Instruction to students: This is an individual assignment.
Task: HC1041 Impact of IT on Business Assignment
Read the case study and answer the following questions:
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.
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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 center 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.
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Questions: HC1041 Impact of IT on Business Assignment-Holmes Institute Australia
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.
Assessment Criteria:
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