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POS System-Blooming with Technology

FACULTY OF HIGHER EDUCATION

Individual Assignment

HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION Impact of IT on Business

1500 - 2000 words worth 25%

HC1041 IT for Business - Trimester 1


Individual Assignment Requirements

Read the case study and answer the following questions:

1) What are the advantages and disadvantages of the new POS system?
2) How will this POS system help the business gain competitive advantages? 3) What are the advantages of having a centralised database?
4) How could this POS system facilitate decision making?
Address the following points:

  • Why do point-of-sale systems process business activities more effectively?
  • Can the information be tracked manually in an effective manner? Why or why not?
  •  What types of questions could be answered effectively?
  • How could the information be used to better manage the business?
    5) Recommend telecommunication options for this POS system Address the following points:
  • Types of networks – LAN, WAN or MAN?
  • Types of media? --Wired or wireless technologies? Which types of cables should
    be used for wired technologies? Which types of wireless technologies?
    6) What type of risks does the POS system bring and how to protect the business against the risks?
    Address the following points:
    Security
    Privacy
    Confidentiality
    Your report will be assessed on the quality of your research and quality of report. Discussion must be relevant to the case study business. Your report is to be in the style of a business report.


Case study -- Blooming with Technology

The use of information technology is needed by every industry size and type of business. Small businesses can realize the positive effects through adopting technology. However, small businesses often do not have the resources and expertise of large corporations to implement information technology strategies. However, the benefits of technology for small and medium-sized enterprises (SMEs) are just as crucial to business operations and strategy.

Consider Four Seasons Greenhouse and Nursery, located in Colorado. This small nursery was like many other small businesses and garden centers. They used manual registers to track and maintain its inventory as well as determine which products were realizing the most profit. The profits from the nursery were either "negligible" or a loss. They did not have access to useful operational data to effectively manage their business. For example, they did not track or review the margins of individual products. However, they believed that they needed to do something different for their $1M business operation.

Enter a new point-of-sale system (POS) in 2008. The system allowed the owners to track useful business data from the sales transactions immediately at the time of the sale; eliminating the need for tracking sales manually. The system processes and stores data from the sale while updating the inventory as well as compiling a sales history. This eliminates reliance on manual entry of sales transactions and reduction of inventory units for the items sold. POS systems provide much more than a cash register. These systems provide more robust functionality in inputting, tracking, and distributing data to provide useful information to operate and manage the business.

Accurate inventory data maintained by the POS helped with decision making. Decisions on how many units of a product to order were no longer based on speculation about current inventory units. Now, accurate inventory counts eliminate the guesswork on how much to order, helping the business to operate on leaner inventory units. The system's reporting can provide the detail transactions for an inventory item, such as how many were purchased, discarded, and sold.

The implementation of a POS system also confirmed that the owners did not know as much about their business as they thought they did. As they reviewed reports from the new system, they saw that some products were less profitable than they thought. The more detailed cost reporting by item helped them to understand which products contributed the most profit to the operation. Their new perspective of the "real costs" provided the opportunity to shift production to the higher-profit items, thereby gaining more profit. Prior to implementing the POS system, they simply did not have the time to approach this level of decision making.

Knowledge of their detailed product costs helps them to price products more profitably. Price changes can be implemented temporarily (for a promotion) or permanently and still remain within acceptable product margins. The accurate and timely reporting of this information assists them to be more effective managers of their business operations. The ability of the system to process sales, inventory, and purchasing transactions immediately reduces the need for data entry of paper information. The time savings can be used for managing the business rather than mundane clerical functions.

The new system has expanded Four Seasons' management control over employee schedules to review and allocate labour expenses to specific departments and functions. An additional benefit allows the owners to delegate more responsibility to the staff and establish accountability. Instead of the owners establishing goals, they provide the system's data and ask staff to submit their sales goals for the next reporting period. Ultimately, the information technology system creates a solid infrastructure to process and report the businesses operations for the entire enterprise.

The garden centre is an excellent example of how technology can realize benefits for a business. The ability for organizations to remain competitive and agile is crucial. These systems allow organizations large and small to leverage business data to gain a competitive advantage and operational efficiency.

Answer

POS Systems

Case Study Analysis:


Summary

In this age of technology, point of sale system (POS) system has been recognized as the central component of business. The relevance of this hardware-software component to the daily transactions and operations has been acknowledged by most business. Through the present report, this technology in the context of the small and medium enterprise is studied, 

Consider Four Seasons Greenhouse and Nursery, located in Colorado. This small nursery was like many other small businesses and garden centers. They used manual registers to track and maintain its inventory as well as determine which products were realizing the most profit. The profits from the nursery were either "negligible" or a loss. They did not have access to useful operational data to effectively manage their business. For example, they did not track or review the margins of individual products. However, they believed that they needed to do something different for their $1M business operation.

The report is divided into six sections each focused on the functions and attributes of the POS systems. Through the first section the advantages, such as simplification of operations, as well disadvantages ranging from the technical challenges amongst others are discussed. The second section explains about the benefits gained from the POS system in this competitive world. The subsequent sections explain about the relevance of centralized data and how its remuneration can be gained from POS systems. The report also studies the decision making criteria for selecting and using POS systems for small and medium enterprises.

The fifth section of the report further explains about the telecommunication network that can be used in order to use POS system. In this sense, the application aspects of the operations are justified for this system, and measures to reduce security and privacy issues are discussed. The report shows various positive attributes of the POS systems which can help small and medium enterprises to compete with each other with respect to profit and operations. Mean while, through the security concerns, the individual challenges of the businesses in using the technology, and the reasons for their limited competitive growth is also addressed. In this sense, this report functions as a comprehensive decision making tool for the business owners that are contemplating the use of POS in their business operations.

