Cybersecurity Through the Lens of Cloud ERP

Cybersecurity can be one of the top concerns on a business leader’s mind. Protecting data is crucial, and each day keeping it safe becomes more critical.

There is a direct link between investing in fraud prevention and reduced costs when security is breached. According to a recent study by Price Waterhouse Coopers (PWC), 47% of companies surveyed experienced fraud in the last 24 months, but only about half of those organizations are dedicating resources to risk assessment, monitoring, and third-party management.

Protecting data is two-fold: Internally, it’s important to streamline your organization’s information to protect from accidental misuse and also protect sensitive data from the ill-intended employee. Externally, thwarting cyber hackers and attempts to steal personal data or cause disruption to production is crucial.

Enterprise Resource Planning (ERP) solutions provide a solid security base for businesses and a secure line of defense for your company against internal threats such as fraud and misuse and exterior threats like cyberattacks and phishing scams.

By providing data security through standards-based security practices, risk and failover management, attack prevention, and processes for security advancement, ERPs alleviate businesses from providing their own in-house protection from the ground up.

Choosing Between Cloud or On-Premises ERP

Both cloud-based and on-premises ERP solutions provide a basic level of protection for data. The main difference is where your data is stored and who has access to it. On-premises ERP software is owned and operated by the business owner. All maintenance and updates are the responsibility of the business. At the same time, having an ERP system installed on-site gives control over the IT infrastructure, all processes, and systems from end to end. It also requires a heavy load of responsibility carried by the IT department. It requires proactive measures to ensure your business’ security and data stays safe.

The benefit of an on-premises ERP solution is having complete control over your physical system, and it can easily be customized to suit the specific needs of your business. The ERP solution connects directly to your business network, so no internet is needed. If you have remote workers, you will need to provide security measures such as a VPN.

Some companies with an on-premises ERP solution have a dedicated team member to monitor and update software. A dedicated team member offers expertise in a specific industry giving the company direct access to a one-on-one resource.

With cloud-based ERP implementation, the ERP vendor hosts a business’ information and stores the software in a data center owned and secured by the ERP vendor or a third-party host. Security advantages of cloud-based implementation include:

  • automatic updates,
  • firewalls, and
  • immediate incident response.

There are data security benefits of having an ERP system in general. Both on-premises and cloud-based ERP solutions streamline data with only one entry point per client. This prevents the information from being duplicated or subjected to inconsistent updates. ERP systems also eliminate calculation errors by automating processes tied to:

  • customer service,
  • accounting, and
  • production,

Cloud-based ERP systems offer more sophisticated protection by including built-in security measures that reduce the responsibility load of the IT department. These measures provide 24/7 monitoring of both internal and external activity. They are equipped with an immediate incident response by automatically identifying out-of-the-ordinary events and responding appropriately before they become more significant problems. Internal actions include role-based authorizations and monitoring for out-of-trend activities such as account logins from unauthorized areas. With on-premises ERP systems, all monitoring and updates are the responsibility of the business, increasing the burden of the IT department.

Cloud-based ERP systems can also respond to denial-of-service attacks, have built-in firewalls, automatically back up data, and have distributed data centers worldwide. The best security is a partnership between the ERP vendor and your business. Servers are kept off-site and monitored by the ERP vendor. Software licensing and upgrades are all maintained by your ERP provider as well. As a security partner, it’s essential to be clear about who takes responsibility for each task. Tasks that aren’t clearly allocated can fall through the cracks and make your business vulnerable. A yearly review of current and any new tasks is advisable.

Cloud-based ERP implementation can also watch for fraud or asset misappropriation inside of the business. Specific controls quickly identify unauthorized employee reimbursements and violations of company policies.

Read More: Cloud vs On-Premises: Are You Putting Your Business at Risk?

Choose an ERP Solution and Reduce Risk

An ERP system can help prevent threats that come from both inside and outside of a business. Businesses wanting to improve their system management can see results by implementing an ERP solution. Immediate automated responses to trouble thwart outside attempts.

