Advantages And Disadvantages Of POS Systems For Retail Firms

Advantages of POS Systems

Discuss about the Impact of IT on Business for Centralised Database Storage.

Technology has facilitated retail firms to smoothen their work process (Falzone and Ciabarra, Revel Systems Inc, 2012). In retail industry, there are various kinds of information that are generated through different platforms. It is essential that organisation generates to incorporate such technology that helps in the management of such data. Point of sale is one such device that is used by organisations so as to manage the sales data. This report describes the various aspects associated with the use of POS.

POS system has empowered the firms in many ways. It has brought both positive and negatives with them. There are several advantages and disadvantages attached with POS system. Some of advantages are as follows:

• POS system helps in maintenance and storage of data at the same time when the products are sold (Duvall, et. al., 2012).
• It diminishes the probability regarding transactional errors.
• It shortens the operational time related to transactions.
• Problem related to data redundancy is eliminated.
• It helps in CRM practices as it alerts people regarding their sales transactions.
• Since data can be taken out from the system anytime hence better and real time decisions can be made.
• It assures accountability and brings transparency in the sales procedures.

Disadvantages

• System maintenance is not an easy task and requires an IT professional for upgrading the technology.
• Data piracy and security related threats are present.
• If the system gets hacked there can be loss to huge amount of data.

Having such a huge amount of operational benefits attached with POS system, it acts as a value adder for the company (Weber and Bailey, Visa International Service Association, 2016). There are ranges of processes that are made easier with the help of POS system. The first and foremost thing it does is that it enhances the quality of decisions that are made inside the organisation. With the huge amount of data it helps in streamlining the work process in such a manner that it gives competitive advantages to the firms like Four Seasons Greenhouse and Nursery. The second important thing that it does is that it enhances the quality of strategies that is made in the organisation as strategies are made according to the data that are relevant. This helps in maximising the profits which is again necessary for providing competitive advantage. POS systems fasten the operational speed which is necessary in the modern day business. Along with this it also helps in improving the standards of CRM. It helps in removing of faults that are present in the sales transaction process. It reduces cost of employment which is given to the employees that are engaged in information management.

In the age of digital business, data is highly necessary for making decisions (Burns and Schwartz, 2011). It has become essential for the organisations to make sure that there are lesser chances of leakages. Taking use of centralised database ensures that all the units within the organisation can access the essential data on time. There are following advantages associated with centralised database:

• As the data is stored at one place hence the sites at which the attacks is possible is one.
• At the time of decision making of various units can avail data easily. They do not have to access different sources for retrieval of data.
• Data portability and its management become highly efficient.
• In centralised data storage, number of resources that are required is also less hence making the operations cost effective.
• Managing data and making changes in them is relatively easier. This help in gathering of updated data.

In the making of effective decisions, data plays a highly crucial role. As this system is able to handle a huge amount of data that too on the real time basis hence decisions becomes very effective (D’angello, 2018). This is extremely important in the case of small business like Four Seasons Greenhouse and Nursery. POS systems when implemented help them in adopting data driven approach to decision making which is crucial for gaining competitive advantage in the market. Accurate and appropriate approach is used by POS system. It assists them in making decisions that are unique and is as per the need of the firm. Decisions that are very appropriate and evaluative can be made with the help of gathered data which is further necessary for finding the loop holes in the activities that they do (Dontigney, 2018).

Disadvantages of POS Systems

Earlier, the manual methods have been used for data manipulation. It was a process that was highly time-taking. Because of the slow process and lot of data redundancy chances, there is a higher probability that wrong decisions could be made (Expert market, 2018). It makes business activity highly significant as data can be tracked easily. In the modern day business real time data has higher significance. The data that was gathered by manual methods may not be easily arranged and hence it enhances the efforts of the employees. POS systems are linked with ordering diminishing stocks which helps in tracing the seller that are doing better. In the making of STP strategy these data can be highly significant (Polasik, et. al., 2012).

Information can be tracked with the help of manual methods also but it is a tedious process and takes a lot of time. In the modern business environment, this can be unsuitable. If the data is tracked with the help of manual procedures, an element of doubt remains in the minds of stakeholder regarding its correctness (Rese, Schreiber and Baier, 2014). It is not considered as effective since it does not help in the case of quick decision making process.

Several sorts of questions could be answered with the use of POS Systems mainly that are associated with the sales and transactional processes. It also provides answers related to consumer’s choice or regarding the products that are giving competitive advantage to the consumers (Morandi, et. al., 2015). It also helps in finding the flaws that are present in several organisational units under Four Seasons Greenhouse and Nursery.

POS systems provides data are of strategic importance and helps in streamlining the process. Along with this, the data that is gathered through POS device can help in forecasting the products demand which is beneficial for making themselves ready for higher turnouts (Greer, et. al., 2011). Collected data works as a tool for finding the inefficiencies which is required for making plans for eliminating it. This makes the management of business processes more effective and solid.

There have been considerable advancements in the telecommunication sector and hence many options are available with Four Seasons Greenhouse and Nursery. Selecting an options related to telecommunication should only be based on the requirement of the cited firm. Options are also available in terms of the type of networks used.

In among the various choices that are available with Four Seasons Greenhouse and Nursery Company, utilisation of LAN connection can be appropriate. The cited firm is having limited amount of resources as it is at the developmental stage. Firm has confined capability in terms of financial resources hence LAN could be beneficial. Apart from this, LAN also provides a higher data connectivity.

