In today’s digital-first world, cybersecurity is no longer an IT concern—it’s a business imperative. As companies embark on large-scale ERP transformations, they often focus on process efficiencies, cost savings, and operational improvements. However, one of the most overlooked yet critical risks in these projects is cybersecurity. With ERP systems acting as the backbone of an organization’s data infrastructure, a breach can cripple operations, expose sensitive information, and cause irreparable damage to a company’s reputation.
The Growing Threat Landscape
This definitely isn’t a new topic – indeed, after the Capital One and Equifax breaches over 5 years ago, Eric talked about their impact on the future and confidence in ERP cloud implementations. However, cyberattacks are becoming more sophisticated, and ERP systems—in the past seen as secure, on-premise solutions—are now even more so prime targets. As businesses move to cloud-based and hybrid ERP environments, they open new threat vectors that bad actors are eager to exploit.
Recent high-profile breaches have demonstrated that even the largest enterprises are vulnerable. For example, attackers have increasingly used ransomware to encrypt entire ERP databases, demanding massive payouts to restore access. Additionally, insider threats and phishing schemes have exposed weaknesses in authentication protocols, making it easier for unauthorized users to access critical systems. A recent article in CSO Online magazine highlighted that even SAP has been subjected to a spike in sustained hacker interest in their hosted ERP offerings, so no one is immune at this point (source – https://www.csoonline.com/article/3624464/researchers-expose-a-surge-in-hacker-interest-in-sap-systems.html)
Why ERP Systems Are a Prime Target
Unlike other enterprise applications, ERP systems house a company’s most valuable data—financials, HR records, supply chain details, and customer information. This makes them highly attractive to cybercriminals looking to steal or manipulate data. Some key reasons why ERP systems are increasingly at risk include:
- Complexity and Integration: Modern ERP solutions integrate with multiple third-party applications, increasing the attack surface for cyber threats.
- Cloud and Hybrid Adoption: Cloud ERP offers scalability and flexibility but also introduces new security challenges related to shared infrastructure and data access.
- Legacy Systems and Outdated Security: Many companies still run legacy ERP systems that lack modern security protocols, leaving them vulnerable to exploits.
- User Access Risks: Inadequate role-based access controls (RBAC) and excessive user permissions create entry points for attackers.
Common Cybersecurity Pitfalls in ERP Implementations
- Ignoring Security in the Early Stages: Many organizations prioritize system functionality over security during ERP selection and implementation, only addressing cybersecurity as an afterthought.
- Lack of Employee Awareness: Employees remain the weakest link in cybersecurity. Poor training on phishing scams, password hygiene, and social engineering attacks can lead to devastating breaches.
- Insufficient Patch Management: Failing to apply vendor security patches and updates in a timely manner can leave ERP systems exposed to known vulnerabilities.
- Inadequate Data Encryption and Backup Strategies: Without proper encryption and backup measures, companies are more susceptible to data theft and ransomware attacks.
- Overlooking Regulatory Compliance: Many industries have strict data protection regulations, such as GDPR and CCPA. Non-compliance can lead to legal repercussions and fines. This is especially important for a lot of our international customers–changing regulations across country and regional boundaries can add additional complexity to an already complex implementation project.
Best Practices for Securing Your ERP System
As cybersecurity threats continue to evolve, organizations must take a proactive approach to securing their ERP environments. Here are key strategies to mitigate risks:
- Adopt a Security-First Mindset: Security should be integrated from the start, not addressed as an afterthought. For example, when implementing SAP S/4HANA or Oracle Cloud ERP, businesses should conduct a cybersecurity risk assessment before go-live, ensuring that firewalls, encryption, and secure integrations are in place. Companies that embed security into their ERP planning avoid costly retrofits and minimize exposure to vulnerabilities.
- Implement Multi-Factor Authentication (MFA): MFA is a crucial layer of defense against credential-based attacks. A global manufacturing firm using Microsoft Dynamics 365, for instance, requires employees to authenticate via a mobile app when accessing ERP data remotely. This prevents attackers from using stolen passwords alone to gain access to critical systems.
- Regularly Update and Patch Systems: Many cyberattacks exploit outdated software. A major retailer running an older version of SAP failed to patch a known vulnerability, resulting in a ransomware attack that disrupted supply chain operations. Organizations should implement an automated patching process and schedule regular security audits with their ERP vendors to avoid such risks.
- Enhance User Training and Awareness: Human error remains one of the weakest security links. A financial services firm using Oracle ERP reduced phishing-related breaches by 70% after launching quarterly cybersecurity awareness campaigns, including simulated phishing attacks and password hygiene training. Educating employees on recognizing threats is just as important as technical safeguards.
- Limit User Access and Privileges: Over-privileged accounts are prime targets for cybercriminals. A logistics company using NetSuite ERP found that an insider threat was able to manipulate financial records due to excessive user permissions. By enforcing role-based access controls (RBAC), they reduced unnecessary access and enhanced system integrity.
- Monitor and Audit System Activity: SIEM tools can detect anomalies before they escalate. For example, a healthcare provider using Workday ERP identified a suspicious login attempt from an unauthorized location. Because of real-time monitoring, the IT team blocked access and prevented a potential data breach involving sensitive patient records.
- Develop an Incident Response Plan: A company hit by ransomware should not be scrambling to figure out its response. An energy firm using SAP ERP minimized downtime after a cyberattack by having a well-documented response plan that included isolating affected systems, restoring encrypted data from offline backups, and notifying relevant stakeholders. Organizations must conduct annual response drills to ensure their teams are ready for potential breaches.
The Bottom Line
Cybersecurity is no longer optional—it’s essential. As ERP implementations become more complex and interconnected, organizations must recognize that security is just as critical as functionality. A proactive, security-first approach will not only protect sensitive data but also ensure business continuity, regulatory compliance, and long-term success in today’s digital economy.
The question is no longer if your ERP system will be targeted, but when. Are you prepared? Let me know your thoughts on the topic and if you have any additional advice in the area.
