale. This data
can be used further to perform different activities related to business inventory. This
feature of POS has also resolved the problem of manual process of tracking sales.
 Another advantage of POS system is for Four Season Nursery is that while updating
inventory the process of data processing and storing is done by the POS system. Due to
this, now company managers no need to count on the manual entry of the sales
transactions and decrement of the inventory units for the sold items (Compass.fhcrc.org,
2018).

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 Next advantage of POS is that it works more than like a cash register and provides most
strong functionality in inputting, tracking and distributing data to obtain the useful
information that will be helpful to operate and manage business properly.
Besides advantages of POS system, there are some disadvantage of it that have not yet
encountered by the business of Four Season Greenhouse and Nursery. One of the key
disadvantages of POS system is that it requires periodic updates. After installing the POS system,
it is essential for the managers of Four Season nursery to schedule updates for this system and
these updates must download and install by the POS vendor. Furthermore, an ongoing
maintenance fee is also required to cover regular updates of the POS system. Another
disadvantage of the Point-of-Sale system is its security risks. In case of irregular updates of the
system, the chances of data breaches will be increased considerably. Therefore, due to vulnerable
security breaches, sensitive inventory information can be violated by the cyber-criminals. So, it
is mandatory for Four Season nursery to be aware about these security issues while executing
POS system (Chia, 2018).
How POS will help company to gain the competitive advantage?
For a business organization, it is essential to be competitive and agile and to achieve this goal,
POS system helps business enterprises. In case of Four Season garden center, Point-of-Sale
system helps this organization for enhancing its competitive advantage among its competitors.
The implementation of POS system cleared many misunderstandings of owners of garden center
about their business. After reviewing the reports of POS system, they got to know that some
items are not less profitable for business than they thought. Moreover, they also got to know that
which products are more profitable for their business. Besides this, with the help of POS system,
garden center obtains detailed information about the market value of their products and now

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proper decision can be made regarding the actual cost of each product by the center.
Additionally, the ability of the POS system to process sales, inventory and purchasing
transactions immediately has reduced the need for manual data entry. Due to the reasons, the
competitive advantage of Four Season garden center has increased.
Advantages of having Centralized Database
Having a centralized database is good for business organizations because it helps them to keep a
single database for different processes rather than having a separate database for each process.
These processes can be membership, sales, events and others. There are several advantages to
use centralized database and Four Season garden center should also implement this approach for
its business operations. The main advantages of centralized database are data integrity,
development of the broad business reports that can show information regarding the different
business processes, easy to learn and provide support by focusing on one single product
(National Processing, 2018).
How POS system facilitate decision making?
There is no doubt to say that POS system facilitates decision making. Four Season garden center
is using POS system and obtaining accurate information that is very much helpful for better
business decision making. There are some key reasons behind this effectiveness of POS system.
Why do POS system process business activities more effectively?
Point-of-Sale system works on actual facts and figures that are related to business operations. It
does not consider estimated information. That is why, appropriate result is provided by this
system which is very much important to run business activities effectively (Gastrofix, 2018).

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Can the business information be tracked manually in an effective manner?
No, it is not possible to track business information manually in an effective way. Manual
processing of information is a cumbersome and time consuming task and it leaves several flaws
into the processed information that cannot be used further for long time. Various wrong
estimations are also found in manual execution of business information (Expert Market US,
2018).
What types of answers can be answered effectively?
With the help of Point-of-Sale system, questions regarding the real cost of the product, actual
profit and loss of business in case of every single product, information regarding sales
processing, business operations, inventory management and purchasing transactions can be
answered easily, quickly and effectively by the Point-of-Sale system.
How information can be used to better manage the business?
Information plays a vital role in the appropriate management of the business. With the
availability of accurate information better decisions can be made at the business level. Moreover,
detailed business information helps to understand all major activities of the business and their
outcomes. An appropriate report can be generated regarding the profit and loss of business.
Personnel management, inventory management and other activities can be easily performed with
the help of right information (Software Advice, 2018).
Telecommunication Options for POS System
POS system can be integrated with the telecommunication systems for better communication and
information sharing in a business organization. This is also required in Four Season garden
center. Following options must be used with POS system to get better results (Toast, 2018).

