Point of Sale (POS) systems

This report discusses the use of POS systems and how it helps in improving business operations. It covers the advantages and disadvantages of POS, gaining competitive advantage, advantages of centralized database, decision making using POS, options of telecommunication for POS, and risks related to POS and how to protect them. The report is based on the example of Four Seasons Greenhouse and Nursery.

Running Head: Point of Sale (POS) systems
IT FOR BUSINESS

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Point of Sale (POS) systems
Executive Summary
In this report a comprehensive discussion will be done on the use of a new technological tool
called POS or point of sales system and how a POS system is used to improve the business
process. Four seasons Greenhouse and Nursery is a small business which initially used manual
register to keep track of their work. Now, the business has integrated POS systems with its
business operations and is using the data collected to make the process more efficient. The report
will discuss the pros and cons of a POS and how it helps in gaining competitive advantage for
four season’s owners.

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Point of Sale (POS) systems
Table of Contents
Introduction....................................................................................................................................3
1. Advantages and Disadvantages of POS systems..................................................................3
2. Gaining competitive advantage through POS.....................................................................4
3. Advantages of Centralized Database....................................................................................4
4. Decision making using POS...................................................................................................5
5. Options of Telecommunication for POS..............................................................................6
6. Risk related to POS and how to protect?.............................................................................7
Security risks associated with POS...........................................................................................7
Privacy risks associated with POS............................................................................................7
Confidentiality risk associated with POS.................................................................................7
Conclusion......................................................................................................................................7
References.......................................................................................................................................9

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Point of Sale (POS) systems
Introduction
As the world is moving fast in the field of technological advancements, it is important for every
business to integrate its business process with advanced technology to make its operations more
efficient. The application of information technology in the business sector has brought drastic
changes on how business operates and excels. With these technological ramifications, the
businesses are now focusing on becoming more efficient than being effective. As such advanced
tools provide an advantage of simplifying the process more. Nowadays business are focusing on
innovative ways for getting more efficient results in business.
The report will be discussing an example of such advanced technological tool called POS or
point of sale system and how it helped a garden center named Four Seasons Greenhouse and
Nursery to enhance their business operations. A POS system is used to make transactions for
accepting payments from customers. Initially, four seasons used to rely on manual registers to
carry out the business process but after implementing the POS system with the business
operations, it has helped the business to grow and get information about various aspects of the
business process.
In this report, the use of POS will be explained and what are its advantages and disadvantages.
Also, the paper will cover how POS helps in excelling the business and gaining competitive
advantage along with several other aspects.
1. Advantages and Disadvantages of POS systems
Every technology once integrated into the business operations provides various advantages, but
this technology also has its cons and drawbacks which should also be taken into consideration by
the business. There are several advantages and disadvantages of a POS system which are:
By implementing POS system into the business operations, the most important advantage a
business can gain is improved efficiency of the process. POS system automates the process and
there is no need of manual intervention of people in recording the price of products. It also helps
in better management of stock and helps the business to operate on leaner inventory. With the

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Point of Sale (POS) systems
help of POS, users can update the inventory at the time of sale of the product. POS provides a
facility of generating reports through which one can identify the sales trend of a product and its
demand (Sapolsky et al., 2018).
Although, POS system provides several facilities for improving the efficiency a business process,
but it also has few drawbacks. In order to ensure that the POS system is working efficiently, it is
mandatory that internet connectivity is available 24x7. Also, the POS system relies completely
on software so it is important to update the software from time to time. Failing to do so, the
software may crash at any point of time, thus disrupting the whole process. The maintenance of
this software is not very cost effective. There is always a risk factor associated with the POS
system which is related to data breach. In order to ensure the security of POS, multiple level of
authentication should be implemented (Gomzin, 2014).
2. Gaining competitive advantage through POS
Every business strives to be ahead of the rival companies in this competitive environment and in
order to make sure of this, it is important to bring innovation in the business process. Through
POS system, business owners can gain various insights about its operations and devise strategies
accordingly. For four season’s business, it helped the business in keeping track of the important
sales data. Through this data, the owners can now accurately update the number of units of
inventory needed. This helped the four season business to operate on leaner inventory units
which reduced the total cost.
It is very important for a business to strategize the ways through which a business can be more
efficient in order to gain competitive advantage. Using the report generation functionality of
POS, it helps in providing information of the most profitable product and the product with the
most demand. Four seasons, business owners realized that the product they thought was giving
them most profits was actually the opposite. With this report feature, it helped the owners in
getting real information about that particular product. With all these functionalities combined
together, POS system helps in providing accurate results regarding the business which facilitates
a business in getting a competitive edge (Schwalbe, 2015).