In-office ERP security risks are low because an ERP solution improves the consistency, accuracy, and security of proprietary data. It ties together different systems used in human resources, supply chain management (SCM), finance, manufacturing, management, and customer relationship management (CRM), making it easier to manage data security and permission-level access protocols. Each customer has only data entry.

The risk of monetary and data loss is minimized because these systems are now accessible in real-time and streamlined while data access is restricted to the appropriate team members. Potential issues in posted transactions and master data are quickly detected and addressed.

As more employees are working from home or using their phones and tablets to do their work, cybersecurity measures become even more crucial. An ERP system can protect employee identification and personal information such as home addresses and private family information.

ERP systems also have highly advanced permission controls to protect critical data and help guard against cyberattacks from hacker groups and other criminal organizations from outside the business. These groups are looking for corporate secrets or to disrupt a company’s productivity and try to gain access through company firewalls.

In the event of a security attack, the ERP system can immediately correct the problem and implement an update automatically. Strict security measures are also in place when integrating with third-party vendors, keeping ERP security risks low. ERP systems maintain an effective firewall and encrypt data and can also help monitor supplier traffic and client portals by providing security parameters.

A cloud-based ERP can also help a business stay in compliance with government requirements through real-time tracking of materials, inventory, and supply chains. Businesses can also set up alerts when a non-compliant action occurs, enabling a company to make adjustments before they become problems.

Read More: Security Risk & Threat Management: Choosing an ERP Solution

Preventing Security Threats

Preventing security threats becomes more manageable with an ERP solution. With cloud ERP, the heavy lifting is managed by your ERP vendor. Knowing that your ERP provides an extra layer of security can be comforting; however, some actions can be taken in-house to enhance security.

An ERP system provides the basis of security by helping to protect your business from security threats including unauthorized access to information on the inside and malicious threats from the outside. Working with your ERP vendor can help reduce the risk of ERP data threats even further.

Start with a company-wide self-audit by identifying, ranking, and addressing all risks. This will give great insight into where your weaknesses are and a baseline for beginning your security journey. Follow up by scheduling regular risk assessments to collect internal and external data. Regular assessments will show improvements and goals for long-term tracking. This information will continue to alert you to gaps in security and tell you where you should focus as the company grows.

Protecting your company from internal threats is just as important as external threat protection. By implementing an ERP solution, digital certificates help ensure protection by using authenticated systems. Role-based security principles of “least privilege” and “need to know” can be enforced by ERP role-based controls. Most ERP systems are set up with full access for everyone. Setting up controls that restrict access to sensitive data only to those teams who need it is in your best interest.

You can also create strong protection against cybersecurity threats and ransomware by checking often for updates and guidelines to be aware of new threats and what they look like. Share pertinent information with staff to prevent becoming susceptible to phishing scams and similar schemes. Educating staff and empowering them to be vigilant lookouts for unusual activity will further protect data.

Beyond internal risks, it’s important to stay secure from external threats, too. ERP implementation can detect exploitation and fraud, ensure data integrity, and identify unauthorized access. It can also provide continuous and automated audits, detect data leaks, and centralize security monitoring, but it is still essential to have protocols in place to enhance security protection and help keep ERP data security strong.

No one likes to think about worst-case scenarios but it’s important to be prepared in case the unthinkable happens. An ERP solution puts your business one step ahead with multiple layers of security designed to protect sensitive data. Multi-layer protection includes protections against targeted attacks such as distributed denial of service (DDoS), firewalls that segment critical components, and the ability to detect unusual activity and take immediate action, often fixing the problem before it becomes a larger issue.

Read More: How to Prevent ERP Data Security Threats

Keeping Your ERP Data Secure

You now know that partnering with your ERP provider can help ensure your business data is kept safe. Keep the following items in mind to ensure your ERP system remains secure.

Employee Training

The most successful companies have whole company buy-in. Having everyone, including management, support the change is essential to the success of ERP implementation. Large projects are rarely implemented without some hiccups. One of the most important items to address is change management to ensure that all workers and teams understand the importance of utilizing the system’s capabilities and how to use them. A strong investment in training and frequent communication will ensure success. A good plan includes sharing what information should be communicated, why, and to whom. Staff training should be regularly available to provide the inclusion of new team members and refresh information for current employees. Employees should have realistic expectations about the transition, and this requires communication throughout the entire implementation process.