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Types of Network
POS system can be combined with different network types such as LAN, WAN and MAN. It is
based on the required of the company. If POS system is required for small geographical area like
only within a single organization then LAN will be a best option. Otherwise, to cover middle or
wide locations with network connection, MAN and WAN network types can be used.
Types of Media
Both wired and wireless media technologies are available for POS system connectivity in a
business company. But it would be preferred to use wireless media connection which is more
reliable and easy to establish than wired connection where a bunch of wires are required for
connecting different departments and systems in a company. But if a business owner wants to
use wired connection for telecommunication purpose with POS system then optical fiber cable is
considered best for establishing wired connections. On flip side, in case of wireless connection,
there is no need to use wires because it works with wireless signals such as Wi-Fi. Bluetooth and
Wi-Fi both can be used in case of wireless connectivity with POS system to achieve purpose of
effective communication modes (It Still Works, 2018).
What type of risks POS system bring and how these risks can be overcome?
The risk of security is one of disadvantages of Point-of-Sale system. Due to centralized approach
of POS system, the risk of security breaches is higher. Besides this, the risks of privacy and
confidentiality are also found in POS system (corruption, risks and information, 2018).
Security
POS system is a centralized system and many other computers are connected with it and using
single database. In this case, hackers can try to hack a connected system and can access
information from the main POS system without permission and knowledge of authorized users. It

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is done by hacking and in this process login credentials such as username and password are
stolen to access POS system (Effective Database Management, 2018).
Privacy
POS system of a business corporation contains enormous amount of private information in it. If
this system will be hacked then that important business information will be leaked and whole
privacy will be violated. This is mostly happened when crucial information like login credentials
are not kept private properly by the authorized person or weak credentials are used for POS
system (WhatIs.com, 2018).
Confidentiality
The issues of confidentiality violation is also a big risk factor of POS system. It is related to
breaches of data which is stored into the database of POS system. This information must not be
accessible to an unauthorized person. But if an unknown user is successful to do this then it is
known as damage of confidentiality of business data. Network intruders are mainly responsible
for confidentiality violation of data (JUX Law Firm, 2018).
Prevention Methods for controlling security risk factors
To protect the POS system from the risks of security, privacy and confidentiality of data, some
key prevention methods can be used such as cryptography, advanced anti-virus, network
monitoring software to which POS system is connected and firewall.
Conclusion
To sum up, it can be said that Point-of-Sale system is really an effective and good solution for
managing business operations and for maintaining business inventory. The case study of garden
center clearly defines the usefulness of POS system. But it is also mandatory for this center to be

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aware about the security concerns of this system and must implement potential solutions to
control security risk factors.
References
Harbortouchpossoftware.com. (2018). What is POS? Definition of Point of Sale (POS) Systems
with Examples. [online] Available at: https://www.harbortouchpossoftware.com/what-is-pos/
[Accessed 9 May 2018].
Bizfluent.com. (2018). The Advantages & Disadvantages of Point of Sale System. [online]
Available at: https://bizfluent.com/info-11369852-advantages-disadvantages-point-sale-
system.html [Accessed 9 May 2018].
National Processing. (2018). The Key Disadvantages Of POS Systems - National Processing.
[online] Available at: https://nationalprocessing.com/blog/key-disadvantages-pos-systems/
[Accessed 9 May 2018].
Software Advice. (2018). What Is a Point of Sale System? A Guide to POS Features. [online]
Available at: https://www.softwareadvice.com/resources/what-is-a-point-of-sale-system/
[Accessed 9 May 2018].
Corruption, P., risks, K. and information, C. (2018). Knowing your risks - Independent
Commission against Corruption Website. [online] Icac.nsw.gov.au. Available at:
https://www.icac.nsw.gov.au/preventing-corruption/knowing-your-risks/confidential-
information/4913 [Accessed 9 May 2018].
Toast, I. (2018). What is a POS System? | Point of Sale [Definition]. [online] Toast, Inc.
Available at: https://pos.toasttab.com/what-is-pos [Accessed 9 May 2018].

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Effective Database Management. (2018). Why Should You Have a Centralized System?. [online]
Available at: https://effectivedatabase.com/why-should-you-have-a-centralized-system/
[Accessed 9 May 2018].
It Still Works. (2018). The Advantages of Centralized Database Storage. [online] Available at:
https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html [Accessed 9
May 2018].
WhatIs.com. (2018). What is confidentiality, integrity, and availability (CIA triad)? - Definition
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integrity-and-availability-CIA [Accessed 9 May 2018].
Chia, T. (2018). Confidentiality, Integrity, Availability: The three components of the CIA Triad
« Stack Exchange Security Blog. [online] Security.blogoverflow.com. Available at:
https://security.blogoverflow.com/2012/08/confidentiality-integrity-availability-the-three-
components-of-the-cia-triad/ [Accessed 9 May 2018].
JUX Law Firm. (2018). The Top 4 Risks to Your Company's Confidential Information. [online]
Available at: https://jux.law/top-4-risks-to-your-companys-confidential-information/ [Accessed 9
May 2018].
Gastrofix. (2018). Network: This is how your POS System from GASTROFIX works. [online]
Available at: https://www.gastrofix.com/en/pos-network/ [Accessed 9 May 2018].
Expert Market US. (2018). How To Install A Point Of Sale Machine. [online] Available at:
https://www.expertmarket.com/pos/how-to-install-a-pos-system [Accessed 9 May 2018].

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Compass.fhcrc.org. (2018). Advantages to Centralized Data Management. [online] Available at:
https://www.compass.fhcrc.org/compass/bin/tech/centraldata.aspx [Accessed 9 May 2018].