Potential Risks Associated With the Application of Point of Sale Technology-Based Systems - Coursework Example

?Supply Chain: Technology Guide By Table of Contents This is a research based report that presents a detailed analysis of some of the important aspects of the new technology based Point of Sales systems. This report presents an insight into the application and contribution of point of sales system in the supply chain management areas. In this scenario, this report outlines the major advantages of POS technology and potential contributions in the functions of an organization. This report also outlines some of the potential risks associated with the application of POS technology based systems. Introduction Point of Sale (or simply POS) systems allow the business organizations to correctly and professionally run and manage their business policies and strategies at the store level. Such kind of sale systems offers an excellent support and the capability to our retail personnel to have access to the data they need to carry out business activities effectively at each location as well as across each business channel. Additionally, this new technology based solution as well allows us to avoid loss and risks. These systems also help us increase profits of our bottom line business areas. In view of the fact that the POS systems are significant to retailers' success, however a wide variety of aspects are not able to professionally manage the complexity and scale of different channels, continually altering pricing strategies and complex promotions. In addition, POS systems improve corporate wide visibility and pricing margins into inventory levels as well as provide the staff members with simple cross-channel access to client data and order details (POSmatic, Inc., 2012; Rouse, 2011). Moreover, the POS systems allow much faster checkouts which increase client trust. Such systems are able to offer a centralized return validation to reduce business fraud. These systems are also able to reduce cashier error for lower reduction operating costs as well as superior margins. These systems also reduced cashier observation needs resulting in increased management that ultimately enhanced business productivity (POSmatic, Inc., 2012; Rouse, 2011). This report presents a detailed analysis of point of sales systems. This report will discuss the working of POS systems. This report will also outline some of the advantages and disadvantages of these systems. An Overview of Point of Sale (POS) systems As discussed above, the POS (Point of sale) is a software application that business retailers utilize to compute and manage sales and handle cash drawer. In other words, POS is a new technology based computerized and automated cash register. Basically, the POS application adds up the transactions total, computes the change back, computes state sales tax and makes computerized adjustments to business store's supply levels to debit the quantity of inventory sold. In view of the fact that the POS software packages can differ significantly in various aspects as a result the experienced and knowledgeable business retailers will need to evaluate their own circumstances and requirements before deciding to implement a POS system. Additionally, the inventory management capabilities required to manage and handle any multi store chain are almost certainly overload for a single shop. As a minimum, a POS system manages inventory database, sales, offers us an excellent support for querying our business inventory as well as sales database in an elastic way (Harmon, 2012; USLegal, Inc., 2012). Without a doubt, at the present data storage has become inexpensive and affordable, hence our POS application should be able to record and track the date time of each sale business transaction performed at our business store. In this scenario, this data would be useful for a wide variety of analytical jobs. For example, this data can be used to determine various facts such as: are business transactions increasing for some specific soap due to some publicity campaign? In view of the fact that the majority of unpredicted items become 'seasonal', thus our POS application must allow us to assess what demands are probable to be. Additionally, if we are going to purchase our initial POS system, it is essential to check that is it capable to export our details in a universal format. In addition, we should acquire our new POS system from a business that has a practically established history as well as predictable future. On the other hand some low quality systems can start garbling our information or breaks down data and cause huge unplanned for operating expense. Moreover, a poorly designed or simply ill-suited point of sale system can be a daily management headache; a good one that fits well with our business can be our most valuable 'employee' (Harmon, 2012; USLegal, Inc., 2012). Point of Sale (POS) Technology The term POS is frequently used in relation to the software and hardware for checkouts. However, POS systems are very much feasible and helpful in locations where we have wireless supported systems or network wired with TCP/IP communication protocol. In fact, POS systems made huge progress from the mechanical cash registers those were only automated system for shop management in 1st half of the twentieth century. In this scenario, some of the well-known instances of a similar kind of cash registers were the NCR models those were functioned through a crank, and the lower functional Burroughs registers. These mechanical registers were used to record data on business journal tapes and paper tapes and required us to perform additional steps to record the