The Impact of POS Systems on Business Operations and Decision Making

This report provides a detailed analysis of Point-of-Sale (POS) systems and their impact on business operations. It begins with an executive summary and table of contents, followed by an introduction that emphasizes the importance of technological advancements in modern business. The report explores the advantages and disadvantages of POS systems, highlighting their ability to improve efficiency, reduce human error, and provide valuable sales data. It then discusses how POS systems can provide a competitive advantage, particularly through inventory management and sales analysis. The advantages of a centralized database are outlined, emphasizing data security and accessibility. The report further examines the role of POS systems in decision-making, illustrating how they can aid in forecasting sales and optimizing resource allocation. Telecommunication options for POS systems, including LAN, WAN, and MAN, are also discussed, along with preferred technologies like wired and wireless options. Finally, the report addresses the risks associated with POS systems, focusing on security, privacy, and confidentiality concerns. The conclusion summarizes the benefits of POS systems and their potential to drive business growth and efficiency. The report uses the example of the Four Seasons greenhouse and Nursery to illustrate the practical applications and benefits of implementing a POS system.

Running Head: POS systems
IT FOR BUSINESS

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Executive Summary
The discussion in this report will be based on the implementation of technological tools into the
business fields and how it helps in getting a competitive edge. The major focus in this report is
based on the integration of POS system to the business and how it changes the business process.
The advantages and disadvantages of having a POS system will be discussed and how a POS
system helps in keeping track of the business and making the business more efficient will be
elaborated. Along with this, POS system telecommunication method and the risk related
associated with the same will be the major concern in this report.

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Table of Contents
Introduction:...............................................................................................................................................3
1. Advantages and Disadvantages of POS system....................................................................................4
2. Gaining competitive advantage through POS systems........................................................................4
3. Advantages of having a Centralized Database.....................................................................................5
4. POS system for Decision Making.........................................................................................................5
5. Telecommunication option for POS systems.......................................................................................6
6. Risk related to POS..............................................................................................................................6
Risk related to Security............................................................................................................................6
Risk related to Privacy.............................................................................................................................7
Risk related to confidentiality..................................................................................................................7
Conclusion...................................................................................................................................................7
References...................................................................................................................................................7

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Introduction:
Due to the fast paced technological advancement and ramification in the Information technology
field, it has become a mandatory step for every business to keep abreast with these changes. It
has helped the business in providing innovative and creative opportunities to simplify their
business process. Gone are those days where every business demanded effectiveness in its
business process, the current scenario of business demands an efficient business process as well.
In order to accomplish the same, the businesses are now more focused on integrating their
business process with techniques with more effective results (Coronel and Morris, 2016).
The paper specifically focuses on the implementation of such advanced tool called POS or point-
of-sale system. A POS system is used for a normal business transaction process for accepting
payments from the customers. The discussion will be based on the uses of POS and how POS is
used for decision making process. Moreover, the several aspects related to the POS system will
also be discussed and how POS system helped the Four Seasons greenhouse and Nursery to
accelerate their declining business to a stage of stable growth.
1. Advantages and Disadvantages of POS system
Any organization like Four Seasons could gain an upper hand in the business activities by
implementing such technologically advances sale system. There are various pros and cons
associated with the POS system some of them are:
The time lag caused due to the manual intervention of the humans can be reduced to a great
extent. POS systems are more fast and reliable, which improves the accounting process of the
business. The new POS sale system has an inbuilt reporting system which helped the business to
allocate resources to the various departments efficiently. Moreover, it also facilitates in tracking
the real time sales data which helps in making important decision related to business (Aurigi
2016).
Along with having several benefits, the new POS system is also prone to several external threats
related to security which are a disadvantage to the system. Also, POS system backbone is the
internet connectivity without which it is useless. The POS system relies on software which is a

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vulnerable element as it requires upgradation from time to time. Relying on such software can be
heavy on the pockets as the cost of maintenance and servicing is quite high.
2. Gaining competitive advantage through POS systems
As compared to the traditional sales machines, POS systems are more reliable, efficient and
helps us in getting desired results. It helps us inventory management, providing reports of sales
and transactions done, and there is no risk of human error. Being a fast sales system, makes the
business process faster which provides better customer service (Eason, 2014).
The users are able to track and store the sales data and update the inventory at the same. This
eliminates the manual intervention and the business can operate on lower inventory units. Using
the reports functionality of POS, one can analyze the sales history of a product and improves the
accuracy of the inventory counts needed. It can help in providing information about the product
through which the business is actually making profits and focus on the products which are less
profitable. This robust functionalities can provide the business with accurate results regarding its
business operations and reduces the gap due to human errors. All these factors combined
together, contributes in gaining competitive advantage (Ingram et al., 2015).
3. Advantages of having a Centralized Database
Switching to a centralized database is reliable for a company like four season and the data
security concern is minimized. The various advantages associated are:
 Having a centralized database reduces the security concerns as all the important data can
be stored at a particular location
 It minimizes the data redundancy and increase the data integrity which makes the data
collection more accurate and the users can rely on it.
 The data updated in the database can be easily accessed by an end user who has the
authentication (Dontigney, 2018).
 Having database at multiple locations increases the chances of data theft and also the cost
of maintenance is high, which is usually less in case of having a centralized database.
 The storage of such huge amount of data raises security concerns and having a
centralized database ensure that the data is protected with multiple layers of encryption
like passwords protection, firewalls etc (Ben-Shachar et al., 2014).