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Point of Sale (POS) systems
3. Advantages of Centralized Database
For a growing business like four seasons, there is a large amount of data that is to be stored and
secured which is not possible by using a simple hard drive. As it increases chances of data theft
and has security concerns. Having a centralized database for a business like four season, helps in
reducing the chances of security issues and ensures the data protection. There are various
advantages of having a centralized database which are:
 Centralized database offers data preservation. Even if there is any case of hardware
failure, having a centralized database ensures that the data is protected all the time. It is
equipped with a fault tolerance setup that preserves the data even in catastrophic
situations.
 The concern related to physical security is taken care of in case of centralized database. It
restricts direct access to the database if there is a proper security of server room. Thus,
not allowing any outside agent to get direct physical access.
 The data collected in databases are very private and has sensitive information. To ensure
the data security, centralized database offers better protection (Osman and Knottenbelt,
2012).
 Having a database at a single location, offers improved security along with less
maintenance costs. Rather than establishing databases at various different locations which
is very costly.
 An update of data in a centralized database can be accessed by all the end users having
proper authentication. This provides a comprehensive access to the data.
 The overall space requirement of a centralized database is very less as it is limited to a
particular location
4. Decision making using POS
POS facilitates in answering the Why’s and how’s of a business process which aids in taking an
effective decision regarding the business process. With the help of the data collected through
POS, one can take decision to improve the business process. The data helps in determining the
exact count of inventory needed in order to avoid the situation of ordering bulk inventory. The
reporting facility of POS helped the four seasons owners in getting detailed transaction details

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Point of Sale (POS) systems
about a particular product whether it is profitable or not and mark the price of the products
accordingly (Kelly and O’Connell, 2015).
The POS system information helped the four season’s owners to implement price changes
effectively. POS system has the ability to process sales, transactions and inventory with
immediate effect which reduces the manual intervention of humans. This reduces the time which
can be used for processing the business activities more effectively. The information gathered
through POS system is used to make stable decision which cannot be tracked manually. Four
seasons owners used manual register and paper work to keep track of their sales data which
resulted in loss as the data collected through this manual process was not accurate (Oppenheimer
and Kelso, 2015).
There are several questions that can be answered through the data collected by POS system such
as the sales history of a product, the product with most demand, the need of inventory units etc.
All such information can be used to effectively allocate resources to each department, mark the
prices of a product, offer temporarily discount on a product. The information can also be used to
manage the labor expenses by allocating the manpower according to the need (Marchewka,
2014).
5. Options of Telecommunication for POS
It is important for a POS to have an uninterrupted connection with the internet in order to
exchange the data. In order to ensure there is no hindrance in the communication, there are three
preferred network configurations which are LAN, WAN and MAN.
A LAN is basically a Local Area Network which is connection of a group of computers
connected together within the same building or office. LAN is confined in a particular area and
preferred for small businesses. The terminals of POS are connected to the POS servers with the
help of Local Area Network. TCP/IP protocol is supported by POS.
MAN is Metropolitan Area Network which is spread across several buildings in a particular city.
MAN is typically larger network than LAN.
WAN or Wide Area Network is limited across the boundary of a state or a country. Several
LAN’s are connected in order to form a WAN. WAN is not limited to a geographical location.
WAN offers a secure mode of transmission of data across the networks. The data transmission is

