IT for Business: Detailed Analysis of Point of Sale (POS) Systems

This report provides a comprehensive analysis of Point of Sale (POS) systems, examining their advantages and disadvantages in various business contexts. The report highlights the benefits of POS systems, such as improved data tracking, inventory management, and enhanced decision-making capabilities. It also explores the advantages of centralized databases in supporting business operations. Furthermore, the report discusses the role of POS systems in gaining a competitive advantage, processing business activities more effectively, and facilitating data-driven decision-making. The analysis includes a discussion of telecommunication options, network types, and potential risks associated with POS systems, such as security, privacy, and confidentiality concerns. The report concludes by summarizing the key findings and emphasizing the importance of POS systems in modern business environments. The report references various academic sources to support its claims. This report is available on Desklib, a platform offering past papers and solved assignments to students.

IT FOR BUSINESS

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Contents
INTRODUCTION.................................................................................................................................2
Advantages and Disadvantages of new POS.........................................................................................2
POS helps in gaining competitive advantage.........................................................................................3
Advantages of having centralised database............................................................................................3
POS system facilitating decision making...............................................................................................4
POS systems process business activities more effectively.................................................................4
Can information be effectively tracked through manual methods......................................................5
Type of questions that could be answered.........................................................................................5
Information used to manage business in a better way........................................................................5
Telecommunication options for this POS system..................................................................................5
Type of network................................................................................................................................6
Type of media....................................................................................................................................6
Types of risks in POS system................................................................................................................6
CONCLUSION.....................................................................................................................................7
REFERENCES......................................................................................................................................7
INTRODUCTION
The use of technology has become very much the need of firms in different industry. Point of
sale is one such technological equipment. This technology has many kinds of advantages and

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disadvantages and is highly beneficial for the firm that operates its business at many places. It
helps in the process of decision making for the companies especially related to financial
affairs. This report analyses the different aspects associated with POS.
Advantages and Disadvantages of new POS
There are many advantages and disadvantages related with new point of sale systems.
Advantages:
 The system helps owners to track crucial data from their sales transaction at the same
instant when it is sold.
 Data collected through POS will help in updating inventory and compiling sales
history.
 A very large amount of data can be stored in very less space and it provides robust
functionalities like distributing, storing, inputting and tracking of the useful
information.
 It helps in making decisions related with inventory management which eliminates
confusions and hence helps business to operate on leaner inventory units (Adeoti and
Osotimehin, 2012).
 A detailed cost reporting helps in understanding the fact that which product is adding
more to the profit of the firm.
 It saves a lot of time of the managers who have the role of managing the information.
 It brings transparency and ensures accountability of various units.
Disadvantages
 Software based POS system have to be upgraded on regular basis. This may involve a
lot of cost to be put in.
 There are larger numbers of security risks involved if it gets hacked or goes into the
hands of unauthorised person.
POS helps in gaining competitive advantage
There are large numbers of benefits associated with use of POS systems. These systems are
highly helpful in the process of decision making as a very precise data is provided by it. This
detailed information helps in making of the decisions that are fact based and hence providing

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competitive advantage to the firms. Apart from this Point of sale gives immediate data about
the products that are producing more profits. It also helps in inventory management which
helps in cost control which helps in increasing the profitability of the nation (Hongqiang,
2011). It helps in controlling of the financial data which is necessary for having higher profits
and hence helps the company in becoming a market leader.
Advantages of having centralised database
A whole lot of benefits are added with the use of centralised database. This is highly useful
for the bigger firms but is also beneficial for the smaller firms. Some of the advantages are as
follows:
 High data integrity and low data redundancy can be ensured by keeping data at one
place.
 Higher data security as the place where the attacks can be possible is one (Dontigney,
2018).
 Easier access to the data at the required time especially at the time of decision making
as the data collected in any part of the world can be available to the decision makers
at the same time it is generated.
 Database management and data portability becomes easier.
 Cost effective as lesser amount of resources will be required for data protection.
 Updating and making changes in data is easier.
POS system facilitating decision making
As the large amount of data can be available with the POS systems hence it contributes
largely to the decision making process. The first and the foremost thing that it does is that it
helps in making of the data driven decisions which is necessary for gaining of the competitive
advantage.
POS provides a precise data related to sale of the products which is necessary for the growth
of the organisation and its revenue margins. Since the data that are real time hence a better
decisions can be made especially related to discounts and offers. The data gathered can be
used for improving back office operations and enhancing consumer experience (Ingram, et
al., 2015). It ultimately assists in taking more informed and evaluated decisions. With the
help of POS data, customised marketing decisions can be made. It also assists in the process

