HC1041 Information Technology for Business: Case Study of FSGN

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. 

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. 

Introduction 

The study talks about the Impact of Information Technology on business. Taking the example of a SME named Four Seasons Greenhouse and Nursery (FSGN), in Colorado the study is analysed. The advantages and disadvantages of the newly included POS systems in the company have been discussed. The competitive advantage that the SME will gain after the inclusion of this POS System has also been analysed. The advantages of having a single database which can access by multiple people and its importance in making better decisions have been discussed. A recommendation for telecommunication options that shall help in the proper management of the POS systems has also been talked about. The various security, privacy and confidentiality risks that the company faces and the ways to overcome those risks have also been talked about.

Findings and Analysis

Advantages and disadvantages of the newly included POS system the company 

Advantages:

Point of sale system can be integrated in the process of inventory control for a particular business house. It generates purchase order automatically and can help to make reorders for different items. It can help to decrease the work amount with expenses related to the running of business. Additionally, product selection report is easily accessible in this method as in a venture; there is no need to give focus on the selling amount. As suggested by Benjamin (2015), it will also show the most popular item based on the selling percentage in one day. Requirement of update is automatic in point of sale system where software is updated within a particular time.

Disadvantages:

Timely update is necessary unless company may face security risks. Continuous and reliable internet connection in POS system is necessary. Absence of reliable internet connection is not effective to conduct a smooth business in the work process of the selected firm. It requires to access with a monthly or yearly subscription fee. Using of credit and debits cards in point of sale system may expose the financial vulnerability (Cummins and Cummins, 2018).  As it is a web based system it is mandatory to create connectivity in internet and hardware terminals.

Competitive advantage gained by the business after the inclusion of POS 

POS system is helpful to conduct works faster and accurate within a company. There is no need to memorise product price or manually input data as the traditional cash registration process. It is helpful to serve customers rapidly with accurate accounting system customers do not need to wait for long time. Stock management facility is another advantage that easily accessible with the help of point of sale system. It is automatically done by modern point of sale system. It is helpful to count stock, track their location and amount of stocks within a company. It helps a venture to assume the demand and makes stocks ready to sell customers. Forecasting is a major issue that influences a company in competitive ground. Employee tracking such as staff behavior, sales figure and competition level are easier to conduct with this process.   

The positive outcomes of having a centralized Database 

After the inclusion of the POS system the organisation was provided the chance of operating through a centralised database. As per the view of Agarwal (2017), a centralised database provides the SMEs a chance of understanding the required changes that can bring about development in the organisation. The centralised database holds all the required information about the company. The annual sales and revenue earned and the assets of the company are properly maintained through the centralized database. With the help of this database the managers of the SMEs are able to access the entire sales history of the organisation and locate the reasons for the loss.

In the case of FSGN, the proprietor and the executive authorities found that the business was continuously facing negligible profit or loss. To avoid these POS systems was included in the company in 2008. After the inclusion of the system it was seen that data was accurately handled and could be easily tracked (Parento and Bhatt, 2016). This helped the company in taking the required decisions from strategies which could bring about profit.

Impact of POS in the process of decision making

Influence of point-of-sale system on business process:

It is able to track proper information about entire work process in company. The effect of this system is much helpful as POS can track ordering diminished stock to point out the best seller. The main influence of this system is on time management section. Effectiveness of POS is related with high efficiency, management and controlling on every section of a company.

Tracking:

This information can be tracked manually whereas, it is long term process and time consuming. Additionally, it increases the expense of company. Automatic process is quicker than the manual information tracking system.

Types of questions could be answered effectively:

Questions related to selling rate in every day, most or least selling item, as well as different other account related problems can be answered effectively.

Better management:

For better manage the business POS system can be used to provide unlimited support for business enhancement. As a venture can access all necessary information it can easily track any dispute in working process (Weber and Bailey, 2016). It increases selling as company manager points to the least selling item and focus on its quality. Employee payroll can be controlled and it is helpful to manage promotion after certain time.

Recommendation of options of telecommunication in the POS business system 

Types of networks – FSGN is a Colorado based SME and they have only one office. As a result usage of Local Area Network (LAN) is the best telecommunication option that they should choose. This can be helpful for them as the company database is accessed only by the few people at a small location. As long as the company is based on a single location, all the computers of the organisation can be accessed through a Local area network. As per the view of Cunningham et al. (2015), through the usage of LAN, all the computers of the company are connected through a centralised database and all the people with the ids and passwords can access them. The database should also be protected by a single security system so that the passwords are provided only to the concerned people and all the employees of the company cannot access the private data.

