Do you know how to protect your ERP system from cyberattacks? Learn the common cybersecurity concerns and what questions to ask your provider in this article. Click here to read more.

Cybersecurity concerns with cloud ERP solutions

Enterprise resource planning (ERP) solutions are software systems that integrate various business functions and processes into a single platform. ERP solutions can help businesses improve efficiency, productivity, and profitability by streamlining workflows, automating tasks, and providing real-time data and insights.

However, ERP solutions also come with cybersecurity risks that need to be addressed and mitigated. As more businesses adopt cloud-based ERP solutions, they face new challenges and threats from cybercriminals who can exploit vulnerabilities in the hardware, software, or network of the ERP system.

What are some of the common cybersecurity concerns when using a cloud-based ERP system?

A cloud-based ERP system is one that is hosted and managed by a third-party provider on their servers rather than on-premise by the business. This means the business does not have full control over the security of its data and applications. Some of the common cybersecurity concerns when using a cloud-based ERP system are:

Data breaches:

A data breach occurs when unauthorized parties access or steal sensitive or confidential data from an ERP system. Data breaches can result in financial losses, reputational damage, legal liabilities, regulatory fines, or customer churn for businesses. Data breaches can be caused by malicious hackers who exploit vulnerabilities in the hardware or software of the ERP system or by insiders who misuse their access privileges or credentials.

Ransomware attacks:

A ransomware attack occurs when malicious software encrypts or locks data or systems until a ransom is paid to decrypt or unlock them. Ransomware attacks can disrupt business operations, cause downtime, damage data integrity, or compromise customer trust. Ransomware attacks can be delivered through phishing emails, malicious attachments, compromised websites, or infected devices that connect to the ERP system.

Denial-of-service attacks: 

A denial-of-service (DoS) attack occurs when a large volume of traffic or requests overwhelms an ERP system’s resources and prevents it from functioning properly. A distributed denial-of-service (DDoS) attack occurs when multiple sources coordinate to launch a DoS attack against an ERP system. DoS attacks can degrade performance, and cause service interruptions, data loss, or customer dissatisfaction. DoS attacks can be launched by hackers who want to disrupt business operations, extort money, or protest against a company’s policies or actions.

Configuration errors:

Configuration errors are mistakes or oversights in setting up or maintaining an ERP system that can expose it to security risks. Configuration errors can include using default passwords, granting excessive privileges, leaving unused ports open, disabling encryption, or failing to apply patches or updates. Configuration errors can be exploited by hackers who can gain unauthorized access, escalate privileges, execute commands, or tamper with data.

Compliance violations:

Compliance violations are breaches of laws or regulations that govern the protection of data and privacy in an ERP system. Compliance violations can result from negligence, ignorance, or malicious intent. Compliance violations can lead to legal actions, fines, penalties, audits, sanctions, or loss of trust from customers or partners. Compliance violations can be prevented by following best practices and standards for data security and privacy such as GDPR (General Data Protection Regulation), PCI DSS (Payment Card Industry Data Security Standard), HIPAA (Health Insurance Portability and Accountability Act), SOX (Sarbanes-Oxley Act), etc.

What questions to ask the provider before choosing an ERP solution?

Before choosing an ERP solution provider for your business needs, you should ask the following questions to evaluate their cybersecurity capabilities and practices:

• What are the security features and controls of your ERP solution? How do they protect data confidentiality, integrity, and availability?

• How do you monitor and detect security incidents or anomalies in your ERP solution? How do you respond and recover from them?

• How do you ensure compliance with relevant laws and regulations for data security and privacy in your ERP solution? 

• How do you handle data breaches or violations?

• How do you update and patch your ERP solution to address security vulnerabilities or bugs? 

• How often do you perform these updates and patches?

• How do you backup and restore data in your ERP solution in case of disaster or emergency?

• How frequently do you perform these backups and restores?

• How do you encrypt data in transit and at rest in your ERP solution?

• What encryption standards and algorithms do you use?

• How do you authenticate and authorize users and devices accessing your ERP solution?

• What authentication methods and protocols do you support?

• How do you audit and log user activities and transactions in your ERP solution? How long do you retain these logs and how can they be accessed?

• How do you test and validate the security of your ERP solution before deployment or after changes? What tools or methods do you use?

By asking these questions, you can gain a better understanding of the provider’s security posture and compare it with your own security requirements and expectations. Choosing an ERP solution provider that can demonstrate a high level of security maturity and competence can help you mitigate the cybersecurity risks and challenges associated with cloud-based ERP systems.

ERP solutions are essential for modern businesses to manage their operations and processes efficiently and effectively. However, they also pose significant cybersecurity risks that need to be addressed and mitigated. Businesses should be aware of the common cybersecurity concerns when using cloud-based ERP systems and ask the right questions to evaluate the security capabilities and practices of their ERP solution providers. By doing so, they can reduce the likelihood and impact of cyberattacks on their ERP systems and protect their data and reputation.

Until Next Time…