Advantages and Disadvantages of POS system

Information technology is leading the businesses to the path of the success by providing new technology to the business which is actually simplifying the business process. The information technology is providing innovation to the businesses in various way. This innovation is resulting efficient data storing technique, faster execution of processes and effective distribution of information in the businesses.

This article particularly focuses on a specific innovation of information technology in the businesses which is the point-of-sale system or the POS system. A POS system simply is a combination of hardware and software which is used for accepting the payments from the customers for a general business transaction process (Rahman and Ripon 2014).

In this article advantages and disadvantages of POS system in business, advantages of the centralized system and how the POS system can be used for decision making will be evaluated. Also, some telecommunication options will be recommended for the POS system, and the risks related to the POS system will be evaluated.

The point-of-sale system or the POS system has various types of advantages in the businesses. The main advantage of the POS system is that by using this system, the owners of the business will be able to track the important business data extracted for the sales transaction immediately after the sale or at the point of sale. Tracking the sales data in real time eliminates the necessity of tracking this data manually (Scott 2016). The POS system automatically retrieves data from a real time sale and update the stocks according to the sales data. Also, it compiles the complete sales history.

Though the POS system has various type of advantages, it also has some type of disadvantages. The POS system is a web based system, so the POS become useless if there is no internet connection. The updates of the software in the POS system takes a long time to complete. In businesses specific tasks need to be completed in a specified time otherwise the businesses may encounter a loss for this (Sadgrove 2016). In such cases, the POS can be a big problem for the businesses if it stuck in the software update process. Also, POS systems have a high amount of service charge which lowers the net income of an organization.

The POS system provides competitive business advantages in the sales market because of improved efficiency, inventory management and for providing accurate reports. The POS system helps to improve the business efficiency by offering a good customer service (Zikmund et al. 2013). It helps to reduce the errors done by the cashier machines. Also, this system is fast compared to the traditional transaction system. A fast system gives the advantage of better customer service and also the served per hour is greatly increased.

Benefits of Centralized Database

The POS system is able to update the whole stock of the products according to the sales instantly which provides reliable information about the remaining stock. It helps to replenish the stocks at the right time. Also, this provides valuable information about the sales ratio. It becomes very much problematic to track this business data manually in an effective manner as the stock is not updated instantly with the sales record (Goldratt 2017).

The POS systems provide accurate and valuable information to the organization by keeping track of every outgoing and incoming product. This helps the management of the organization to determine whether the business is running in the right way or not. Advanced report generation from the POS machine gives the information about the present market trends and sessional trends. By analysing those, the organization can organizer the stocks according to the trends which will give a huge benefit to the organization (Edwards, Magee and Bassetti 2018).

The main advantages of the centralized databases are:

• The implementation of the centralized database maximize the data integrity and minimize the data redundancy. This makes the collected data accurate and reliable (Moniruzzaman and Hossain 2013).
• This centralized database includes a fault tolerance setup which preserves the internal data more precisely compared to another type of databases (Li and Manoharan 2013).
• The centralised databases imply a single database design which is easy to handle by an end user.
• Data administration and data portability are simplified in this type of centralised database system which is a major advantage of this type of system (Zheng et al. 2017).
• In the centralized database system the cost of labour charge, maintenance cost and the power supply costs are minimized compared to other types of databases.
• As the centralised database system uses only a single database, it is easy to make the required changes to the data, analysing the data and reorganizing the data. Also, this gives another benefit which is that all information is accessible from a single point of the location at the same time.
• High security is implemented for the centralized database system because all the important data is stored in a single location (Zaki 2014).
• Any updated data in the centralized database system immediately goes to every authenticated user of the database system.

Telecommunication process is an essential thing for the POS system to work perfectly as this POS system uses the cloud based service to store and update the database. To use the cloud based service POS system requires an internet connection. An internet connection can be provided to the POS system by three types of network configuration. This network connection are the MAN, LAN and WAN (Piotrowski et al. 2015)

In a LAN architecture group of computers connected together to exchange data among them. The LAN is used to connect a small group of the computer. In this case, the LAN connection can be used for connecting the POS terminal with the POS server. For this type of connection, the UDP protocol or the TCP/IP protocol followed as this is supported by the POS terminal. The MAN architecture is used to connect the computers and to share resources among a selected geographical area. The WAN architecture of telecommunication is the largest spread telecommunication method which spreads over a large geographical area.

For the given case a wired POS system should be enough to implement as this business is a small nursery business like the other small businesses and garden centres. In this case for connecting the LAN with the POS terminal, 4 twisted pair unshielded cable can be used. In this case of the given case study, wireless POS technologies can also be used. In a short range of area, the wireless technologies that can be used are the Bluetooth technology and the Wi-Fi technology.

Using POS System for Decision Making

The POS system has various types of advantages in the business field such as automatic database update of business information, but it also brings the various type of risks related to it. The main risks associated with the POS system are the security, privacy and the confidentiality.

• Security related risks: The hackers can use various type techniques to breach the security of the POS devices. In this cases, the hacker uses the vulnerabilities of the POS system. In many cases, the POS system lacks the hardware encryption system. In such cases, the attacker will easily get the access to the internal data of the POS system. Another case of this type of security related attack is the phishing attack. A phishing attack is carried by the spam emails which contains fake login page (Alsharnouby, Alaca and Chiasson 2015). When the victim login into the POS terminal through the fake webpage then the login info is captured by the attacker.

The businesses need to protect against this type of threats to run the business smoothly. To protect various type methods can be considered. Spam filters can be one of them to detect the phishing emails. Also, hardware layered encryption method can be used.

• Privacy related risks: Privacy related risks in the POS terminals is another big concern. The digital ID of the customers and the employees are captured by the POS terminals, but this is not fully protected by the POS system thus it opens a chance to the attackers to steal this privacy related data. Also, there is a case that wrong information is collected by this POS terminal which can create problems in the future cases for the customers. Collected data also can be used by the government agencies to track and monitor any individual who creates another privacy related issues (Wernke et al. 2014).

To protect the businesses against the privacy risks restrictive type of data permissions can be used. This can ensure that only selected numbers of persons to get access to the vital information of the business which can reduce the rate of privacy related data breach.

• Confidentiality related risks: Confidential information of the business or the organization is always the main target of the hackers (Tchernykh et al. 2016) In this cases, POS terminals can be hacked to access the confidential data which is transmitted by these devices such as payment information and transaction related information.

To protect businesses against this type of confidentiality issues, first confidential information must be identified then this information must be encrypted. The access of this encrypted data must be shared on a confidentiality agreement to ensure the data confidentiality of the POS terminal.

Conclusion:

From the above discussion, it can be concluded that the POS system in the businesses is a great technology to provide automation. This POS system can track the sale at the point and can update the inventory of the businesses according to it. This technology eliminates the manual tracking and update of the business system which also eliminates the human related errors in the business field. Beside this advantages, the POS system also has many types of disadvantages also which is dictated in this article. The telecommunication method of the POS system is also described in this article. With major benefits to the business, this POS system also brings the various type of risks in the businesses. Three types of major risks are discussed in this article, and the potential solution of this risk is also assessed in this discussion.

References:

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