Advantages And Disadvantages Of POS System For Business

Benefits of using a centralised database

1). Advantages and disadvantages of point of sale

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Point of sale system has various advantages and disadvantages associated with it.


The major advantages of these systems are:

  • It helps the owners to monitor their sales record at the same time when the product is sold in the market.
  • Point of sale also helps in compiling all the sales history to design better plans.
  • It is beneficial as it helps in updating inventory of sale at instant time
  • It stores huge amount of data by consuming small section of memory.
  • It is useful as it supports remote functionality for storing, distributing ad tracking all the important data (Szell,  Lambiotte and Thurner, 2010).
  • It is helpful in making decision related to management of sales and removes the confusion in making decisions.
  • It helps the business to operate effectively as it makes all the functions to operate automatically.
  • The detail analysis of a business could be done using point of sale system that helps in understanding the market in a précised manner (Szell,  Lambiotte and Thurner, 2010).
  • It saves the overall cost and time needed to manage the data packets.
  • It adds up transparency in the network.


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  • If point of sale system is used as software it need to be updated periodically as overall performance of business is dependent on it. It requires lot of efforts and cost to keep the software up to date.
  • There are high risks of security threats as it stores sensitive data of organisations. If the system is accessed by some unauthorized user it may lead to violation of confidentiality (Tseng,  Lee and Tseng, 2015).

2). POS helps in gaining competitive advantage

It is true that point of sale is gaining advantage in the competitive world.  They are helpful in business to make decisions in an effective way. The data provided by these systems are very précised that helps in analysing the business from all perspective and help to design plans so that better growth could be achieved. The detailed information provided helps the business to gain advantage in the market (Lucchi,  et. al, 2014). Additionally, point of sale helps in analysing the reason behind the profit to the business so that products and services are provided in the same manner. It also helps the business by providing alerts about shortage of some products that so plan could be modifies accordingly. It is beneficial in term of inventory management as it helps in boosting up the profit of the company by controlling all the possible sources. It is also beneficial for a business as it controls the financial data that is necessary for the business to compete with other competitors (Berezina, et. al, 2016).

3). Benefits of using centralised database

Centralized database system is a group of all related databases at a single location. It is very useful as it improves the performance of the system and enhances the speed of processing. Centralised database offer many advantages to small firms as well as bigger firms (Jindal, Zhu,  Chintagunta and Dhar, 2018). Some of the advantages of centralised database are:

  • The storing all the information at one place it reduces the efforts of updating the database at time of changes and it also reduces the redundancy of data packets.
  • Centralised database system is more secure as data is not stored at scattered location which reduces the chances of attack.
  • Centralised database is beneficial as it offers ease to access the data at any time (Jindal, Zhu,  Chintagunta and Dhar, 2018). As the data is stored at one place the information is made available to the end user at the same time the information is generated. This helps in making faster decisions.
  • It also becomes flexible for administrator to manage the database and portability of data packets.
  • It is nominal in terms of cost as all the data is stored at single location thus less number of resources are required for protecting the data packets.
  • It is easy to update and make changes in the data.

4). POS system facilities decision making power

Point of sale system makes the large amount of data available to end users instantly. The availability of data packets immediately helps in making better decisions. Additionally, it is beneficial as point of sale helps in making data driven decisions that promotes the business to gain competitive advantage. In a business point of sale system properly monitors and tracks all the transactions thus it provide accurate data related to profit and revenue margins. This data could be very useful for a business to design the plans and attain better growth. Analysing the business in detail manner helps in making decisions regarding the discount plans (Rese, Schreiber and Baier, 2014). Offers and discounts plans are designed according to the analysis of data. The data gained by point of sale system could also be used to improving the customer experience by enhancing the back office operations. Thus it can be clearly stated that point of sale system assists in taking more knowledgeable and evaluated decisions. This helps in making customized decisions by looking at the marketing needs. It also assists the process of evaluating the data as it is a crucial part for making highly competitive decisions. This helps in aiming towards the loop holes that is present in the sales. By using the analysis loopholes could be removed by promoting better services (Lifewire, 2018). The detail knowledge help in deciding which products need to be promoted and what need to be done to achieve higher benefits.

