The Truth About Cloud-Based vs Standard POS Systems

You’ve most likely heard of “the cloud.” In its simplest definition it’s the place where data is stored.

When evaluating any type of point-of-sale system, you have the option to store data in a main computer that’s perhaps linked to several checkout terminals, or you can store data in a main computer off-site hosted and maintained by a third party service. This is called a cloud-based POS system, and they are increasing in popularity.

When most people think about cloud-based point of sale systems, they think of a system that have a virtual web back end for management and reporting. Most of these systems run in IPads or Android tablets. For the sake of this article, this is type of cloud system we will be addressing. Many of these systems have a very low cost barrier to entry. Is it really worth following the trend of moving away from a standard POS system to use a cloud-based one? Although there can be some advantages to the cloud, here’s the truth about making the switch that you may not have considered.

Data Ownership

Your agreement with many cloud point of sale software systems includes verbiage that makes the Point of Sale Company the owner of the data, or at least gives them full rights to your data to sell it to third parties. It is the rule and not the exception among cloud-based point of sale companies to sell your data.

Speed

Many of today’s cloud systems are running on tablets with low memory requiring constant communication with cloud services for continuous operation. In side by side tests performed by many business owners and dealers, traditional on premise systems simply outperform cloud-based systems regarding speed of service, and speed equals money in typical businesses. This makes sense considering that much of the data required to operate these systems is in the cloud and not on location. Also, the consumer grade hardware used for many of these applications is not built for speed in a commercial environment.

Reliability

Because most cloud-based point of sale systems are based on consumer tablets without multiple ports necessary for reliable operation, peripherals like printers, barcode scanners, cash drawers, etc., as well as network communications are typically run on Bluetooth or Wifi. This becomes the Achilles heel of these systems. These wireless technologies simply cannot match the reliability of a traditional wire to keep your business running. After all isn’t running your business what this is all about?

Security

The cloud moves computing workloads off-site and mobilizes data on rented space on a giant server. Most cloud-based POS systems maintain private cloud systems that are typically in several geographic locations. A traditional POS system is housed in a back office where you manage your own in house security and data back up. If you use a cloud-based system you have to depend on others, meaning you have to trust who you are using to make sure they are providing high-end security and back up services.

Internet Connection

Using a standard POS system does not require an internet connection, but using a cloud-based system does. If your internet goes down, chances are your business goes down, and you could be missing out on sales. However, there are some cloud systems that can store some internal memory. This memory can store some transactions until you can get back up online, but who wants to take this chance?

Also, what happens if you have a system that is dependent on communication with other stations in the network? Such is the case in table service restaurants where a table stored on one station may need to be recalled at another. In this case, a simple network outage could take the business down, or at least leave it crawling at a snail’s pace. No one can ever predict how long an outage will be.

Cost-Effectiveness

When you consider the just speed of service and the possible down time risk that comes with a true cloud-based point of sale system, the costs can easily mount up to cost much more than the price of simply operating a standard system.

So if you’re considering moving to a cloud-based POS system make sure you consider security concerns, internet connection, reliability, speed, data ownership, and cost effectiveness. The truth may be that a standard POS system is still the better choice for your business. Many people want a cloud-based system until they get one.

8

History of the POS System

It’s hard to believe, but the beginnings of the first Point-of-sale (POS) system dates back as far as the late 1800s. James Ritty, a Dayton, Ohio, saloon owner, was known as the “father” of the cash register. He invented a device that could register the amount of cash transactions recorded at his saloon because he wanted stop employees theft. He called it “Ritty’s Incorruptible Cashier,” or as we know it today, the cash register.

He would later sell his rights to the cash register to Jacob H. Eckert. Eckert wanted to manufacture cash registers to a wider audience. So he founded the National Manufacturing Company. That company would later be sold and the name changed to the National Cash Register.

In 1906, Charles F. Kettering created an electric motor for the cash register. This made it easier for employees to process transactions quickly, rather than ringing up sales by hand.

In the 1950’s in London, brothers Sam and Henry created a manufacturing company called Gross Cash Registers where they built, sold, and exported cash registers. In 1971, they created the only cash register that could handle the conversion of currencies, which made their business boom.

Then the first POS systems were introduced to the market in 1973. IBM announced the electronic cash register (ECR), as a mainframe computer packaged as a store back end. It was limited in capability and functionality, but ECR’s were the first computer-based client-server technology to be used in a commercial atmosphere. This system was able to pinpoint top selling items, and print out a summary of the report. By 1974, the system was installed in Pathmark Stores in New Jersey and Dillard’s Department Stores.

