What is ERP system security and why should you care?

ERP (Enterprise Resource Planning) systems are increasingly popular amongst organisations in a variety of different industries. They play a significant role in managing and automating various business processes. These systems also help you collect, store and process a large amount of sensitive company data which, unfortunately, makes them a bigger target for cyber threats too. As a result, robust security methods must be implemented in the ERP systems in order to protect businesses and their data. This article will look into the ERP security further: why it is important and what can be done to protect your software.

What is an ERP system?

First and foremost, it is important to understand exactly what an enterprise resource planning system is and how it works. ERP system is a type of software that helps manage businesses in a highly centralised and integrated way. There are many different ERP software on the market, however, most of them share a similar principle. 

Typically, such systems are designed as an all-in-one dashboard that provides a comprehensive view of all company data and operations. They essentially use a number of different business tools (in the form of apps and modules), each catering to a specific process within a business - for example, accounting and payroll, CRM, HRM, POS, marketing, project management and so on. Each of these individual modules will be interconnected in order to achieve a productive and frictionless interaction between them, where different departments are able to move data and collaborate efficiently with one another.

Additionally, ERP systems can help streamline and automate business processes even further, resulting in savings of key company resources, including time and costs. The open-source software Odoo, for example, will also allow users to program and implement custom solutions, tailor-made specifically to their unique business needs or industry requirements. Depending on which system you choose, there are options for on-premise, cloud-only or hybrid types of software. 

While the benefits of an integrated business management system are clear, the question that gets asked most often is should small businesses acquire ERP systems? Unfortunately, there is no one-size-fits-all answer to this question - it highly depends on the resources the company in question has available and the stage it is currently in. ERP implementation services are normally a substantial investment not only in terms of money but time too, so your business has to be able to make that commitment. 

Why is ERP security important?

The security of your ERP system should always be at the top of your priority list, given the large amount of sensitive company data it stores, including financial information, personal customer data and other confidential business information. Sadly, cyber attacks are getting more intelligent and frequent with time, with hackers now deploying AI technology to perform them, and business management systems are a common target. 

The consequences of such an attack could be absolutely devastating to any organisation. Such threats as a data breach or an unauthorised access to company accounts could result in significant financial losses as well as a damage to the organisation’s reputation. Not only that, any third-party systems that your ERP software is connected with could also become at risk, leading to disruptions across the entire network of company processes. Certain operations may have to be shut down for long periods of time, while some important files may get completely destroyed. 

Regulatory compliance is also a key concern for many organisations. While you may have fallen victim to a malicious cyber attack, the data security authorities will still hold you accountable for the failure to secure your ERP systems and protect your customers’ and employees’ data. Data security breaches will often lead to hefty fines or even legal consequences, further damaging the business. Unsurprisingly, some organisations struggle to recover from cyber attacks. 

How are ERP systems protected?

Luckily, the majority of ERP systems are also using top protection methods with the latest technological developments in-mind. There are a number of different security measures and controls that can be used in software. Here are some of the key examples:

• Data encryption - Many software use high-end data encryption methods in order to prevent unauthorised access to valuable company information. This is done by using complex mathematical algorithms and digital keys which encrypt the data while it's in transition and decodes back into plain text when authorised access is gained. 
• Firewall protection - Another kind of security method often used by ERP systems is firewall protection. This is essentially a software that monitors and controls incoming and outgoing network traffic, only authorising access based on predetermined security rules. It helps detect potential malware and other threats too. 
• Network segmentation - In order to further enhance network protection, it is often divided into segments of sub-networks which make it much more manageable and secure. Each smaller segment will, therefore, operate with their own security systems, such as firewalls, routers and so on. For instance, the network responsible for a company's financial information will be separated from that of email campaigns that hold customer data. Hence, if one becomes vulnerable, the hackers don’t automatically gain access to the others too. 
• Regular backups - Backing up your company data regularly is a self-explanatory method of protection. In case of a security breach or a system failure, the backup will ensure that everything can be recovered safely. A good ERP system will automatically perform backups for you, so you don’t have to worry about doing it manually. 
• Security updates and patches: Continuous monitoring, testing and updating is another key activity in protecting your business from the ever-evolving cybersecurity threats. Ideally, your chosen business management system's developers will do this by regularly assessing the processes and addressing any vulnerabilities they may find. 

The best cybersecurity practices for businesses

Although advanced ERP systems are already integrating the above security tools to protect your business and its data, there are certain things that can be done to further strengthen your security efforts. 

One of the most important factors to consider is spreading cybersecurity awareness across your entire team. According to a number of studies, human error is responsible for over 90% of all data security breaches. This is due to unsafe handling of company data, various mistakes done in the systems or, in many cases, failing to recognise online scams. Hackers often target employees with phishing emails or scam calls attempting to gain valuable information from them. Educating and training your employees on how to recognise such situations and follow security protocols will minimise the likelihood of such an event. Additionally, your team should be regularly reminded of the importance of cybersecurity, encouraging them to create strong passwords and follow other common security practices. 

Moreover, every company is required to implement proper access control to ensure that only authorised users can access specific systems. This is particularly important when it comes to highly sensitive data - most of your employees do not need to have access to such information and only the selected few will need to deal with it. In ERP systems, this can be easily done by using role-based access (e.g. admin users will be able to access and modify much more compared to a general editor user, who is only able to modify areas relevant to their role in the company). Other protection methods include multi-factor authentication, unique login credentials and so on. 

Lastly, even though ERP software will implement their own security checks and updates, it is important to also introduce your own testing procedures. Every business should perform regular assessments on their systems in order to identify any potential threats, both internal and external. This will not only help you further strengthen your security efforts but also prepare a contingency plan in the event of a cybersecurity breach. Of course, don’t forget to make sure that your systems are regularly updated and backed up to make the most out of the integrated protection tools as well. 

Final word

To conclude, ensuring maximum security is of paramount importance in all business areas, and ERP systems are no exception. On the other hand, this software is designed to provide you with the most advanced protection tools and technology, with continuous monitoring and updates to keep improving it. As long as you implement the right system and take the necessary precautions to ensure your security, your business should be protected. 

If you do, however, have questions or concerns regarding ERP security, don’t hesitate to get in touch with us. You may book a FREE consultation with one of our experts, who will demonstrate the Odoo ERP system for you and explain the protection tools integrated in this powerful software.