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POS Buyers Guide or How to Stay Away From Common Mistakes

                   Choosing the right hardware and software foundation - the "infrastructure" to your POS system 

We discuss below some of the factors you should consider before investing in a POS system, but we want to start out with perhaps the most important principle you should always keep in mind: To your up front investment for hardware, software and networking, you must add the cost of maintenance.

These are the expenses you pay to vendors, or which you incur with in-house technical staff, to maintain the hardware and basic system software and networking infrastructure - to solve problems as they occur, to avoid "down-time" and certainly to avoid lost data. These are the obvious maintenance costs and one you need to incur to insure uninterrupted operations and no loss of data.

The less obvious maintenance costs, however, are those "hidden" costs that you must take into account and that are unique to the information technology industry - and that is the cost associated with maintaining the most current applications and software technologies. Allowing for these costs will insure that your business continues to benefit from the same efficiency and cost effectiveness as when your system was first installed. Only systems that continue to grow and accommodate new business requirements, such as those in the restaurant industry, can avoid these hidden costs.

When evaluating different POS vendor offerings, or building your own... always account for the costs of maintaining a modern infrastructure so it continues to help you manage your changing business requirements.

What kind of computer and operating system?

Personal Computer (PC) vs. Macintosh (Mac) platform:

PC – medium reliability and stability followed by affordable choice

Mac or Macintosh – high reliability and stability followed by a "high ticket"

Mac's cost more up front, and because there are fewer authorized Apple dealers, the cost of repairs, if required, will be more expensive. The other problem you'll encounter with a Mac is that it runs a closed operating system (OS) relative to the PC. This has meant that there are relatively fewer business application software packages that run on a Mac OS than, for example, on a Window's OS. So while the Mac system is infinitely easier to learn, and much more user friendly, it only has a fraction of the business application software that are available on a PC running Windows OS.

Our Advice: – Stay away from the Mac for your business needs, unless you're in the graphics and design industries.

What about a Linux operating system instead of Windows on the PC platform?

OK, so you purchased a PC and now you need to choose the operating system, the OS.

Windows (made by Microsoft) – medium reliability and stability, but very affordable choice

Linux (made by public contributions to open forums – but with commercial variations)– high reliability and stability, but at the present time its relatively early in its life cycle, and probably a pricy option, especially for a small business to rely on.

While Windows is an off-the-shelf product from Microsoft that has been sold and re-written for 15 years, (having virtually copied earlier versions of the Mac OS) Linux has its foundation in 40-year old UNIX. It is a stable product and, in the beginning, less expensive. If you're a tech savvy and prefer to buy materials to build your own house, Linux could be your choice. You should, however, take into consideration that building your own system is going to take time and money. There are not many Linux professionals around to answer your specific Linux questions.

OK, you can say, but what about products like Fedora, Red Hat, etc ... - aren't they decent commercialized versions of Linux products and worthy of consideration? And the answer is yes; they do have good and stable versions of the Linux OS.

However, just like with the Macintosh, trying to find business applications, such as accounting or office software for Linux will not be an easy task.

Windows is not going to be the perfect choice, but it is going to be the right choice because in the long run its backed up by financially stable company and there are tons of professionals who are experts in all things Microsoft. In addition, you will not be limited finding application software products that are commonly available and address your business needs. Microsoft and hundreds of other vendors have made application software for the Windows OS.

How about other available platforms or operations systems?

Yes, you can find a variety of "closed" proprietary systems, but the question is why?

Many businesses choose this solution because the vendor tells them that if they buy their system that it will take care of all of their needs and that the business owner will not have to worry about technical systems, but instead just concentrate on their business.

Unfortunately, this promise never gets fulfilled.

The reality of closed propriety systems is that the vendors of these systems lock your business into a proprietary solution for a long time that will cost you much more in the long run. With a closed proprietary system your choices are limited. You may not be able to respond to changing business conditions, or you find that the cost of doing so is prohibitive. At that point you lose control of your business, and those hidden costs we talked about in the beginning turn to real costs, or lost revenues. And, the sad part of this scenario is that with modern advanced technologies, you will probably pay more for these closed end proprietary systems in the long run.