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Point of Sale (POS) systems
comparatively higher and much more reliable than the other form of network transmission. In
order to get direct access to clients who are at distant places, four seasons can use WAN form of
network connection (Hasson, Chen and Honey, 2015).
The medium of communication is very important for every business to ensure uninterrupted
service. For a small business like four seasons, wired form of technology is recommended as it is
more reliable and ensures data security. For high speed transmission, twisted pair unshielded
cables can be used for four seasons business. The owners can also opt for wireless technology as
it reduces the cost incurred due to wires. Wireless technology example includes Wi-Fi and
Bluetooth technology which can also be preferred by four seasons.
6. Risk related to POS and how to protect?
While on one hand, POS systems offers several facilities that improves the efficiency of a
business process, on the other hand, there are also several risk which are related to the
confidentiality, security and privacy of data.
Security risks associated with POS: A risk associated with the security is a serious matter of
concern to the business. Such systems which rely on software are always prone to attacks from
the external agents like hackers. They can easily break into the system and gain access to data
and the emails. These systems usually have weak security system and can be easily breached.
The system should be equipped with several layers of encryption which makes it difficult for the
hackers to get into the system.
Privacy risks associated with POS: Every business has a huge amount of data which is stored
into the database every second. The data contains private and sensitive information which always
raises a security concern. The private data may include the employee’s login credentials,
personal information, digital IDs of customers which is to be ensured that they might not fall into
an unknown person’s hand as it may result in getting access to all the private information of an
organization. In order to ensure that the privacy related risk is minimized, the access of such data
and system should be given only to some specific peoples or authorized peoples of the business
(Cannataci et al., 2016).
Confidentiality risk associated with POS: Confidential data are those data which are limited to a
specific person or group of few persons. POS systems have several confidential information like

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Point of Sale (POS) systems
name of the business owner, the dealer of the business, client and other payment related
confidential data. These data are always a soft target for the hackers which may give access to
insights of business operations. It should be ensured that such confidential data should always be
encrypted which becomes difficult to crack (Turner and Musman, 2018).
Conclusion
The above discussion can be concluded on the fact that POS systems facilitate business
operations and improves the overall efficiency by automating the process. It helps in tracking
sales data at the time when a product is sold and get accurate results regarding the inventory
units needed. The technology curtails the need of manual intervention in the business which
makes the process faster and there is less chances of human error. Having so many advantages
on one hand, the drawbacks associated with such systems is also discussed. An effective way of
telecommunication option for POS has been described. In order to make sure that the business is
making profit, proper analysis of the data collected through POS should be done. This will
ensure that the business is growing at an exponential rate.

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Point of Sale (POS) systems
References
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.
Gomzin, S., 2014. Hacking Point of Sale: Payment Application Secrets, Threats, and Solutions.
John Wiley & Sons.
Hasson, U., Chen, J. and Honey, C.J., 2015. Hierarchical process memory: memory as an
integral component of information processing. Trends in cognitive sciences, 19(6), pp.304-313.
Kelly, S.P. and O’Connell, R.G., 2015. The neural processes underlying perceptual decision
making in humans: recent progress and future directions. Journal of Physiology-Paris, 109(1-3),
pp.27-37.
Marchewka, J.T., 2014. Information technology project management. John Wiley & Sons.
Oppenheimer, D.M. and Kelso, E., 2015. Information processing as a paradigm for decision
making. Annual review of psychology, 66, pp.277-294.
Osman, R. and Knottenbelt, W.J., 2012. Database system performance evaluation models: A
survey. Performance Evaluation, 69(10), pp.471-493.
Sapolsky, H.M., Crane, R.J., Neuman, W.R. and Noam, E.M., 2018. The Telecommunications
Revolution: Past, Present and Future. Routledge.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Titterington,J., 2018.POS REVIEW. [Online]. Available at:
https://www.merchantmaverick.com/reviews/toast-pos-review/. [Accessed on: 26 September
2018].

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Point of Sale (POS) systems
Turner, A.J. and Musman, S., 2018. Applying the Cybersecurity Game to a Point-of-Sale
System. In Disciplinary Convergence in Systems Engineering Research (pp. 129-144). Springer,
Cham.

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Point of Sale (POS) systems
Appendix
(Source: Titterington, 2018).