How to find the right POS system

MANILA – In the doggone years when small-time retail players make up the market, keeping track of sales transactions covered throughout the operations was a cinch–business owners would often log sales on paper, and compute them with a calculator on day-end.

But for big businesses such as Wilcon Builders Depot, a large network of retail stores selling building, construction, and interior design supplies, automating the POS (point-of-sale) system became a necessary ingredient for growth and expansion, as they shared during Computerworld Philippines’ executive briefing on Point-of-Sale Systems.

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POS, according to Lorraine Belo, the company’s chief information officer, is not just the computer system that logs and tracks transactions within the day. “POS is actually the moment a customer obtains an item and brings it to the person who is selling it,” Belo clarifies.

Because of this basic definition, POS can be carried out using a simple combination of a paper and a calculator, Belo says. “But if, for example, you started out with 100 items [on your store], and suddenly you grew to a thousand items, it’s hard to keep track of the items and sales manually,” she points out.

Computerizing the POS, therefore, becomes an inevitable move for businesses are gunning for, or have already started, growth and expansion, as it brings about certain benefits manual POS couldn’t possibly deliver.

Bang for the buck

For one, keeping track of all the items in the store is one of the primary reasons why retail owners rely on computerized POS systems. “POS automates the data collection process, so you don’t have to do it yourself,” Belo says, adding that this also reduces the need for more manpower to monitor and update the items.

And since fewer human hands are needed to carry out transactions, “there is less room for human error, so you won’t go wrong often,” she adds.

But one thing makes POS systems a boon for retail owners: back-end efficiency. “[When you have a POS system], you can get what you need immediately. You don’t have to go to the stores [to get data yourself ],” Belo explains.

The right fit

Finding the right POS system for your company entails a lot of internal soul-searching. Basically, Belo relates, there are two types of POS systems: off-the-shelf (OTS) and those developed in-house (DIH).

“OTS software are pre-made and can be run out-of-the-box, it’s ready to go,” Belo says. “Most likely, especially if it’s from an international company, it follows a standard and a set of rules. That can be an advantage if you want standard operations.”

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Because many companies rely on these OTS software for their operations, Belo suggests that one can get top-notch support with it, either from the vendor itself or the businesses who use it. “Most likely, you will have complete documentation, since that’s the standard. Likewise, you’ll have no problems getting spare parts or other services,” she adds.

Consistency of the software may be good in some aspects of the operation, but Belo says she discovered a simple flaw with common OTS POS systems: “I found out through research that most OTS POS systems wouldn’t accept post-dated checks (PDC), because technically, it’s not paid for yet. [It goes against] the basic concept of POS, which is cash and carry; you give me the payment, I give you the item,” she narrates.

To be able to incorporate PDCs into their own system, Belo says they had to pay the vendor to make the necessary modifications. “[OTS software’s] source code is proprietary. If you want to change the program, you have to pay for it,” she notes.

Perfect match

On the other end of the spectrum lay the POS systems developed in-house, based on very specific requirements of the business. Some companies opt to take this path due to the very detailed company practices that just can’t be easily integrated into most readily available POS software in the market.

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The patent advantages are flexibility and the ability to effect specific changes in a quick manner, since, basically, you own the source codes of the program. Belo warns, however, against quickly diving to DIH POS systems for those reasons alone, since it can only be had by certain companies with unique requirements.

“When we had only 10 stores, the OTS POS system was pretty manageable,” Belo shares. “But when we expanded, and we couldn’t handle it anymore, we had to upgrade to a bigger system. It really depends on your needs.”

When implementing your own POS system, Belo says it’s important to account for the entire process flow before setting the project in motion. “Make sure you have the entire process flow ready, and try to be complete. When you’re in the middle of the project and you decide to change a certain aspect of the business process, the project will be delayed. It can get problematic,” she suggests.

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Jim Love, Chief Content Officer, IT World Canada

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