Here are some of the questions that must be asked if you are considering a closed proprietary system:

  • What happens if their consulting or maintenance fees are no longer affordable?
  • What kind of leverage do you have if they provide you "poor" customer support?
  • What if they filled bankruptcy?
  • What can you do if they fail to add new features that respond to your changing needs and are available in the systems used by your competitors?

Using a closed proprietary system is like driving a carriage from point A to point B while you can drive a car.

The old myth about a closed system allowing the business owner to avoid dealing with technology has been exposed as having the opposite affect. They are more costly and more detrimental to your evolving business needs than a system based on open, common systems technologies.

Wires vs. Wireless Networking

With wireless networking technology, you can be mobile and fast. Even thought wireless technology for the public is very affordable and much more stable than 5-10 years ago, maintaining a wireless network based on Infrared or Radio Frequency technology can be expensive compared to a wired network. Finding and hiring technicians to check your wired computer network and hiring RF map planner engineer is a two different leagues (Infra-Red is even more complex). Even if you can handle this task on your own, you're still going to need very expensive accurate wireless equipment that can track your problem down. Then and only then you will understand that installation of a new wiring or replacing an old one is not an issue.

Dial up vs. high-speed networks - in process of being rewritten...

Looking for Point Of Sale systems - some principles

Don't buy hardware first and then look for Point Of Sale software. You could be wasting money and time.

Here's why:
POS software systems have different requirements that need to be filled. These requirements impact the technology infrastructure you set up, for example, the client-server configuration.

POS systems require different data base solutions, transaction processing algorithms, security processes, audit trails, etc. All of these things translate into transmission speeds, memory size, input – output processes, storage capacity and many other attributes that define the minimum type of hardware and operating system environment that must be present to adequately accommodate the POS system. For example, some of them require more gigabytes of memory; others will use wireless connectivity, while the rest will use copper wires. Some of them will offer "slow" dial up or modem transactions while other will accommodate high-speed Internet transactions.

Coming with your own hardware to a Point Of Sale system provider can only limit the solutions to your business needs.

The temptation to save money by buying hardware your self will prove more costly in the long run.

In addition to limiting your POS system, you'll end up playing the "blame the other" game. The POS Company will blame the hardware reseller and visa versa, and you end up in the middle.

That's why another principle about buying a POS system is to buy all the hardware and software system components from your Point Of Sale provider.

This total solution will give the most reliable support. Being knowledgeable in hardware and software, your POS software providers will find a perfect "match" to boost and maximize your system performance and provide a perfect solution and a partner to grow and change as your business needs grow and change.

Another principle for making a decision about your POS service provider is their industry orientation.

Look for software providers experienced in your industry. They have a better understanding of the nature of your business, of industry trends, and of your "wants and needs.” A vendor committed to your industry will have more experience and will offer faster industry customized solutions.

Another principle for making a decision about your POS service provider is based on evaluating each vendor's characteristics, as follows:

There are 3 basic categories of POS vendor:

  • Start-ups
    Just got started in the business; don't have any financial stability; little or no experience; will start any project even if past failures.
  • Emerging companies
    Know what they doing, their product matches extremely well with any other vendor products; committed to technological excellence and change; committed to excellent customer support; committed to affordable pricing plan that makes business sense and does not inhibit their clients to exploit new technologies to meet changing business needs able to customize system to meet unique client requirements; experienced with successful projects and can talk honestly about what was learned from a failed project; and fair referrals.
  • Large-scale companies and corporations
    Well-known for years in the industry; financially stable; very experienced; can charge whatever they think the market will bear--"sharks that only like to swim with other sharks" – taking only POS projects that they like; slow to respond to emerging customer needs because of large internal bureaucracies, high internal costs of making changes; and the fact that whatever changes they do make are generally controlled by the needs of their largest clients.

Follow these guidelines to find the right POS system and company for you:

  • Ask for referrals
  • Emerging companies
  • Look at consumer reports
  • Search for product reviews
  • Demand to see a demo

System budgeting

When receiving a quote, be advised that many POS vendors have hidden costs that can create havoc for your business case. Look for the "nickel and dime" impact. Be sure to factor in the following cost elements:

  • Customer support fees
  • System maintenance fees
  • System upgrade fees
  • Shipping and handling fees
  • Customized system extensions for your business only

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Steve Rezhener, Technical Analyst
POSnet LLC
Visit us: http://www.posnet.us