Point of Sale System

This document discusses the POS, its advantages and disadvantages in a business such as efficient and reliable data storage, how it gives a business a competitive edge through improving customer service, its importance in facilitating decision making, the possible telecommunication recommendations such as LAN and WAN that can be used with the POS, and the POS associated risks and security breaches.

Running Head: POS SYSTEM 1
Point of Sale System
By
University Affiliation
Date

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Executive Summary
Information Technology has been of important use to businesses especially in the
automation of processes. Many technologies are in use in many businesses today than a decade
ago with each of them serving a particular purposes in the business. One of such technologies is
the Point Of Sale system (POS). This document discusses the POS, its advantages and
disadvantages in a business such as efficient and reliable data storage, how it gives a business a
competitive edge through improving customer service, its importance in facilitating decision
making, the possible telecommunication recommendations such as LAN and WAN that can be
used with the POS, and the POS associated risks and security breaches.

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Table of contents
Cover page…………………………………………………………………….1
Executive Summary…………………………………………………………..2
Introduction……………………………………………………………………4
Advantages and Disadvantages of POS System……………………………….4
How POS System Promotes Competitive Advantage ………………………....5
Advantages of Centralized Database…………………………………………...6
How POS System Facilitates Decision Making………………………………...7
Telecommunication Recommendation………………………………………….7
POS System Associated Risks…………………………………………………..8
Conclusion………………………………………………………………………9
Recommendation………………………………………………………………..9
Appendix………………………………………………………………………...10
References……………………………………………………………………….11

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Introduction
A point of sale system (POS) is a combination of software and hardware developed to
centralize the operations of a business. It manages business transactions such as customer billing,
credit card processing, and other after-transaction processes that lead to decision making and
customer satisfaction. POS system can either be a stand-alone system which is an offline POS
system installed in a server within a stall. It mainly consists of an interconnection of computers
which are installed with the POS system and they share a common database (Edwards, Skoog,
Babu, & Dorogusker, 2016). Secondly, there is web-based POS system which is a POS that is
embedded in an E-commerce website. In most cases online/ web-based POS store their data in a
cloud server. Unlike off-shelf software POS systems are tailor-made, therefore, they are
customized to meet the business needs of the client, although majority of them share some basic
functionality such as data storage mode and billing processes (Edwards et al., 2016)
Advantages and Disadvantages of POS System
The new POS system is advantageous to Four Season Green House and Nursery in
various ways such as; it provides an easy way of processing, storing, and retrieving/ tracking
sales data both at the time of sale and even later thus minimizing time wastage, it generates sales
reports that enables the business to manage its current and future revenue and profit margins, it
facilitates decision making by providing managers with reliable and accurate sales data that
provides them with insights, it provides an easy way of timely distribution/ sharing of data

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among the various players in the business thus promoting collaboration and teamwork (Falzone
& Ciabarra, 2012).
Despite the above advantages, according to Madden & Tan (2015) it has some
disadvantages which include; it runs on a computer server, therefore, if the computer fails the
entire system fails. Secondly, the system is prone to various security breaches which may distort
the data, expose the data to undesired parties, or make the data to be unavailable thus negatively
impacting decision making. Thirdly, the initial cost of purchasing the system and the required
hardware, the maintenance cost, and the training cost may be expensive to the business. The
fourth demerit is that the efficiency of the system and the quality of data is dependent upon the
input given to the system.
How POS System Promotes Competitive Advantage
The POS system will help the business gain a competitive edge in ways such as; it will
reduce the cost of operation through minimizing the number of staff required to attend to
customers, bookkeepers, filing cabinets, and the number of cash registers needed each year. This
will enable the business to sell its products at a cheaper price than the competitors and still
maintain its profit margins (Kirchmer, 2012). Secondly, the POS will help the business in
customer retention by forward integration/ increasing the switching cost of customers through
means such as loyalty cards, which can only be processed efficiently using the POS.
Thirdly, the POS system will enable the business to satisfy its customers through
reducing the waiting time in the queues and offering products that meet the customer’s
preference thus attracting more customers and outsmarting competitors (McAfee, Brynjolfsson,
Davenport, Patil, & Barton, 2012). The fourth way is that the POS system through data mining