Two Factor Authentication

Two Factor Authentication (2FA) and investing in attribute-based accessed controls can keep your company accountable for sensitive data and customer information. Scammers look for easy ways into your company’s data and find it when password security is lax. Be sure to put two-factor authentication into practice and strengthen company passwords. It pays off to be vigilant.

Two-factor authentication requires secure logins by preventing password sharing and a maintained accreditation log with authorizations and checklists for new hires, promotions, and role changes. This helps keep unauthorized access to a minimum.
Role-based access to sensitive data is easy to administer. For example, give read-only access to your organization’s most important information and update the status of workers who become lost through promotions or department changes.

Remote Workforce Strategy

Another component of your ERP management routine should include the consideration of remote work. Don’t forget to establish a strong remote workforce strategy. With a cloud-based ERP system, built-in firewalls, encryption, and automated security features make security strong.

Industry-Specific Software

ERP solutions are industry-specific and offer capabilities custom-made for your industry. They offer the same essential features such as inventory management, human resources, and accounting. You can customize an ERP to your industry, streamlining information and giving your company the benefit of software that works intuitively with your business needs.

Define Vendor Responsibilities

Be clear about who does what. Clear communication with your ERP vendor will pay off by keeping your system secure. Everyone must know that responsibilities are clearly defined. A corporate-wide security audit will show gaps in your strategy.

Set Up Non-Compliance Alerts

Don’t risk being out of compliance. An ERP solution allows you to set up alerts that enable you to make adjustments before problems arise. ERPs monitor materials and processes to ensure your organization conforms to regulatory mandates.

Read More: How to Maintain Your ERP’s Data Security

Common Problems to Avoid

Although moving to a cloud-based ERP solution might seem intimidating at first, knowing the most common cloud-based ERP security challenges can prepare you for the move. Paying attention to these common issues can make the transition smoother. Each of these issues is avoidable. Creating good habits will keep your business secure.

When a business works together with an ERP vendor to increase protection, ERP solutions become more secure than ever. A vendor that specializes in ERP data security bases its reputation on the fact that it can keep data secure, so it’s in the vendor’s best interest to have state-of-the-art software and security measures. Together with your ERP solution vendor, sensitive data can become almost impervious to attacks.

Businesses that face the most challenges don’t exercise control over who has access to sensitive data. Information can be stolen or inadvertently mishandled when too many people have access to sensitive data and the ability to edit it. It’s hard to keep up with employees who move around in a growing company, but this is one of the best ways to protect sensitive data. Most software initially gives everyone full access to all information leaving it up to the business to set role-based access to sensitive data. Be sure to take advantage of the ERP solution’s ability to implement these parameters and give data access to only the teams that need it.

Businesses’ IT departments are often too busy to track activity and record operations carried out on a system. An ERP solution with intelligent analytics can track behavioral patterns and flag unusual activity. In addition, it constantly monitors key security indicators such as user traffic and data volume, making it easier to identify and rectify discrepancies before they become issues.

Businesses that successfully make the move to an ERP solution have a growth strategy that includes security measures. A forward-looking growth plan provides security protection, takes data security into account, and makes sure that software doesn’t become outdated, which would leave a business vulnerable to security threats. As a result, these businesses keep ahead of their competition and quickly adapt to new ideas.

Read More: Common Cloud ERP Security Problems & How to Avoid Them

An ERP solution can help streamline your business and protect it from unwanted loss of production time and money through data protection. Most solutions are customizable to fit your business needs. Developing a plan for implementation, working with your ERP vendor, and budgeting for security growth will ensure a secure future.

Our team at Decision Resources, Inc. has the expertise and experience to ensure your ERP has what it takes to fulfill your company needs and customer expectations while keeping your data secure. To learn more about ERP systems and how they can help keep your information safe, call 412-562-9660, or email us at

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