Importance of Centralized Database

In the available space with the firm is less hence taking use of wired connection could be highly beneficial. It is illustrated by the following facts:

• It is easier to maintain the infrastructure (Lee, et. al., 2011).
• Data transfer happens at high speed.
• The chances of data leaks is less

Taking use of Ethernet cables for the connection can be highly advantageous because of the fact that it is available at lower cost and the chances of data leakage is also less.

POS systems are also a part of the IT systems. This makes the POS system to be at greater risk to data threats. The cited company has to understand the type of risks and its effect on the business. Some of the common types of risks are:

• Security: There are large amount of data available with the POS systems and hence it is crucial for the firms to make sure that they apply effective measures so as to ensure the data security. If the hackers are able to breach the data, then there is a chance that their position in the market is at stake (Szell, Lambiotte and Thurner, 2010). If they are able to get the financial data of the firm, then there is always a chance that it may result in heavy financial loss to the company. Taking use of the information security software, a higher security to the data can be provided to the Point of Sale systems.
• Confidentiality: POS systems have information that is associated with the shareholders. There are many cards which are getting swiped on daily basis and hence giving protection to it is highly important. Data abstraction is the feature that is highly required in any firm and hence an effective system infrastructure needs to be made. This will help in maintaining the confidentiality of the data that is gathered through POS system.
• Privacy: Huge amount of crucial data is available with the POS systems hence it has become crucial for the firms to ensure the privacy of the all these data (Hongqiang, 2011). Protecting data has become extremely essential. In order to make sure that private data can be secured. Any kind of privacy breach could lead to image failure for the Four Seasons Greenhouse and Nursery. Use of firewalls such as password protected systems or use of gateways can help in maintaining the privacy of the data that is available with the firm.

Conclusion

A conclusion can be derived from the above report, that Four Seasons Greenhouse and Nursery is adopting POS devices for its sales and transactional processing. There are several advantages and disadvantages that are linked with the use of POS systems. POS system gives competitive advantage to the company. POS system facilitates in decision making and use of centralised database can be highly crucial. POS system is highly beneficial as it helps in various business activities. Taking use of LAN connection along with the wired connection can help the cited firm. There are several types of threats that are linked with the use of POS system hence companies need to make sure that they apply effective mechanism so as to secure these data.

POS systems have been highly successful in integrating business information related to sales and transactional procedures hence they need to adopt the most advance POS systems needs to be used. LAN connections must be used inside the firm so as to ensure that higher speed can be achieved along with the security against data leakage. Use of Ethernet cables would be beneficial as it is cheap and high data security can be ensured. In order to protect system from security risks companies need to enable their system protection software to confront all these issues.

References

Burns, C. and Schwartz, L.J., (2011) Content sensitive point-of-sale system for interactive media. U.S. Patent Application 12/657,014.

D’angello, M. (2018) 7 essential POS system features for your retail business. [Online]. Available at: https://www.business.com/articles/essential-pos-features-retail-business/. [Accessed on 22^nd may 2018]

Dontigney, E., (2018) The advantages of Centralised Database storage [Online]. Available at: https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html. [Accessed on: 22^nd May 2018].

Duvall, R.W., Reece, M.J., Hrabosky, V.J. and Burton, D.J., NCR Corp, (2012) Methods and apparatus for managing sequencing of data received from devices in a retail point of sale system. U.S. Patent 8,239,271.

Expert market (2018) Expert Point-of-sale. [Online]. Available at: https://www.expertmarket.com/pos/pos-system-advantages. [Accessed on  22^nd May 2018].

Falzone, L. and Ciabarra, C., Revel Systems Inc, (2012) Point of sale system. U.S. Patent Application 13/227,397.

Greer, R.E. and Epting, T.W., Compucredit Intellectual Property Holdings Corp II, (2011) Point of sale purchase system. U.S. Patent 7,865,433.

Hongqiang, Z., (2011) The Application of 3G Technology at Electronic Point-of-sale System [J]. Value Engineering, 12, p.170.

Lee, J., Melnick, A., Yang, Z., Petkov, G.B., Tregan, L., Cemballi, G., Jain, B., Ahmed, G., Iannone, J., Rannala, E. and Sidana, A., (2011) Point-of-sale promotions. U.S. Patent 7,980,466.

Morandi, S., Marco, D.I.N.I., Sassano, M., Campari, P.P. and Fano, A.E., Accenture Global Services Ltd, (2015) Digital point-of-sale analyzer. U.S. Patent 9,135,491.

Polasik, M., Górka, J., Wilczewski, G., Kunkowski, J., Przenajkowska, K. and Tetkowska, N., (2012) June. Time efficiency of Point-of-Sale payment methods: Empirical results for cash, cards and mobile payments. In International Conference on Enterprise Information Systems (pp. 306-320). Springer, Berlin, Heidelberg.

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.

Szell, M., Lambiotte, R. and Thurner, S., (2010) Multirelational organization of large-scale social networks in an online world. Proceedings of the National Academy of Sciences, 107(31), pp.13636-13641.

Weber, L. and Bailey, K., Visa International Service Association, (2016) Dynamic point of sale system integrated with reader device. U.S. Patent 9,390,412.