How POS system can help with decision-making

POS systems process business activities more effectively

Point of sale system has helped the businesses to work effectively as it has eliminated all the manual work by making it automatic. Data manipulation and modification is done using point of sale system that helps in generating immediate result (Dontigney, 2018). This helps the business to visual the actual scenario so that plans could be designed in a better way. It helps in making the business activities automatic rather than doing manual work. These activities could be done by using manual strategies but it isn’t powerful from the perspective of time administration. It gives the detailed knowledge about the demand of customer (Gomzin, 2014).

Tracking information through manual methods

Information could be tracked using manual methods but that is time consuming process which is not considered to be efficient for modern business. By tracking the information using manual method there are chances of data getting misinterpreted which may lead to wrong decisions. Manual methods require lot of human efforts and still result in confusing results which are not appropriate (Norp, Kips and Van Loon, 2015). Thus to make sure that there is no confusion and appropriate actions are taken for making decisions manual methods should not be used. In the modern days decisions are made based on the real time data which cannot be implemented by the use of manual tracking.

Type of questions that could be answered

There are varieties of questions that need to be answered with the use of data that is availed through point of sale system. It helps the business by understanding all the marketing and sales operations so that they analyse the business in a better way (Shang, Huang and Chaloupka, 2015).  Apart from this there are various queries related to the customers so that valuable information is gathered for the company at the time of decision making. Point of sale helps the business in knowing the market demands, customer’s response and variety of things.

Point of sale helps in managing the business 

Point of sale helps in managing the business in a better way as it collects the information that is important. The information gathered using this system helps in focusing on the essential areas which would be profitable for the business. Point of sale system helps in making decisions that would be better for the organisation and the analysis of data could be used for making changes in the system (Shang, Huang and Chaloupka, 2015). It makes use of data driven approach that helps the business in managing the activities is a better way.

Telecommunication media for point of sale system

There are various telecommunications options available for a business. It is important to select the best telecommunication option to cover all the requirement of an organisation. The option of telecommunication network depends on the type of network and media they must use (Jones, et. al, 2012). Telecommunication network can be segregated in terms of type of network or in terms of type of media.

POS systems process business activities more effectively

Telecommunication networks

There are various networks that could be chosen it depends on the type of business. If it is small firm then LAN networks could be used as they offer higher speed of connectivity. It also makes cost friendly as it makes use of minimum resources which is considered as a beneficial for smaller companies (Armentrout, Hargett  and Maximilien, 2011). The business is expanded in various countries than WAN need to be used for efficient communication. So, that employees are able to communicate and discuss anything from anywhere at any time.

Type of telecommunication media

The media of connection can be wired or wireless. Wired communication has high speed and they are more secure as compared to wireless technology. In case of point of sale system Ethernet cables are used (B2C, 2018). Wired media is difficult to implement as connections need to be implemented.

Risk associated in point of sale system

There are various risk associated in using point of sale system. It is important to protect the business from these risks; this could be den by using various strategies. The most common type of risk that occurs in the system is due to security, privacy and confidentiality loss of data. Discussing these risks in detail:

  • Security-Most of the sensitive information of an organisation is stored on point of sale system. It is important to secure the data to build trust among employees. If the information is not secure on the system it would lead to serious problems. If the data is accessed by some third party user it would lead to loss of trust among stakeholders and this would act as a hurdle in growth of a company (B2C, 2018). Thus various ways need to be used to secure the data like by providing proper access control, encryption of data and software for proper authentication need to be used.
  • Privacy- Point of sale system stores collection of sensitive data. It is necessary for a business to manage the privacy as all the organisations are dependent on the data stores on the system (McCarthy, 2018). If some unauthorised users access the data it degrades the performance of the business.
  • Confidentiality- Using point of sale system there are chances of data leakage that would led to violation of confidentiality (Alexander, et. al, 2017). Important information of cards is stored on the system which could not be leaked to any users otherwise it would be a critical situation. The confidentiality of system could be maintained by using firewalls.


It can be concluded from the report that that point of sale system offers various advantages and disadvantages. It is beneficial for every business as it helps in making better decisions, improves the efficiency of work by eliminating the manual work. The use of centralised database has also been discussed as how it is flexible for customers to access the information. Point of sale system also makes use of various telecommunication network and media that depend on the business. It offers various benefits but still there are security, confidentiality and privacy risk associated with this type of system.

Point of sale is the emerging trend in the market. The use of this technology has increased in every field. Point of sale is turned to be very beneficial for business that works at different places. There are various benefits and drawbacks associated with this technology. In this report point of sale system has been analysed from different aspects. Along of that need of centralized database system and the risk associated with POS have been discussed briefly.


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