What are the advantages and disadvantages of the new POS Systems?

Advantage 

Technology is an irreplaceable part of the modern world. It is very important for everyone to be aware about varied technology and Information technology in their respective fields to ensure competitive sustainability. Through the daily use of technology one can always enhance their growth and innovate at one point. You get rid of paperwork related to calculating sales and managing inventory. That saves a plenty of time and minimizes mistakes that can be done during calculations. You can also monitor the activity of your employees, manage client base and analyze which products are sold better and when. It is faster than the old cash register system. (Shrestha, 2017)


Disadvantage: 

POS systems are costlier than the old cash register.  POS system can’t be used for payroll, worker data, record-keeping and other normal business operations.  Reliable Internet connection and ISP are required to maintain a POS system. (Qy, 2017)


How will this POS system help the business gain competitive advantages?  

A competitive advantage is basically just a condition which enables a company to operate in a more efficient or otherwise higher-quality manner than the companies it competes with, and which results in benefits accruing to that company. 

  1. Businesses determine competitive strategies
  2. Create processes to achieve strategies
  3. Information systems developed to support business processes
  4. Help organizations achieve competitive advantage
  5. Need to avoid creating systems that are unrelated to organization’s strategy

What are the advantages of having a centralised database?  

A centralized database system is a system that keeps the data in one single database at one single location. In a centralized database system, a single machine called a database server hosts the DBMS and the database. One window for every problem always fits for varied field. Thus, it is always important to have centralized database so as to understand the efficiency of the enterprises. Simply known as the centralized database is that data located at a single site and it is much easier to manage and maintain. The centralized database helps in understanding about the stock of the products such as which products to order, how many got sold, and which gives benefits to the store. This is another task that is easier to monitor to validate the database. Database changes that must be incorporated in the code in the scripts is easier through centralized systems.

It has manageability, portability, upgrades, backups etc.It also helps in better understanding about the marketing strategy and also about the profitable business as it shows which product gives more profit the store, thus by pricing the products within the profit margin. It also helps in better analyzing the products and stocks from the detailed report about the sales transaction. Therefore, it is always advantageous to have centralized data.


How could this POS system facilitate decision making?  

Point of sale systems is able to track beneficial information immediately the point of the sale. This can be from ordering diminishing stock to identifying best sellers. This can be done manually but not as effectively from a time management standpoint. It is very important for employees and owner to understand and be accurate about everything happening in their store regarding their products, sales and orders. It gets very difficult for owner to supervise, when these all things are managed by manual register and manual entering of data, which is very tedious as well as complicated. Thus it gets difficult for owner to reach the level of decision making process in the store. Therefore POS systems solve this problem very easily by giving every possible solution for making decisions.

 It gets very simple to track and update the records for easy understanding of availability of products, costing and pricing of products and also understanding the schedule of employees, which is then useful for making decision about the products as well as employees. The decision includes what kind of responsibility will be assigned to which employee, what types of changes needs to be done in order to make business profitable, what variety of products needs to be continue for selling etc. (Gabrys, 2006)


Recommend telecommunication options for this POS system

LAN  : POS system runs on Local Area Networks which are privately-owned networks to run Retail shops and small business entities within a single building in small area. Since it is having advantages of controlled in size, fast data communication, easy to manage the network many POS  systems are well designed to run on Local Area Networks. LAN is most cost effective setup compare to other network types.

WAN : POS system which runs on Multi branch and multi locations that spans a large geographical area ,A wide area network (WAN) technology is involved to manage the show. Multiple different smaller local area networks (LANs) connected widely, to form a WAN network. (sahajwani, 2014)

Traditional WANs based POS systems are used in banks and big retail stores. The WAN setups are expensive to manage and complex infrastructures involving high end network hardware like routers, controllers, firewalls and other network components. To connect all the branches, which are widely spread a expensive connectivity service also increase the cost to the user. (sahajwani, 2014)

MAN: when any business spread within a Metropolitan Area with multi branch and multi location, a POS system with Metropolitan Area Network works best in this circumstance. Universities and multi branch school campuses or multiple retail shops with in Metropolitan Area are best client example for MAN based POS system. Man is always larger than a LAN and smaller than a WAN .(quorion, 2000)

Copper cable: There are various kinds of telecommunication components which affect the POS system operations, such as: telecommunication networks, telecommunication equipment, software etc. These instruments support, and helps the process of gaining and using information that are connected with the network. 


What type of risks does the POS system bring and how to protect the business against the risks?

Security :POS have made many technology improvements to their models over the past couple of years, such as adding e-commerce and allowing for transactions. But these are high-bandwidth workloads that end up straining your network. Simply adjusting your Internet speed is not going to be enough and sometimes going that route can be costly; add more complexity and more security requirements to your infrastructure than necessary.

The most common POS problems come from a network that isn’t secure. Hackers can infiltrate these weak setups and steal information, such as customer credit card numbers and business account data.  

Privacy :Privacy is very important to the POS industry and POS users. Many POS systems contain personal information of the system i.e name, address, zip, mobile number, credit card info, in-store video monitoring, in-store beacon monitoring and it continues to grow. You privacy has been under constant attack since the Internet was released to the masses. Pre-web privacy violations came in the form of audio/video recording, photographs, phone "bugs" and other physical tracking activities (think private investigator). But today privacy is much easier to invade; spyware, server hacks, public video surveillance and browsing activity reports are all used to gain access to your personal information and activities without being near you at all.

Confidentiality : Confidentiality is also very important to the POS industry and POS users. Protects PoS machines running Windows operating systems from malware and external threats.






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