Comprehensive Analysis of POS Systems: Benefits, Risks & Telecom

This report provides a comprehensive analysis of Point of Sale (POS) systems and their impact on modern business operations. It examines the advantages, such as real-time data accumulation, improved customer relationship management, and reduced transactional errors, as well as the disadvantages, including data security risks and maintenance requirements. The report highlights how POS systems offer a competitive advantage through enhanced decision-making, demand forecasting, and streamlined accounting processes. It emphasizes the benefits of centralized databases for data management and security. Furthermore, it explores telecommunication options for small businesses, recommending Local Area Networks (LAN) and wired Ethernet connections. Finally, the report addresses potential risks associated with POS systems, such as security breaches and data privacy concerns, and suggests measures for mitigation. Desklib offers a range of solved assignments and study resources for students.

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EXECUTIVE SUMMARY
POS systems is the need of the modern day transactional processing and accounting. This
report analyses different aspects related to use of POS systems. This includes analysis of
advantages and disadvantages of using point of sale systems. It also describes about the
efficiency of that POS system in making a better decision making process. It also explains the
reasons why centralised database system is better in management of information. There are
many telecommunication options available with the small scale firms. This report suggests
about all the telecommunication options available with the firm and the reason why they are
effective. At last it gives the risks that are attached with the use of POS systems.

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Content
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INTRODUCTION.................................................................................................................................2
Benefits and Demerits of using Point of Sale........................................................................................2
Competitive advantage provided by POS system..................................................................................3
Advantages of centralised database.......................................................................................................3
POS system improves decision making.................................................................................................4
POS systems processes business operations efficiently.....................................................................4
Effectiveness of the manual tracking.................................................................................................5
Questions that can be answered.........................................................................................................5
Better business management..............................................................................................................5
Telecommunication option available.....................................................................................................5
Network type.....................................................................................................................................5
Media types.......................................................................................................................................6
Risk of POS systems.............................................................................................................................6
CONCLUSION.....................................................................................................................................6
REFERENCES......................................................................................................................................7

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INTRODUCTION
Modern day business has taken the routes of technology and in this the idea of success lies in
the way technology is used within the organisation and its various procedures. They not only
helps in managing the sales accounts but also helps in collection of data that could be used
for other types of procedures (Khodakarami and Chan, 2014). Today most of the companies
have installed POS systems for managing their transaction processing system. This report
analyses different aspects of the POS systems and its impact on the business.
Benefits and Demerits of using Point of Sale
There are long ranging benefits and demerits associated with Point of sale system. In regards
to Four Seasons Greenhouse and Nursery the benefits and demerits of POS systems are as
follows:
Advantages
 POS system is helpful in accumulation of essential data especially the ones that are
related to sales and transactions. This can be done on real time basis.
 In the customer relationship management also POS systems are helpful as it alerts
people whenever the transaction is made. At the same time it makes the billing system
faster which reduces the frustration of people (Wang and Xue, 2014).
 More real time data can be received hence making the decision making process faster
especially the ones that are made for any specific period of time.
 It ensures that no transactional errors happen due to human faults.
 In accounts data redundancy can be a serious problem which is removed by the use of
POS systems.
 It brings transparency and accountability to the transactional process.
Disadvantages
 Since POS systems are attached with internet technology hence the chances of data
leaks and security issues exist.
 Maintaining information system is not a smooth task and requires IT professionals for
its maintenance.

