ERP systems have become a necessity for today’s businesses and organisations and they have truly implanted themselves as the backbone of organisations when it comes to the management and operations of various departments.
Enterprise Resource Planning (ERP) systems can help organisations centralise data of various departments into a single system thereby improving accessibility and visibility and making it possible to manage your entire business from a single point of control.
This means you can control important departments such as finance and human resources and even manage critical tasks of supply chain management quite effectively.
The global ERP software market size is expected to reach at least $130 billion dollars by 2032 with a CAGR of 10.5%.
Most of which is going to be based on the cloud rather than being enclosed in a secure on-premises environment.
Having a system on the cloud has a lot of advantages whether it is accessibility or scalability or even the fact that it is much more economical and affordable but there are problems with a cloud set-up as well.
The only truly secure ERP Software solution is one that is not connected to the internet which is impossible to find today.
That is why we are going to talk about common ERP security risks that have the potential to affect both cloud and on-premises ERP software solutions.
So, let us look at some of the most common ERP security risks and also find out the solution to them.
Most Common ERP Security Risks and How to Resolve Them
Improper Data Encryption
One of the very first ERP security risks we are going to talk about is definitely going to be improper data encryption and this is the problem with a lot of organisations and companies.
It is not just enough to have a good ERP solution in place because if you do not always maintain the tightest form of encryptions during storage or transmission then you send the risk of attacks because attacks do not give prior notices and come.
The solution to this is to have encryption protocols in place such as AES (Advanced Encryption Standard) or TLS (Transport Layer Security) and also maintain a security schedule where you can continuously monitor the encryption status.
Software Update Issues
Another very common security issue that is not really talked about a lot is that companies sometimes choose ERP vendors that have a bad reputation for no updates are very few updates.
This is usually the case when companies decide not to provide security patch updates to the ERP software. While reputable names in the industry will never do something like this but some ERP solutions are all about software that is affordable and that does not come with regular updates.
The thing with software like this is that it is much more vulnerable to attacks if the company does not provide regular security patch updates.
That is why the only solution you have in a situation like this is to just go for the best names in the industry and also actively monitor vendor security updates of the latest security flaws.
Bad ERP Authentication
You should never compromise on authentication whether it is an ERP solution or any other kind of enterprise software that you utilise.
The problem with weak authentication or inadequate authentication methods is that anyone can break into your system if they simply have the ID password something as basic as a phone number.
If you do not want such a kind of vulnerability to be present in your ERP system then you should always opt for multi-factor authentication (MFA) for ERP access.
This will provide you with options for improving and increasing the login security of your system and if you want to improve it even further then you should always utilise complex multi-character passwords along with a strict password-changing schedule policy.
Web-Application-Specific Vulnerabilities
ERP systems can be accessed by proprietary software and apps but most are accessible through the web which means you get all the vulnerabilities that come with web access.
This includes attacks like cross-site scripting (XSS) as well as SQL injection and even other types of attacks.
This just opens up another window of vulnerability and the only way to get rid of such issues is with robust Web Application Firewall (WAF) systems and along with that you can also employ something called Intrusion Detection Systems (IDS).
In addition to that, you must also ensure secure coding practices and conduct regular testing and audits.
Unknown Vulnerabilities
One of the scariest types of vulnerability you can encounter is unknown vulnerabilities or as they are more popularly known as zero-day vulnerabilities.
These are security risks that are still present without any solutions to them because of how new they are.
The problem with these vulnerabilities is that you do not really have a solution for them but the one thing you can do is to opt for a vendor that has a proven track record of providing security patches in the fastest time possible.
In addition to that you can also stay ready for any kind of attacks such as with the help of regular penetration testing and vulnerability assessment tests.
User Permissions Management Issues
Every organisation should have user permission management rights that restrict or allow permission of each user to access the software in a limited capacity.
This means that every regular employee should only have access to their own project and a manager should be able to access all the projects they are managing.
Someone higher in hierarchy than the manager should be able to access the projects of multiple managers and someone above that should be able to access the data of the entire organisation.