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4. POS system for Decision Making
Having a POS system helps an organization in forecasting sales details which helps in making
several decisions related to business process and inventory units. By analyzing the data collected
through sales, business owners can operate their business on leaner inventory units. It helps in
streamlining a business process and allocates resources to different departments according to
their needs (Hall, 2012).
The kind of information a POS system provides, helps the business in processing their activities
more effectively. By reviewing the reports, the owners can now analyze the products demands
and the profitability associated with it. Similarly for four seasons, the owners analyzed that the
products that they thought were producing profit for the business were actually less profitable. It
also helps in allocating the resources to the respective departments according to the deficit. This
data cannot be tracked manually as the accurate results can’t be attained. The system easily aids
in getting information about the sales transaction and updating the inventory at the same time,
which was not possible with manual process (Kim, 2015).
POS systems helps in answering various questions related to business process such as sales
transaction data, the inventory units needed etc. It effectively helps in answering questions
related to the profitability of a product. The information obtained from these data can be used by
four seasons’ business owners to accurately know which product is more profitable and
providing detailed knowledge about a product helped four seasons to mark the price of a
particular product more accurately (Lam et al., 2018).
5. Telecommunication option for POS systems
In order to store large amount of data, POS systems establishes communication through internet
as the data is stored on a cloud based server. To ensure an uninterrupted communication with
internet, preferably, three types of network configurations are preferred, which are LAN, WAN,
MAN.
LAN or a Local Area Network is mostly preferred for a connection that is to be established in a
small area, or in a confined place like for a small office. MAN (Metropolitan Area Network)
comparatively spans across a larger area than LAN, which covers several buildings in a

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particular city or town. A Wide Area Network or WAN can be spread across the boundary of a
state or a country and offers high speed connectivity. For a small business like Four seasons,
LAN is the recommended option for telecommunication as it is more secure and faster in a
confined area (Libby, 2017).
When it comes to medium of communication, every small business prefers wired technology to
ensure data security. For Four seasons, twisted pair unshielded cable can be used as it offers
much higher speed. The business owners can also opt for wireless form of technology as the
business is spread in a limited area. Wi-Fi and Bluetooth technologies are types of wireless
technology that can be integrated with the business process.
6. Risk related to POS
While offering several facilities to improve the business process, a POS system also has several
risks associated which are related to security, privacy and confidentiality.
Risk related to Security: The POS system is vulnerable to attacks from hackers who can
breach the system in order to gain access to the system. The hardware encryption is
comparatively weak and is prone to external threats. By using multiple layer of hardware
encryption one can avoid any such circumstances.
Risk related to Privacy: As the database of a POS system is loaded with personal data,
there is always a risk where in the private details might fall into the wrong hands. The customers
digital IDs and personal information is at stake. By restricting the access to such type of private
information to specific number of persons, one can avoid such circumstances (Cannataci et al.,
2016).
Risk related to confidentiality: The confidential information such as the name of the
dealers, business owners, transactions done, payment received are always an area of target for
hackers. To mitigate this issue, such confidential should be encrypted using an algorithm so that
it becomes difficult to crack into the system (Von Solms and Van Niekerk, 2013).
Conclusion
The discussion can be concluded by saying that POS system comes with several functionalities
and when integrated with the business process, it helps the business in providing a competitive

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edge. For four season’s business, POS system has expanded the sales profit to a great extent. The
owners now can effectively manage its inventory and allocate labor expenses to specific
departments. The technology has provided a solid infrastructure to the business and the data
collected can be leveraged to answer question related to increase the business efficiency. The
report discusses the advantages and disadvantages a POS system might have, but with proper
handling, the disadvantages can be eliminated. Thus, POS system is an excellent tool through
which the businesses can increase the productivity and gain benefit in their business process.

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References
Aurigi, A., 2016. Making the digital city: the early shaping of urban internet space.
Routledge.
Ben-Shachar, I., Erdogan, E.S., London, K.S. and Parsons, J.E., Microsoft Corp,
2014. Centralized publishing of network resources. U.S. Patent 8,683,062.
Cannataci, J.A., Zhao, B., Torres Vives, G., Monteleone, S., Bonnici, J.M. and Moyakine, E.,
2016. Privacy, free expression and transparency: redefining their new boundaries in the
digital age. UNESCO Publishing.
Coronel, C. and Morris, S., 2016. Database systems: design, implementation, &
management. Cengage Learning.
Dontigney, E., 2018. The advantages of Centralised Database storage [Online]. Available at:
https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html.
[Accessed on: 23 September 2018].
Eason, K.D., 2014. Information technology and organisational change. CRC Press.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., 2015. Sales
management: Analysis and decision making. Routledge.
Kim, L.S., 2015. Components of a Business Model and their influences on a firm
performance. Indian Journal of Science and Technology, 8, p.139.
Lam, T.S., Lee, H.H. and Tsai, S.J., Flytech Tech Co Ltd, 2018. Service data record system
and POS system with the same. U.S. Patent 9,881,283.
Libby, R., 2017. Accounting and human information processing. In The Routledge
Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Von Solms, R. and Van Niekerk, J., 2013. From information security to cyber
security. computers & security, 38, pp.97-102.

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