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 Any kind of system failure might result in data loss.
Competitive advantage provided by POS system
It makes the transactional procedures easier which saves the time of the organisational
workforce. POS systems enhance the quality decision making capability of the organisation
which is very much necessary in the dynamic environment of business. POS system are
helpful in making decisions about the products that is not making success as the data
collected in this regards suggests that company should focus on which type of products more
(Kim and Lim, 2011). Along with this the data collected through POS systems suggests the
demand of which kind of product is on the higher side. This suggests the trends of the people
towards purchasing. This is necessary for developing or marketing products that can give
competitive advantage to the firm over others.
Along with these POS system upgrades the processes such as decision making, accounting
and performance management. All these are very much in today’s competitive business. Price
related queries can also be easily resolved with the help of POS systems. This works favour
of client satisfaction which is very much necessary in the modern day business. POS systems
removes human errors which if not properly undertaken then result in huge loss for the
company (Vani and Gupta, 2015). It helps in demand forecasting which is the need of the
modern day strategy making as sustainable business practices has become very much
essential for the long term growth of the company. This is very much essential in the case of
seasonal demand forecasting and understanding the current demand according to which
companies can arrange its resource. This helps in optimum utilisation of resources which
plays a crucial role in giving competitive advantage to firm.
Advantages of centralised database
Since data is collected from various sources hence the scope of data is also large. In the
multinational organisations the data banks in case of absence of centralised database can
increase is huge and might be present in different parts of the world. Some of the highlighted
benefits are:
 Due to absence of distributed database the management and protection of data can be
easily done. The point of attack also gets reduced.

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 Data retrieval process also gets easier as the data gets availed at single location hence
also reduces the complexity related to data portability (Paton, 2012).
 Changes and editing of data can be easily done with the help of data management
software.
 It also reduces the cost of data management as the numbers of systems that is required
in storing of data reduces with the implementation of centralised database.
POS system improves decision making
There are many core benefits attached with the use of POS systems and one of the prime
benefits is that it improves the decision making system of the organisation. Since the data
collected by the POS system are of strategic importance hence it benefits the company in
making strategic decisions that are realistic and gives them chances to gain higher success
(Niehues and Kolss, 2009). POS system has the capacity to manage the large amount of data
at a single go hence Four Seasons Greenhouse and Nursery can easily use it for making
decisions related to different operational units. As POS systems avoids errors due to human
mistakes hence the decisions that are made on the basis of the data collected by the system
will be of higher accuracy. A data driven approach to decision making is facilitated by the
organisation. This can be further improved with the help of software such as data analytics
hence removes the flaws in the business process.
POS systems processes business operations efficiently
Previously the data management process was considered to be one of the most challenging
processes. POS systems reduce the flaws in the process and also fasten up the speed of
operation. Both these things are very much necessary in the modern day business
environment. It is also crucial for the organisations to understand the challenges they are
facing in the accounting and thus can be removed by the help of making data driven policies.
It also reduces the chances of data redundancy as the duplication of data is detected at the
time it is done (Brimblecombe, Liddle and O'Dea, 2013). It can be directly store data into the
centralised database of which the benefits are illustrated in the above section. Apart from this,
manipulation of data is easily possible; this helps in sorting the data as per the requirements
of the decision makers. It also gives the idea about which units that are performing well and
which all are lagging. This helps in improving those units for achieving competitive
advantage. It also brings effectiveness as it improves three basic areas i.e. demand
forecasting, sales management and accounting.

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Effectiveness of the manual tracking
Manual methods of tracking the information can be a tedious process and hence most of the
organisation is not using it. The first disadvantage with this type of tracking is that it is slower
and does not fulfil the requirement of the modern day accounting and transactional
processing. Since the data is generated in huge bulk that too at multiple locations in different
parts of the world hence manual tracking methods are ineffective (Caldwell, 2014). In spite of
huge human efforts there is a chance that errors might occur hence the questions related to
authenticity and accuracy of data pertains. Instant decisions could not be done easily in the
manual processes of information tracking.
Questions that can be answered
There are several questions that can be answered through point of sale systems. It answers
questions related to sales transactions. It also solves the questions that arise in the accounting
operations. It also gives idea about the trending products and the mode of payments that is
chosen by customers (Rainer, et al. 2013). This further resolves the questions related to
changes that is required in the sales process so as to make improvements.
Better business management
Data that is gathered through the POS system can be utilised for making strategic decisions
which improve the business management. The data gathered through the POS systems can be
helpful for finding the lagging in the systems that is used in the process management (Adeoti
& Osotimehin, 2012). Information can also be used for restructuring the sales and marketing
processes so as to build an operational mechanism that is more customers centric.
Telecommunication option available
Telecommunication sector has undergone severe advancements. Being a small business unit,
‘Four Season Greenhouse and Nursery’ has a unique kind of telecommunication
requirements. The selection of options must be done wisely.
Network type
Among the three types of network options available with the firm, the requirement of the
company suggests that it should choose Local Area Network. Since the numbers of devices
that is to be connected with the network is less along with the fact that they are placed in
small area only hence LAN could be an efficient method of linkages (Hansen & Sia, 2015).