A system like this is simply there to prevent everyone from getting access to everything and this simply reduces the points of attacks.
However, companies usually do not follow a system like this which means any average employee can have access to the data of the entire system and that is what should be prevented.
Lack of Proper Data Backup Protocol
Companies using ERP systems should never compromise on data backup security and they should have proper data backup protocols in place that dictates how data backup should be handled.
One of the common points of data leak does not usually happen with an active system but with backups of that system as attackers try to gain access to data backups and other backups of the system.
If the data backups are compromised then it can lead to major issues and companies will simply not be able to recoup the losses from something like that.
That is why data backups should also be done with encryption in mind as well as redundancy of keeping backups both in local storage and on the cloud.
However, you can also choose completely local backups that do not have any kind of connection to any networks so that you can totally prevent any kind of security attacks in the first place.
We hope you understand the risks associated with backups but this should never stop you from backing up data because that is going to keep your systems active even in the situation of a security failure.
Third-Party Vulnerabilities
The thing you need to understand about ERP security is that the more access points you have open, the more the chances of a security breach.
That can be the case if your system is logged in on multiple points of access and that can also be the case with third-party integrations you have for your ERP system.
This can be in the form of APIs and other plugins but the thing to understand is that these will act as doors for attacks.
The way to prevent something like that just only go for reliable third-party services from vendors who respect security standards and apart from that you should also restrict system access to third-party services as much as you can.
In addition to that if you have to choose between functionality and security then you should always go with security because security is non-negotiable for a company that has to deal with data and especially customer data.
If you are only sure that the third-party API or plug-in vendor is reliable then you should go with that vendor but if you have any kinds of doubts in your mind regarding the authenticity or reliability of the vendor then you should not.
Lack of Communication
Ensuring company ERP system security is not something a single person can do because security protocols can only be successful with security awareness.
If you have a team that simply does not communicate with each other when it comes to the various departments and if your team does not have good team spirit with one another then that is a point of security failure in the broader scheme of things.
That is why as company admins you should always run ERP security awareness programs where different team members and departments collaborate with each other in order to solve simulated ERP security issues.
Apart from that, you must also ensure that ERP security is always a topic of discussion during regular meetings so that you can always ensure security is in the common awareness of every team member.
If team members are made to prepare for unforeseen situations, then it will definitely let you be better prepared for any security situations.
Lack Of Testing
One of the most common reasons why companies face security risks related to their ERP systems is simply because they do not have a culture of irregular security testing.
If you want to prevent security issues from arising in the first place then you should encourage an environment of regular security testing with includes tests like penetration testing as well as incident response simulations.
In addition to that, you must also conduct vulnerability assessments that ensure your system does not have any security loopholes in the system.
However, companies fail to do that and this is one of the reasons why they might face attacks on their systems.
Security Education Issues
And finally, the biggest point of security risk in your entire ERP system is not the system itself but the people running the system, we are talking about your employees.
The human element of a security system is often the most risk-prone element simply because you can have a great ERP system in place that is secure but if your employees do not understand security then it will be hard to implement security even with the best systems.
The knowledge and awareness of security as well as the education of security is just like the education of hygiene, you can make people wear as many gloves as you want but if they do not understand the concept of hygiene then your food will always get contaminated.
That is why the only way to solve this kind of an issue is to conduct regular security training sessions based on common ERP-specific threads.
Along with that, you must also regularly invite security experts and consultants into your organisation to help educate your employees on what it means to have a secure system.
Additionally, you must also conduct security audits of the employees in order to test out their knowledge of security so that they can be ready to deal with risks.
We hope this blog has helped you understand the common ERP security risks that companies usually face with their Enterprise Resource Planning (ERP) systems.
If you are someone who is concerned about your Enterprise Resource Planning (ERP) system and you want to ensure some of the best security protocols and practices associated with any ERP system or if you are looking for professionals to implement a custom new ERP system, especially for your organisation then we are here for you.
We are Think To Share IT Solutions and we are one of the premier names when it comes to Enterprise Resource Planning (ERP) system solutions for all kinds of businesses to automate business tasks and micromanage your organisation.
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