ERP Security Best Practices for Sensitive Data

How do you keep your system secure against data breaches and cyber threats?

Given the centralization of critical business data and functions, every business should consider ERP system security a major legal and financial concern.

Assuring security within an ERP System requires sophisticated strategies, controls, and measures to protect against unauthorized access and cyber threats. These tactics involve safeguarding data integrity, ensuring system availability, and maintaining confidentiality across all ERP software modules.

Avoiding ERP System Data Breaches

Due to ERP systems’ complex and interconnected nature, a simple data breach can lead to severe disruptions in business operations and significant financial losses.

A Real-World Example: Equifax’s 2017 Data Breach

The 2017 Equifax data breach, which affected approximately 147 million people, starkly illustrates the importance of ERP security. Equifax’s failure to secure its network properly caused a breach that not only cost the company millions of dollars but also created millions of victims of identity theft.

Cybercriminals exploited a vulnerability in Equifax’s database, exposing millions of names, Social Security numbers, dates of birth, physical addresses, and other personal information.

The breach resulted in a settlement of at least $575 million, highlighting the critical need for robust ERP security measures to protect sensitive data and maintain public trust.

Cloud ERP and Data Security

Over the years, we have heard increasing concerns about cybersecurity from businesses using and evaluating ERP systems. Our recommendation is often to update to a cloud ERP System.

Here’s why…

Many businesses rely on outdated ERP systems that lack vendor support and updates, leaving them vulnerable to security threats. When cloud ERP was a newer deployment option, an early concern was data security since servers were not considered private in a cloud environment.

This is an outdated perspective on the cloud, and we can now attest to how cloud ERP has changed and improved the security situation.

Cloud ERP systems can significantly improve database security for businesses in several ways:

• Provide state-of-the-art encryption.
• Ensure regular security updates.
• Enable continuous monitoring.
• Offer built-in security features, such as:
  • Multi-factor authentication
  • Role-based access control
  • Automated backups
• Help protect sensitive data from unauthorized access and potential breaches.
• Leverage advanced security protocols and infrastructure of cloud service providers.

Cloud ERP providers employ dedicated security teams that proactively identify and address vulnerabilities to ensure the system remains resilient against emerging threats.

The centralized nature of cloud ERP also means that security policies and updates can be uniformly applied across the organization, reducing the risk of inconsistencies and gaps in security measures. As a result, businesses can focus on their core operations with the confidence that their data is safeguarded by robust, up-to-date security protocols provided by their cloud ERP system.

We offer an insightful white paper from a leading ERP vendor CETEC, to further support businesses in understanding and implementing effective ERP security measures.

• Cloud ERP: A Word on Security by CETEC

This white paper provides valuable guidance on coping with emerging cyber threats and understanding cloud ERP security.

Understanding ERP Security

ERP systems integrate core business processes and are critical to organizational functions.

Due to their complexity and the sensitive data they handle, ERP systems are attractive targets for cyber threats and demand robust security measures.

Key Concepts and Vulnerabilities

ERP security protects the system from unauthorized access, use, disclosure, disruption, modification, or destruction.

Vulnerabilities can arise from improper system configuration, inadequate access controls, or outdated software components. These risks can lead to ERP data breaches or financial loss, making it imperative to regularly assess and strengthen the system’s security posture.

The complex nature of ERP systems results in a larger attack surface, making them susceptible to various threats.

Misconfigurations, weak passwords, and unpatched systems are typical vulnerabilities that can be exploited. Compliance with regulations such as GDPR for data protection is also critical, ensuring that ERP systems adhere to legal requirements for information security management.

Threat Landscape

The threat landscape for ERP systems is dynamic and influenced by external and internal factors.

Third-party attacks, where threat actors exploit network or application vulnerabilities, and insider threats, where employees misuse their access, are significant concerns.

Cybersecurity measures must adapt to evolving threats while remaining aligned with organizational objectives and compliance standards.

• External Threats: Cybercriminals, state-sponsored attackers, and competitors may breach the ERP system using malware, ransomware, or phishing.
• Internal Threats: Employees or contractors with access to ERP systems may intentionally or unintentionally cause harm.
• Compliance and Regulatory Risks: Failure to comply with laws and standards can result in legal repercussions and financial penalties.

Strategic Security Measures

Strategic security measures require detailed planning and establishing defined policies and protocols. These measures also involve the rigorous implementation of access controls to ensure the protection of ERP systems.

Each step is essential in creating a secure and resilient environment for your organization’s critical data and processes.

Developing an ERP Security Strategy

A comprehensive ERP security strategy starts with a thorough risk assessment, identifying potential vulnerabilities and threats. 

Involve key stakeholders from different departments in the strategy development process to ensure the plan aligns with overall business objectives. The strategy should include specific measures for mitigating identified risks, such as implementing encryption to protect sensitive data in transit and at rest. 

Regular reviews and updates to the security strategy are necessary to keep it effective against evolving threats.

Security Policies and Protocols

Security policies provide a framework for ERP system protection and should be documented, accessible, and enforced. Protocols are specific procedures that implement these policies effectively.

Key Security Policies:

• Access Control Policy: Manages user access, ensuring permissions align with job functions.
• Data Classification Policy: Classifies data by sensitivity, applying appropriate security measures.
• Incident Response Policy: Guides the detection, reporting, and response to security incidents.

Security Protocols:

• Multifactor Authentication (MFA): Requires multiple identification forms for system access.
• Regular Security Patching: Updates the ERP system with the latest security patches.
• Data Encryption: Protects sensitive ERP data both at rest and in transit.