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In a limited area LAN provides a high speed connection which is beneficial for the company
in the long run.
Media types
Media types need to be selected appropriately as it plays an essential role in the performance
of the IT network and the systems present in that network. Both wired and wireless options
are available with the firm but since all the connections are to be made in smaller area hence
wired connections can be beneficial. This selection has been on these bases:
 Wired connections can be maintained easily.
 Very fast connection can be made through wired networks.
 Data leakage chances get reduced.
Ethernet cables are best for doing wired connections. This is because it is available at lower
cost and reduces the chances of data leakage also.
Risk of POS systems
There are different types of risks attached with use of POS systems. Some of the most
common risks are:
 Security: Large volume of data is available with POS systems. If these data can leak
into the wrong hands then it may give competitive advantage to others.
 Confidentiality: Since the data stored in the POS systems are confidential to both
company and their stakeholders hence if it gets breached then the chances of strategic
failures arise (Hongqiang, 2011).
 Privacy: Private data such as details of the cards are stored in the POS systems hence
if gets leaked then the privacy related issues arise.
In order to protect from such risk company must take use of firewall systems along with the
authentication systems.
CONCLUSION
A conclusion can be derived from the report that POS systems have many kinds of benefits
and disadvantages attached with it. Large numbers of benefits are associated with POS
systems hence giving competitive advantage to the organisations. Centralised database has a
benefit that it allows all the data to get stored at one place. Centralised database allows the

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access of data to all the authenticated stakeholders at the same time. Manual tracking is not
easy to do that too doing it flawlessly. LAN can be used by the company along with wired
connection that too is done using Ethernet cables.

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REFERENCES
Adeoti, O. & Osotimehin, K., (2012) Adoption of point of sale terminals in Nigeria:
Assessment of consumers’ level of satisfaction. Research Journal of Finance and Accounting,
3(1), pp.1-6.
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.
Caldwell, T., 2014. Securing the point of sale. Computer Fraud & Security, 2014(12), pp.15-
20.
Hansen, R. & Sia, S.K., (2015) Hummel's Digital Transformation Toward Omnichannel
Retailing: Key Lessons Learned. MIS Quarterly Executive, 14(2).
Hongqiang, Z., (2011) The Application of 3G Technology at Electronic Point-of-sale System
[J]. Value Engineering, 12, p.170.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship
management (CRM) systems in customer knowledge creation. Information &
Management, 51(1), pp.27-42.
Kim, Y.G. and Lim, J., 2011. A POS system based on the remote client-server model in the
small business environment. Management Research Review, 34(12), pp.1334-1350.
Niehues, J. and Kolss, M., 2009, March. A POS-based model for long-range reorderings in
SMT. In Proceedings of the Fourth Workshop on Statistical Machine Translation (pp. 206-
214). Association for Computational Linguistics.
Paton, N.W. ed., 2012. Active rules in database systems. Springer Science & Business Media.
Rainer, R.K., Cegielski, C.G., Splettstoesser-Hogeterp, I. and Sanchez-Rodriguez, C.,
2013. Introduction to information systems. John Wiley & Sons.
Vani, K. and Gupta, D., 2015, August. Investigating the impact of combined similarity
metrics and POS tagging in extrinsic text plagiarism detection system. In Advances in
Computing, Communications and Informatics (ICACCI), 2015 International Conference
on (pp. 1578-1584). IEEE.

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Wang, Z. and Xue, N., 2014. Joint pos tagging and transition-based constituent parsing in
chinese with non-local features. In Proceedings of the 52nd Annual Meeting of the
Association for Computational Linguistics (Volume 1: Long Papers) (Vol. 1, pp. 733-742).