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and data visualization will enable the managers to observe the buying patterns of various
products and thus predict future sales in a more intelligent way than the competitors. Fifth the
POS system provides multiple ways through which customers can pay for products thus it will
attract both cash and cashless customers.
Advantages of a Centralized Database
The advantages of centralized database include;
Reduced cost: reliable databases such as Oracle are expensive to acquire and maintain.
Therefore, a centralized database will only require the purchase of one database, few database
administrators and less maintenance cost (Rush, Salz, Sandberg, & Tate, 2014).
Easy to secure: database security is the most essential security measure since it protects
the confidentiality, availability, and integrity of the stored data. It is easy to employ advanced
security mechanisms such as firewalls in a single centralized database than in multiple databases
(Coronel, & Morris, 2016).
Ease of data retrieval: A centralized database has all the data from all the working
stations, therefore, it is easy to access any data from any working station unlike where each
working station has its own database. This saves on the amount of time needed to mine the data,
process information, and develop knowledge and insights (Coronel, & Morris, 2016).
Ease of data updating and reconciliation: A centralized database makes it easy for the
business to update the data at a central point. Secondly, each of the workstation can easily update
the data from their end and the updated data will be accessible to all the other workstations. This
increases accuracy and reliability of data due to real-time updates (Rush et al., 2014)

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How POS System Facilitates Decision Making
The POS system can facilitate decision making through ways such as: Due to its reliable
database and processing speed it facilitates the storing of sales data, processing of the data to
generate information, and timely availing of the information in the form of sales reports that
gives decision makers intelligent ideas/ insights (Turban, Sharda, & Delen, 2010). Secondly,
POS system supports data visualization features such as graphs, pie charts, and polygons. They
help the decision makers to interpret that data in more easy way without requiring the help of
data analyst thus promoting decision making in the organization.
Thirdly, a POS system provides real-time data and information about the progress of the
organization in terms of sales, customer buying patterns, product performance, among others
which answers the fundamental questions that require to be answered for a quick decision to be
made. This can help the decision makers in the business to detect any possible anomaly now and
in the future and take the necessary proactive actions or detect an opportunity and prepare in
advance the resources needed to seize the opportunity (Vercellis, 2011). The POS system
generates sales receipts which facilitates manual tracking of the information, thus, the receipts
can be referenced from in case the information provided by the POS has integrity doubts.
Telecommunication Recommendation
Four Season Green House and Nursery is a small business whose all the departments that
need to be connected are in the same locality. Therefore, a local area network will be the most
suitable network for the business. Within the local area networks, Virtual area networks
(VLANs) for the sensitive departments should be created and secured using internet protocol

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version 6 addressing to ensure that only the devices within the virtual area network will have
access to data and other resources designated for that VLAN (Kim & Feamster, 2013).
Wired technology will be suitable for Four Season Green House and Nursery since it is
less costly in terms of initial cost of installation and maintenance cost. Each LAN should have a
switch since it is more intelligent than hubs thus they will control data traffic and designate it to
desired destination. Unshielded twisted pair cables CAT 6 should be used to connect devices
within the VLAN. Fiber optic cables should be used to connect various VLANs since they
provide a high speed of data transfer and they carry larger volumes of data (Sterbenz et al.,
2010). As the business advances and opens new branches in other parts of the country, a wide
area network will adopted in which microwave communication will be used to connect various
LANs.
POS System Associated Risks
The various security risks associated with the POS system include:
Eavesdropping: it refers to the leakage of data to unauthorized entities during
transmission (Jouini, Rabai, & Aissa, 2014). The leakage is mainly caused by insecure and
unreliable transmission channels. It breaches the confidentiality and privacy of the business’s
data. Eavesdropping can be controlled using cryptographic techniques such as encryption and
adoption of more secure communication media.
Insider attack: This refers to an attack initiated by people within the organization. Such
people are authorized to access the data and the resources in the POS system but they use it for
purposes other than the ones they are authorized for. It is one of the most dangerous risks since
such attackers can distort the data thus making it to lose its intelligence and convenience in