data into the retailer's accounting and business management arrangement. In this scenario, the apparent subsequent level of development of the point of sale systems was to change the mechanical working systems into electrical systems. NCR-Class-5 POS model is well-known instance of similar kind of register. In 1973, innovative registers that were implemented through computers were initiated for the purpose of store sales management such as the IBM 3653 Store System and the NCR 2150 system (POSmatic, Inc., 2012). At the present, we have modern technology based POS systems, for instance wireless POS systems, which not simply permit us for mobile payment management but also facilitate in restaurant business, they as well provide us with the servers processing of all the orders of the tables. In fact, currently the POS systems are conceded as the classiest, enhanced, and powerful and user friendly computer networks in business practice. Actually, the majority of POS Systems carry out a great deal more jobs than just Point of Sale jobs. Even for the lesser tier 4 and 5 retailers, there are POS systems available that comprise a wide variety of functions such as completely integrated inventory management and tracking, accounting, CRM services, open to purchase forecasting, rental services, service administration, process reporting and payroll modules and services. Without a doubt, these all services make a POS system very useful and effective for any business. Though, all of these characteristics and utilities are accessible, one will normally hear different terms being employed when referring to a specific point of sale system. The terms which are used for POS system comprise: retail management software, multi-location management system, Point of Sale (POS) software and business management software (POSmatic, Inc., 2012). Features and Utilities This section outlines some of the important features of point of sale systems. In this section I will discuss a variety of aspects that make a POS system very useful and effective for any business of the store: Ease of Use The POS system is very easy to use for the management of complex retail operations. These systems are very effective for managing and controlling the business daily tasks and services (Entrepreneur Media, Inc., 2012). Entry of sales information The majority of POS systems allow us to enter inventory codes either automatically or physically by means of a bar code scanner system. Once the stock bar code is entered, the POS systems call up the sales or standard price of product, calculate the items cost at specific amount and offer us a running total of shopping. In addition, a large number of POS systems make it simple to enter sales amounts by hand when required by facilitating us to search for inventory bar codes based on limited products amount, depictions, vendor or manufacturing code (Entrepreneur Media, Inc., 2012). Pricing POS systems normally offer us a wide variety of methods to manage and handle business pricing, comprising percentage of price, add-on quantities, margin proportion and custom formulas for product sales management. For instance, if we want to offer volume discounts, we are able to set up various prices for every item (Entrepreneur Media, Inc., 2012). Revising Product Details POS systems also provide an excellent support for managing and revising product details. In addition, POS systems allow us to add and update business inventory and accounts receivable records (Entrepreneur Media, Inc., 2012). Sales tracking options Different companies use in different ways. For instance, service or repair shops frequently keep business invoices open in anticipation of the task is finished; consequently they require a system that permits them to perform sales related operations in abeyance. In addition, if we sell costly products and allow our customers to pay in installments then we might welcome a business loan calculator that schedules monthly payments. In the same way, if we present rent-to-own products, we will desire a system that is able to manage rentals and sales (Entrepreneur Media, Inc., 2012). Security In retail business, it is really significant to keep an eye on management functions and strict control over cash payments and receipts to avoid breach or theft. In this scenario, the majority of such POS systems contain effective security mechanisms and audit trails support to avoid such issues (Entrepreneur Media, Inc., 2012). Taxes  The majority of POS systems support many tax rates which are helpful in case when we run a mail order company and want to sign a contract for taxes for more than one state. In such scenario POS systems are very helpful for running and managing a business (Entrepreneur Media, Inc., 2012). Point of Sale Hardware Interface Standardization A number of schemes to standardize development of new technology based computerized POS Systems have been formulated to ease interconnecting point of sales systems. In this scenario, JavaPOS and OPOS are two of the most important strategies. These both strategies are aimed at meeting the requirements of the Unified-POS international standard that is a standard developed by The National Retail Foundation (POSmatic, Inc., 2012). In addition, OLE for Point of Sale (OPOS) was the initial normally accepted standard and was established by NCR Corporation, Microsoft, Fujitsu ICL and Epson. In this scenario, OLE for POS is a COM-based user handling interface well-matched with all "COM supported programming languages for Microsoft Windows systems. It was developed and released in 1996; however, it is at the present available in many POS system standardizations. On the other