Answer

Point of Sale (POS) Systems 

Table of Contents

List of Abbreviations…………………………………………………………………………………………………………… 3

Point of Sale (POS) Systems…………………………………………………………………………………………………. 4

 Introduction………………………………………………………………………………………………………………… 4

Advantages and Disadvantages………………………………………………………………………………………… 4

Centralized Database……………………………………………………………………………………………………… 5

POS in Decision Making…………………………………………………………………………………………………… 5

POS Telecommunication Options……………………………………………………………………………………… 6

Risks and Mitigation……………………………………………………………………………………………………….. 7

Conclusion…………………………………………………………………………………………………………………… 8

References………………………………………………………………………………………………………………………. 8

List of Abbreviations

POS- Point of Sale Systems

SMEs- Small and Medium Enterprises

LAN- Local Area Network

WAN- Wide Area Network

MAN-Metropolitan Area Network

Point of Sale (POS) Systems

                  Introduction

            Point of sale (POS)is a sales reporting system that records and analyzes the sales data to facilitate informed decision making. It is effective in customer management since it provides log purchases data necessary to determine the appropriate marketing strategies. Besides, POS systems facilitate effective inventory and employee management (Jones, 2011). This paper seeks to analyze the advantages, applications, and concerns of POS systems as well as its use in Four Seasons Greenhouse and Nursery case study.

Advantages and Disadvantages

            The advantages of the new point of sale (POS) system include the ability to update sales and inventories without manual tracking. As a result, it is easy to identify the products that fetch the highest profits (Brook, 2013). However, the POS system has the disadvantage of the high installation and maintenance cost it attracts especially for small and medium enterprises which lack the necessary resources and expertise (Gochhwal, 2017).

            However, technology is crucial to give an organization competitive edge (Jones, 2011). It also saves time that would have been spent checking up the inventories and tracking sales making it possible to allocate labor expenses to particular functions and departments (Gunasekaran & Sandhu, 2013). As a result, operations are efficiently run and the time is saved which gives the organization a competitive edge against rivals (Hunter, 2015).

Centralized Database

            A centralized database is considered advantageous because it offers information security since the security detail of the organization is concentrated in the same place (Beynon-Davies, 2013). The database is also believed to offer better storage capacity and support and keeps an updated record of historical information for future reference (Gomzin, 2014). Besides, data integrity is upheld and administration and update of information can be easily facilitated in a centralized database (Buhl & Lehnert, 2014).

POS in Decision Making

            Point of sale systems provides an avenue for data tracking at during sales (Brook, 2013). This creates a sales record for every product and updates the inventory. Since the remaining stock is easily traced at any point, it is easy to determine when to restock (Hunter, 2015). Additionally, profit from each product is indicated and the management can track the most profitable products and those running at a loss and improve the pricing (Gunasekaran & Sandhu, 2013). Therefore, the point of sale provides hard facts that enable the management to make decisions efficiently and effectively knowing the business performance (Jones, 2011). Information generated by the point of sale systems can be manually obtained by physical stock taking and sales tracking. However, according to Gomzin (2014), due to the huge amount of time needed to count every product and the increased margin of human error, manual tracking is not considered effective when compared to the point of sale systems. According to Hunter (2015), one of the questions addressed by the point of sale information system is whether the products are priced appropriately. It also addresses the query on products profitability and which products should take up more space within the business facility (Sarngadharan & Minimol, 2013). Finally, the system answers whether the slow-moving items have been allocated too much space that should be packed with fast moving products (Gochhwal, 2017). The information system could be used to better manage the business by generating reports regularly to analyze the state of operations (Jones, 2011). These reports indicate whether the business is efficient or not and enables management to come up with appropriate strategies that can optimize profit (Laudon & Laudon, 2018). It can also be used for appropriate allocation of resources such as time and labor to ensure all processes run smoothly and reduce the time customers spend in the store. The implication is that the business gains a competitive edge in the market (Gunasekaran & Sandhu, 2013).

POS Telecommunication Options

            According to Beynon-Davies (2013), the POS system can use either LAN, WAN, or MAN networks. Local Area Network (LAN)is used to connect devices separated by short distances. A home, school or building can be networked using a single LAN cable or a small cable per room (Buhl & Lehnert, 2012). Besides, LAN has the benefit of being implemented using a single IP and its operation space is limited (Sarngadharan & Minimol, 2013). The ability of a single person to manage, control and own a LAN is also advantageous (Gomzin, 2014). LAN uses Ethernet and Token Ring connectivity technologies. Wide Area Network (WAN) on the other hand spans over a wide distance and involves geographically dispersed LANs. The routers used maintain both the WAN and LAN IP addresses. WAN ownership is distributed and nobody can claim control and maintenance. MAN spans a medium area larger than LAN but smaller than WAN (Buhl & Lehnert, 2014). It is normally used and owned by a single large body such as a corporation. For this POS, LAN network is ideal since the entity is a small to medium business. Besides, LAN gives monopoly of control over the network which increases the system security (Sarngadharan & Minimol, 2013). Wired technology is the appropriate media for the POS. Wired media consists of LAN ethernet cables connected to various computers within the business (Moody & Jordan, 2014). The technology is appropriate because wired networks have increased speed, low costs, better quality of service and have a high system bandwidth (Laudon & Laudon, 2018). Thus, wired media is considered more reliable for the SME point of service system. However, the business can have a LAN e-card for the manager’s laptop. This will enable the manager to track performance of the business even when not in the office and offer informed advice when required (Beynon-Davies, 2013).

Risks and Mitigation

            The business point of sale system needs Internet connectivity for processing of transactions. Moody & Jordan (2014) states that anything that uses the Internet is exposed to various security, privacy, and confidentiality risks. System security is prone to cyber attacks such as hacking (Beynon-Davies, 2013). Once the systems are hacked, they can be corrupted and sensitive information extracted. For instance, a hacker can obtain sensitive client information and use it against the organization. This would be considered a breach of the client privacy. Gomzin (2014) states that when all employees can access the information on the point of sale system, they can leak it to the competitors. As a result, rivals can use the information to devise ways of countering the input placed on the business to gain a competitive edge which can lead to ultimate business downfall. Besides, unfaithful employees can disclose sensitive client information to competitors who can use it to tailor their marketing and draw them to their businesses leading to loss of sales (Laudon & Laudon, 2018).

            Security risks can be mitigated by ensuring the default password and user-name given by the system manufacturer is customized and the POS operates behind a firewall (Buhl & Lehnert, 2014). Additionally, for all data transmitted, a strong encryption should be set and client data must be limited to the employee that actually need to use it. All employees should be required to sign a confidentiality agreement to ensure company and employee information does not leak out to competitors (Laudon & Laudon, 2018). Finally, all anti-malware software should be kept up to date and whenever concerns arise on the POS system security, the service provider should be notified promptly (Gomzin, 2014).

Conclusion

            Point of sale information systems is crucial for effective management of a business. Whether large or small to medium businesses, the system furnishes management with requisite information to make informed decisions. Point of sale systems for small to medium businesses can be effectively installed using wired LAN networks for speed and high broadband width. Security of the systems should always be maintained and management should be on the lookout for ant breach of privacy and confidentiality.