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decision making. It can be controlled by improvising trail tracking in the system to trace actions
back to the initiator (Ruiz et al., 2012).
Virus attack: a virus is a malicious code that destroys the files in a system. Viruses can be
injected into the system by attackers or they can be embedded in files that are shared within the
system. They make files to be unavailable. This can only be controlled by installing strong and
reliable antivirus software.
Masquerading: This refers to where an attacker steals the identity of an authorized entity.
Such an attacker will request for and will be granted information. Thus, interfering with privacy
and confidentiality of data (Jouini et al., 2014). It can be controlled by creating multiple
authentication techniques in the POS.
Conclusion
From the above analysis of a POS system and how it has been implemented in Four
Season Green House and Nursery, it is evident that it has brought so many advantages to the
business in cost reduction, processes automation, customer service, and facilitated decision
making. However, there are few challenges associated with POS systems with many of them
relating to security, privacy, and confidentiality issues.
Recommendation
A comparison of the merits, demerits, risks, and cost of having POS in a business proofs
that a POS system is a suitable commodity for any business that wants to gain easy control of its
operations and gain a competitive edge in its respective market. Therefore, every business should
consider adopting a POS

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Appendix

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References
Coronel, C., & Morris, S. (2016). Database systems: design, implementation, & management.
Cengage Learning.
Edwards, T., Skoog, L., Babu, A., & Dorogusker, J. (2016). U.S. Patent No. 9,257,018.
Washington, DC: U.S. Patent and Trademark Office.
Falzone, L., & Ciabarra, C. (2012). U.S. Patent Application No. 13/227,397.
Jouini, M., Rabai, L. B. A., & Aissa, A. B. (2014). Classification of security threats in
information systems. Procedia Computer Science, 32, 489-496.
Kim, H., & Feamster, N. (2013). Improving network management with software defined
networking. IEEE Communications Magazine, 51(2), 114-119.
Kirchmer, M. (2012). Business process oriented implementation of standard software: how to
achieve competitive advantage efficiently and effectively. Springer Science & Business
Media.
Madden, C. A., & TAN, G. P. (2015). U.S. Patent Application No. 14/103,298.
McAfee, A., Brynjolfsson, E., Davenport, T. H., Patil, D. J., & Barton, D. (2012). Big data: the
management revolution. Harvard business review, 90(10), 60-68.
Ruiz, J. F., Harjani, R., Mana, A., Desnitsky, V., Kotenko, I., & Chechulin, A. (2012). A
methodology for the analysis and modeling of security threats and attacks for systems of
embedded components. In Parallel, Distributed and Network-Based Processing (PDP),
2012 20th Euromicro International Conference on (pp. 261-268). IEEE.

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Rush, J., Salz, R. D., Sandberg, M. J., & Tate, K. A. (2014). U.S. Patent No. 8,924,921.
Washington, DC: U.S. Patent and Trademark Office.
Sterbenz, J. P., Hutchison, D., Çetinkaya, E. K., Jabbar, A., Rohrer, J. P., Schöller, M., & Smith,
P. (2010). Resilience and survivability in communication networks: Strategies, principles,
and survey of disciplines. Computer Networks, 54(8), 1245-1265.
Turban, E., Sharda, R., & Delen, D. (2010). Decision Support and Business Intelligence Systems
(required). Google Scholar.
Vercellis, C. (2011). Business intelligence: data mining and optimization for decision making.
John Wiley & Sons.

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