Implementing Access Controls

Access controls prevent unauthorized access to the ERP system. Apply the principle of least privilege and use Role-Based Access Control (RBAC). Regularly review and audit user access to ensure permissions align with roles and promptly remove unnecessary access. Robust authentication methods, like MFA, add an extra security layer.

Organizations can create a robust foundation to protect ERP systems by integrating these strategic security measures. Detailed planning, defined policies, and stringent access controls work together to secure critical data and processes, ensuring the system’s integrity and confidentiality.

Technical Aspects of ERP Security

Adequate security requires meticulous attention to technical details, from regular updates to robust monitoring systems.

Security Patch Management

Patch management is critical in maintaining ERP security. Organizations should regularly apply patches to their ERP systems to mitigate vulnerabilities. Failure to implement these updates can result in exposure to risks like SQL injection. A well-documented patch management process, including patch testing, approval, and deployment, is vital. This is most prevalent in on-premise ERP systems since vendors deploy updates to cloud ERP systems, but there may be edge cases or cloud integrations where this still comes into play.

System Configurations and Updates

An ERP system’s configurations must be secure by design, focusing on the principle of least privilege and data access controls. Regular system updates are equally essential, ensuring that the system evolves alongside emerging security threats. Configuration changes should be tracked in a change management system to prevent unauthorized alterations that might compromise security.

Monitoring and Response

Continuous monitoring involves scrutinizing system activity to detect and respond to potential threats in real time. The security operations center (SOC) plays a crucial role in this process, with dedicated personnel utilizing intrusion detection systems and security information and event management (SIEM) tools. An effective incident response plan is integral, detailing clear procedures for addressing and mitigating security incidents.

Preventive ERP Security Actions

Preventive security actions are vital for protecting an organization’s digital assets. They lay the groundwork for a robust security posture, aiming to thwart potential breaches before they occur.

Training and Awareness

Organizations should prioritize employee security training, as human error can often be a critical vulnerability. This can be part of implementation training or separate if training is needed for an existing system. Effective training programs should cover password hygiene and phishing attack recognition. Regularly refreshed, these programs ensure that personnel stay vigilant about the evolving nature of cyber threats.

• Annual Security Training: Covers password management and identifying and reporting suspicious activity.
• Monthly Security Bulletins: Provide updates on the latest threats and best practices reminders.

Data Protection and Backup Procedures

Protecting sensitive ERP data is paramount and starts with stringent data protection policies. Backup procedures should be established and executed consistently to maintain data integrity in case of system failure or cyber-attacks.

• Backup Frequency: Daily incremental backups and weekly full backups.
• Backup Verification: Monthly integrity checks and bi-annual restoration drills.

Implementing strong firewalls and encrypting sensitive information in transit and at rest is critical for safeguarding against unauthorized access. Regular updates to firewall rules based on the latest threat intelligence are necessary to maintain a high level of security.

ERP Vendor and Software Considerations

Selecting an appropriate ERP vendor and software ensures robust ERP security. The decision impacts how well the software aligns with organizational needs and its resilience against security threats.

Choosing the Right ERP Vendor

When evaluating ERP vendors, organizations should consider the vendor’s track record in security. A vendor should have a clear security protocol and a history of promptly addressing security issues. Assessing their support and updating policy is crucial, as regular updates can mitigate security risks.

• Experience: Vendors with extensive ERP experience are often better equipped to provide secure solutions.
• Compliance Standards: Look for vendors that adhere to internationally recognized security standards.
• Customer Testimonials: Offer insights into the vendor’s reliability and security effectiveness.

Integrating Third-Party Solutions

Integration of third-party solutions can extend ERP functionality but also introduce security risks. Therefore, it is essential to assess the compatibility and security posture of these solutions.

• Compatibility: Ensure the third-party solutions are compatible with the chosen ERP software.
• Vendor Collaboration: Ideally, ERP vendors and third-party providers should have a history of collaboration.
• Security Review: Conduct a thorough security review for each third-party solution, focusing on data handling and encryption standards.

When considering cloud ERP security, evaluate the vendor’s infrastructure business processes and ability to protect against common threats such as customer data breaches and unauthorized access.

Frequently Asked Questions

This section explores commonly asked questions about ERP security best practices, focusing on training, expert assistance, system features, and prevalent security issues.

What are the best practices for ensuring security in an ERP system?

To secure their ERP systems, organizations should implement multifactor authentication, regularly update systems, and enforce strong password policies. Periodic security audits and access controls are also essential in maintaining system integrity.

Which types of security measures are essential for safeguarding ERP systems?

Essential security measures for ERP systems include encrypting data both at rest and in transit, using firewalls and intrusion detection systems, and using application-level security protocols. Companies must also ensure that vulnerability patches are applied promptly.

What should be included in security training for employees?

ERP security training for employees must cover the significance of data protection, common cybersecurity threats, secure password creation, and the safe handling of sensitive information. Awareness about phishing attempts and operational best practices is crucial.

How do companies specializing in ERP security assist businesses in protecting their systems?

Companies specializing in ERP data security provide tailored risk assessment, implement robust security frameworks, monitor systems for suspicious activities, offer incident response support, and help formulate effective security policies.

What are the key features of a secure ERP system?

A secure ERP system features real-time monitoring, role-based access control, secure interfaces for third-party integrations, and comprehensive audit trails. Its architecture is designed to resist common vulnerabilities and ensure compliance with data protection regulations.

What are the common security issues faced by ERP systems?

ERP systems commonly face security issues such as unauthorized access due to weak credentials and inadequate controls, data leakage resulting from insecure handling of sensitive information, malware attacks exploiting vulnerabilities, and human errors caused by insufficient security training.