hand, IBM also released a standard known as JavaPOS was the initial release to the community in the year 1999. As the name indicates JavaPOS is intended for Java while OPOS is intended for Microsoft Windows and as a result frequently platform independent (POSmatic, Inc., 2012). Point of Sale (POS) Communication Protocols There are numerous communication protocols employed by POS systems to deal with their associated peripherals. Hence, because of such inter connectivity nature of POS Systems, the majority point of sale peripherals, for example printers and touch screen displays facilitate numerous command protocols in an attempt to work with a variety of diverse brands of POS Computers and Terminals (POSmatic, Inc., 2012; Entrepreneur Media, Inc., 2012). In addition, the basic objective of these protocols is to make better management and arrangement to effectively control the system functions. Additionally, the main idea is to improve the functionality of system tasks and procedures. These all aspects lead to a great deal of better support for formulating POS functionality in greater corporate interest (POSmatic, Inc., 2012; Entrepreneur Media, Inc., 2012). POS Technology Integration Nowadays, POS application is as simply superior as its incorporation with the numerous well known applications and services. In this scenario, the instances of similar applications would be statistical and accounting programs, where all of everyday tasks and dealings would be automatically imported into statistical and accounting programs without some hard work at the system user's end. Additionally, the basic purpose of all these applications is to provide an excellent support for the management of functions and tasks such as business decision making and management (POSmatic, Inc., 2012; Entrepreneur Media, Inc., 2012). In fact, with the successful appreciation of web based shopping arrangement, numerous companies are selecting to function online and off line. Because of profitable marketplace and the global experience without starting a physical store, a large number of sellers are yet selling entirely using a web based arrangement. Hence, for these businesses that use both kinds of business environments, it is very important that they both are in synchronization. That's where POS Integration with an e-commerce Storefront turns out to be something that is of a need. Though similar solutions are not extensively accessible yet, a number of points of sales applications developers are initiating to build similar products. In this scenario, one of the similar applications is Onsight POS system developed by POSmatic Inc (POSmatic, Inc., 2012; Entrepreneur Media, Inc., 2012). Point of Sale system future direction In this section I will discuss the POS systems’ future directions and uses. In future POS systems are expected to be a more powerful software application for the retail industries and hospitality businesses. In addition, with the capability to manage virtually, flexibility and installation to handle any kind of business, future of POS systems is the software for everybody (Future POS, Inc., 2011). I have outlined below some of the future directions of the POS systems: Biometrics This technology has previously been employed by a number of retailers for logging into POS application and for clients’ usage for self checkouts. Additionally, the biometric technology offers a technique of recognition by assessing exclusive human features as a way to verify identity. In addition, the biometric technology associated with the POS technology minimizes the chances of theft as others are not allowed to make use of a particular cash register yet they have scanned and recognized their fingerprint. Hence, it will offer an excellent support for business and retail shops (Haefner, 2011). RFID (Radio Frequency Identification) Radio Frequency Identification (RFID) is a new age technology that is known as the future POS technology. Basically, it makes use of systems linked objects that broadcast information to an RFID supported receiver. Additionally, it is an optional technology to the bar coding technology based systems. Some of the important benefits of RFID comprise high data facility, write/read support and no line of sight necessities. One more benefit of RFID tags is that they can be fixed inside packages. In addition, depending on the kind of tag and system, they are able to as well be read at a changeable variety of distances (Haefner, 2011). Self Checkouts This technique of POS systems is previously utilized by a large number of retailers. This technology with self-scanning checkout fundamentally has the client performing the task of the earlier cashier. In this scenario, clients scan their own products, swipe their personal credit cards and bag their products, typically beneath the alert eye of a store worker (Haefner, 2011). Digital Signage It is observed that high loads of retailers as well as other complex business services caught the attention of business people toward the technology of digital signage to express a promotion, draw attention or promote a specific brand. These POS systems are previously being adopted by retailers of all sizes and kinds. In fact, the digital signage is a very useful business marketing tool as it allows a retailer to simply alter signs to recognize a present marketing advertising or a discount on a product that requires clearing out. In addition, the digital signage technology based systems can be programmed with time of the year as well as help the retailer accomplish flexibility in what message they would want to express (Haefner, 2011). Advanced CRM Customer relationship marketing is extremely