Reference no: EM132064866 , Length: 2000 Words
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.
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.