Types of media:

In accordance to present times and the highly advanced technologies that science has provided the world the cost required for the installation of wired technologies and wireless technologies have become almost similar. However, wireless technologies are still little expensive in comparison to wired technologies. As stated by Kotlarsky et al. (2015), wireless technologies, although little costly come completely hassle free and needs much less attention. The wireless technologies also require less space allocation compared to the wired technologies.

Wireless Technologies can be installed in FSGN with the help of devices like RFI, Cellular Communication, Wi-Fi, Radar Communication or Bluetooth communication across the computer systems. With the installation of all these systems and the connection provided through the LAN, the organisation can connect all their systems over a single database and the managers and executives of the company can access all the required files and documents as per their requirements. Wireless communication systems will also have easy maintenance compared to wires as wires get torn and need replacement but wireless technologies are everlasting.

Risks faced by the company after including new POS system and the ways of   controlling the risks 

Security:

After the inclusion of the single centralised database all the computers of the organisation are connected. There is a chance of the private data being accessed by all the employees of the organisation and there is a chance of the data getting spread (Kelley, 2016).

However, the IT experts in control of the database should provide passwords to the database and they should be allowed access only by selected people of the organisation. The corporate executives and the senior hierarchy of the organisation should be given access to the database.

Privacy:

The privacy of the data in the database should be maintained. The people in authority of the database should regularly check it for availability of malwares and spywares. Lau et al. (2018) opined that, the database should be made almost unhackable so that anybody from outside cannot access it. The IT experts of the company should also make sure that the database is updated and upgraded from time to time so that they can provide the organisation with better help regarding decision making.

Confidentiality:

The confidentiality of the database should be maintained by all the employees of the organisation. Just because it is a small business, hackers shall be more oriented to hack the resources as the security systems of the large businesses are much more secure. The hacking of the central database might enable the hacker retrieve the personal details of the employees and access private data of the organisation including special gardening strategies and special techniques of the nursery. This information is confidential as they are unique and vary from one company to another.

Conclusion 

The study talks about the Impact of Information Technology in a SME named Four Seasons Greenhouse and Nursery. The advantages and disadvantages of the newly incorporated POS systems in the organisation have been talked about. Further, the Competitive Advantage that is gained after the inclusion of POS and its positive outcomes has been talked about. The help that is provided by the centralised database in ethical decision making has been discussed. A type of networks that should be used for the telecommunication in the POS Business System and the risks factors that is faced by the company is discussed. The ways in which the company should control the risks have also been talked about.

References

Agarwal, G., 2017. CA Technologies Inc. Controlling mobile payment transactions based on risk scores for point-of-sale terminals determined from locations reported by mobile terminals. 32(5), pp.23-33.

Benjamin, M., 2015. Capital One Financial Corp, Systems and methods for providing a financial discount or reward, 14(4), pp.925-970.

Cummins, M.J. and Cummins, I., 2018. Pomo Search Ltd,. System and method for point of sale transaction logging. 10(5), pp.12-25. 

Cunningham, C., Good, T., Kearney, S.P., Miraglia, M., Amundsen, T., Giordano, P., Wang, Y.P. and Zhu, X., Metrologic Instruments Inc, 2015. Point of sale (POS) based checkout system supporting a customer-transparent two-factor authentication process during product checkout operations. 12(7), pp.10-12.

Kelley, A.L., NCR Corp, 2016. Secure crypto currency point-of-sale (pos) management, 10(7), pp.56-98.

Kotlarsky, A., Au, K.M., Veksland, M. and Zhu, X., Metrologic Instruments Inc, 2015. Automatic digital video image capture and processing system supporting image-processing based code symbol reading during a pass-through mode of system operation at a retail point of sale (POS) station. 12(7), pp.89-100.

Lau, P., KOTECHA, L.R. and Sanjeev, K., Verizon Patent and Licensing Inc, 2018. Point-of-sale location check for payment card purchases. 10(4), pp.151-160. 

Parento, S.A. and Bhatt, S., Mastercard International Inc, 2016. Methods, systems, and computer readable media for providing benefits to loyalty cardholders via loyalty card transactions. 89(7), pp.58-62.

Weber, L. and Bailey, K., Visa International Service Association, 2016. Dynamic point of sale system integrated with reader device. 12(7), pp.56-66.

fourseasonsgreenhouse.com 2018. FOURSEASONSGREENHOUSE.COM. Available at: https://fourseasonsgreenhouse.com/ [Accessed on: 25 July, 2018]