significant to keep customers happy and to keep them coming back to business services. According to various researches, it is 5 times more expensive to trade to a new client as compared to get sale of an existing one. In this scenario, with the customer relationship marketing tools that are extensively becoming available on many points of sales, are able to facilitate us keep in touch with our new and old clients (Haefner, 2011). Weaknesses of POS Technology A POS technology based system allows us to manage a wide variety of businesses such as inventory, restaurant, bookkeeping, etc. In fact, by investing in the adoption of a new technology based system of POS technology can save a lot of money in numerous areas and offer us a number of benefits regarding daily transaction management. In view of the fact that the POS systems for restaurants need numerous protections and are subject to crashing, similar to some computer application. Thus, many small businesses like restaurants do not actually require a point of sales system, particularly if they do not accept credit cards (Mealey, 2010; Krawetz, 2007). The most noticeable weakness or drawback of any point of sales system is that it is a computer based system, and subjects to all the similar technological whims. Thus, if it crashes and we do not have a backup of business data, then we risk of losing all our information and data, not immediately deals, however profit as well as loss statements and payroll reports (Mealey, 2012). Case Study POSmatic  In this section I will discuss a case study to demonstrate the application and development of POS technology. POSmatic business presents e-commerce technology based systems for all kinds of businesses (small, medium or large). POSmatic technology based systems are completely modified to outfit our company model, requirements and most significantly come under our company budget (POSmatic, Inc., 2012). In addition, POSmatic systems offered the POS Integration with the web based platform. The POSmatic E-Commerce technology based system works in a comprehensive way; with completely integrated ONsight POS applicator to offer us a reasonable e-commerce technology based systems that are able to have sold on our products on the web rapidly as well as securely (POSmatic, Inc., 2012). Moreover, POSmatic e-commerce technology supported POS system is presently offering a number of cutting-edge functionalities that put it right up there with million-dollar e-commerce business like Dell Corporation or Amazon.com. POSmatic e-commerce technology supported POS system comprise protected credit card processing in a real-time environment with fraud protection, higher shopping cart characteristics and item matrix, shipment tracking and order status (POSmatic, Inc., 2012). Technology Application Risks POS systems, where customers’ debit or credit cards are swiped for payment, are one of the most commonly used computing applications in the developed world. They are as well targeted extensile by hackers and criminals. For example, in the year 2005 technology hacker compromised POS systems at Marshall’s retail store and stole customers’ credit card information. In the same year, technology hackers also stole Wal-Mart's custom built point of sales system’s source code. In this case no client data was stolen; however it is an apparent sign that criminals keep a bull's-eye on point of sales systems (Alexandria Computers, LLC., 2012; Shipley, 2009). So we can say that application of such POS systems is turning out to be a security issue and risk for many businesses. In this scenario we can tackle such issues through application of some effective solutions and mechanisms to better address such issues. Conclusion This paper has presented a detailed analysis of POS systems. These systems allow the business organizations to correctly and professionally run and manage their business policies and strategies at the store level. Additionally, this kind of sale systems offers an excellent support and the capability to our retail personnel to have access to the data they need to carry out business activities effectively at each location as well as across each business channel. Basically, the POS system is a software application that business retailers utilize to compute and manage sales and handle cash drawer. In this report, I have presented a detailed analysis of some of the important aspects of the POS technology. This report has highlighted some of the fundamental aspects of POS technology based systems. In this scenario, I have outlined how Point of Sales systems are helpful and supportive for supply chain management areas. This report has discussed the advantages of POS systems and their contribution to the supply chain management operations. References Alexandria Computers, LLC., 2012. Pros and Cons of POS system. [Online] Available at: http://www.alexandriacomputers.com/Pros-and-Cons-of-POS-system-aid4 [Accessed 04 September 2012]. Entrepreneur Media, Inc., 2012. Point of Sale (POS) System. [Online] Available at: http://www.entrepreneur.com/encyclopedia/term/82360.html [Accessed 04 September 2012]. Future POS, Inc., 2011. Future POS Point of Sale Software. [Online] Available at: http://web.futurepos.com/ [Accessed 04 September 2012]. Haefner, J., 2011. "Top 5 Future POS Software Technologies". [Online] Available at: http://www.possoftwareguide.com/articles/future-pos-software.html [Accessed 30 August 2012]. Harmon, J., 2012. What is Point of Sale Software? [Online] Available at: http://www.wisegeek.com/what-is-point-of-sale-software.htm [Accessed 02 September 2012]. Krawetz, N., 2007. 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