In 1979, Gene Moshel, a New York restaurateur, used this technology to pioneer a system for his deli. Mosher wrote software that worked with his computer where customers would order at the restaurant’s front entrance. Then their order would print out in the kitchen.

In 1985, Mosher introduced the first color touch-screen driven POS interface. This software operated on the Atari ST, which was the world’s first consumer-level color graphic computer. This was the beginning of POS system helping business owners to track reports, keep inventory, and monitor employees.

Through the 90’s and into the 21st century the point-of-sale system would continue to evolve, moving from bulky systems to back office services, and tablet based mobile systems. Also, cloud computing would allow POS systems to run as SaaS software, a service accessed from the internet.

Bepoz made it’s mark in POS history, starting in the early 70’s as Business Electronical Pty Ltd. Established in Sydney Australia, the company sold office products and cash registers. Through the years the company would move with customer demand distributing electronic programmable cash registers in the 80’s, and in the 90’s selling POS system solutions.

In 2004, after years of reselling other solutions Bepoz decided to develop it’s own POS software called Bepoz. This revolutionized the POS market with a fresh, intuitive, feature rich, yet easy-to-use, point of sale software. They became both an end-user solution provider and a major software developer in the Australian market.

In 2007, Bepoz started building a worldwide distributor network in New Zealand, the UK, Malaysia, Singapore, Indonesia, Canada, and of course the United States.

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Is It Time For A POS Upgrade?

Point of sale (POS) technology continues to evolve at a rapid pace, and it’s leaving some retailers behind in implementing necessary upgrades.

The reluctancy comes because of the cost and time it takes to complete the upgrade, but what they don’t understand is that an outdated POS system may not only be holding their business back, but endangering their customers as well.

Today, a POS system is not just about a sales transaction; it’s also a critical source of inventory management, data collection, customer experience, theft protection and more. So failing to switch to new POS technology can have serious consequences such as slower transactions, lack of usability, and lost profits. Plus, you could be putting your customer’s data at risk.

Here are five signs that indicate it’s time to update your POS system.

1. Customer Service Suffering

Are you looking to promote creatively? Is your loyalty programming performing the way you want it to? These are questions you should ask yourself. Today’s retailers need customer-centric features such as configurable customer profiles, surveys, omni-channel integration, online order fulfillment at the store and more. If you’re not able to provide the customer experience necessary to keep up you’re your competition, then it’s time to consider updating your POS technology.

2. Omni-Channel Challenges

Do you know your inventory? Consumers are looking for a consistent brand experience, whether they’re shopping online or in stores. They don’t care where an item is in stock, they simply want it—now. It’s no longer acceptable for store associates to be clueless when it comes to real-time inventory. If you’ve got to count and make calls to other stores, send emails, etc. to see what’s in stock, then you’ve got omni-channel challenges.

3. Stuck In One Place

Feel like you need a whole team in place just to run a sidewalk sale? Or perhaps your POS system is clunky, taking up a lot of space and not offering what you need it to anymore. A Mobile POS has endless advantages with regards to enhancing the customer experience, eliminating line-ups and adding extra checkouts when and where they are needed. Take your store outside your brick and mortar business, and rack up on sales at festivals, fairs, or anywhere else you can make money.

Perhaps, mobile doesn’t sound right for you. Also consider this, if your business has a standalone POS system, it’s probably perpetually outdated. If you wait too long to upgrade, the cost to upgrade starts to increase exponentially. An integrated solution, on the other hand, allows for software updates to be pushed through automatically, without requiring new hardware or much effort on your part.

4. Data Deficient

Can you view web and brick and mortar data side-by-side? Can you see a holistic view of your customers? Reporting and analytics can be a challenge with some older POS solutions. Without the right data, how can you make any smart decisions to improve your business growth? If you want to make wise business decisions when it comes to data, consider and upgrade.

5. Stressed Out

Sometimes we can just look at technology benefits and forget about the human sanity benefits when considering and upgrade. Do you have any little quirks with your system? Maybe, the coupon button doesn’t do what it should do. Perhaps, it doesn’t do what you want it to do anymore? Do you have to show employees a loop-hole way around the weird blip in technology? Save yourself time and stress. Update and feel confident that your POS is doing what it should, and what you want it to do to meet ever-increasing technology trends.