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of analysing the data that is crucial for making highly competitive decisions as it helps in
focusing towards the loop holes that is present in the sales and promotions. The products that
are providing higher benefits can be promoted with the help of details obtained through POS
systems.
POS systems process business activities more effectively
The first and foremost thing that POS does is that it eliminates manual method for data
manipulation. The data that is generated immediately at the point of sale can be tracked with
the use of POS system. This can be regarding ordering diminishing stock to finding the best
sellers. It can also be done with the help of manual methods, but it is not effective from the
point of view of time management (Jones, et al., 2012). It gives the detailed explanation
about the type of orders that is more preferred by the customers. This will be beneficial at the
time of strategic decision making especially when the STP strategy is to be used.
Can information be effectively tracked through manual methods
It can be done with manual methods but it will take more time which is not good in the
modern day business. In the manual methods there are lot of chances of getting
misinterpreted data which can lead to wrong decisions to be made (Rese, Schreiber and Baier,
2014). Tracking of information takes a lot of time and human efforts and there still will be the
confusions regarding the appropriateness of the tracked information. In the modern day
business where decisions must be made based on the real time data, the use of manual
tracking is not effective.
Type of questions that could be answered
There is larger number of questions that could be answered with the use of data that is availed
through POS. Questions related to the functions like marketing, sales or financial operations
can be easily given through the help of POS systems. Apart from this, the queries regarding
the customers are also provided which is valuable for the company at the time of decision
making.
Information used to manage business in a better way
Many types of information are collected by POS and are of strategic importance. All these
information can be used for making of the decisions as well as focusing on the areas where
they find discrepancies. Changes in the business processes can be made based on the data that
is collected through the POS systems (Hansen and Sia, 2015). Data driven approach in

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various operations can be followed which can helps the firm in managing the business in a
better way.
Telecommunication options for this POS system
There are several kinds of telecommunication options that are available with the Four
Seasons Greenhouse and Nursery Company. The selection of the telecommunication option
must be done as per the requirement of the firm. Some of the most common options available
with the firm are regarding the type of network it must use to the type of media they must
take use of.
Type of network
Among the various available options LAN could be the best type of network that could be
used. This is because the cited firm is a small business and hence the requirement of the
network is in very small area. LAN connectivity provides higher speed and takes use of lesser
amount of resources which can be beneficial in the case of small firms having limited
financial resources.
Type of media
Wired technology can be beneficial for the small firms like Four Seasons Greenhouse and
Nursery. This is due to the reason that wired connectivity is having higher speed as well as
there will be less chance to get hacked. Ethernet cables can be used for this connection.
Types of risks in POS system
Several types of risks are associated with the use of POS system. There are various ways
through which the businesses can be protected against these risks. Three most common types
of risks that are brought through the use of POS system are:
 Security: Since a huge amount of data is stored on the POS system and most of the
data are of strategic importance hence it is essential that a company ensures the
security of these data. If not it may lead to some serious problems to the stakeholders
(McCarthy, 2018). If the data gets hacked somehow, then it may lead to financial loss
which is not good for the growth of the company. For ensuring security data
protection software and other authentication systems must be used.
 Privacy: POS system contains many types of crucial data (Expert market, 2018). This
call for the need to manage the privacy of the data stored. It is understood by the fact

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if the data related to the customers gets into the hands of unauthorised person then it is
a loss to their privacy. This does not go in the goodwill of the firm.
 Confidentiality: With the use of POS systems there is always a chance that
confidentiality regarding the customers can get leaked. With such a huge number of
credit and debit cards being scanned, this becomes a much critical issue. Taking use
of the firewalls like passwords can be beneficial in this regards.
CONCLUSION
From the above report it can be concluded that there are larger number of advantages and
disadvantages associated with the use of POS systems. It helps in giving competitive
advantage due to precise decision making. Centralised system can be beneficial for the firm
as it promotes people in making efficient decisions. LAN with wired connectivity can be
beneficial. Along with this security, privacy and confidentiality treats are linked with use of
POS systems.
REFERENCES
Adeoti, O. and 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.

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Dontigney, E., (2018) The advantages of Centralised Database storage [Online]. Available at:
https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html.
[Accessed on: 7th May 2018].
Expert market (2018) Expert Point-of-sale. [Online]. Available at:
https://www.expertmarket.com/pos/pos-system-advantages. [Accessed on 7th May 2018].
Hansen, R. and 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.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., (2015) Sales
management: Analysis and decision making. Routledge.
Jones, S.C., Barrie, L., Robinson, L., Allsop, S. and Chikritzhs, T., (2012) Point‐of‐sale
alcohol promotions in the Perth and Sydney metropolitan areas. Drug and alcohol
review, 31(6), pp.803-808.
McCarthy, M., (2018) The benefits of Moving to a Point-of-sale (POS) System. [Online]
Available at: https://www.allbusiness.com/the-benefits-of-moving-to-a-point-of-sale-pos-
system-10206841-1.html. [Accessed on 7th May 2018].
Rese, A., Schreiber, S. and Baier, D., (2014) Technology acceptance modeling of augmented
reality at the point of sale: Can surveys be replaced by an analysis of online
reviews?. Journal of Retailing and Consumer Services, 21(5), pp.869-876.