Businesses have been using on-premise Enterprise Resource Planning (ERP) systems for a long time, throughout the last decade however, a new trend is emerging and the new reality is that the era of on-premise ERP systems is facing fierce competition nowadays.

Because companies need to move faster and are forced to be leaner, many of them have migrated their ERP to the cloud. Business owners are increasingly relying on cloud hosting when it comes to their enterprise resource planning.

But before we get going, you should know exactly what a cloud-based ERP is: It is a system that uses cloud computing platforms and services to help you store your data easier and complete tasks faster.

So yes, cloud ERP is popular, but the question is: Is it secure? How safe is it?

Security and fear of losing control

Like many other business owners, you’re probably worried about the security of your data. The threat of cyber-attacks is real, fortunately however, companies that rely on cloud-based ERP systems have increased protection against such threats.

It is ok to be skeptical, we get it. However, make sure you get the right information. There are huge headlines in the news when a company’s systems are compromised because of a cloud security breach. The most likely scenario we see play out though, is that breaches were a result of human error, and didn’t have much to do with the cloud infrastructure and security itself.

People need to understand who is responsible for which security measures in order to keep a company’s data safe. Keep in mind that cloud security requires a shared responsibility - cloud service providers are in charge of the security of the cloud, while cloud customers are responsible for their security inside the cloud.

Some businesses still don’t want to use a cloud-based ERP because they have this fear of losing control. Business owners have to realize that their data can be fully protected - cloud ERP has everything that’s needed to ensure a high level of safety and reliability.

Advantages of cloud ERP security

Cloud ERP comes with some great advantages in terms of security. First of all, it has its own protocols that automatically detect any suspicious activity, meaning that every shady intrusion is quickly flagged, analyzed and responded to based on well-defined data structures.

Another big advantage of cloud ERP security is the accessibility of security tools. Generally, for an extra fee, cloud service providers offer built-in security tools that can help you identify and resolve various network vulnerabilities, as well as give suggestions on how to strengthen your security independently of the ERP implementation.

Furthermore, the reputation of cloud service providers relies on the security of your data. Even though a data breach is not the fault of a cloud service provider in the vast majority of cases, the reputation is tarnished. This is the reason why CSPs have invested heavily in machine learning: To detect weak spots in your system and warn you promptly in case of a potential or ongoing attack.

The last advantage to mention is about the software updates in the cloud. For IT teams it is a real challenge to update the software. The problem is that if there are delays in installing updates, security vulnerabilities may occur - which in turn expose systems to attacks. On the other hand, when it comes to cloud ERPs, cloud providers are responsible for managing these software updates.

Disadvantages of cloud ERP security

Besides the above advantages, there are likewise security concerns that should be raised when using cloud-based ERP platforms. A notable disadvantage is the risk of data loss. For example, when a drive expires or stops working and the owner does not set up a backup of the files, well, data loss will occur. Usually, this problem appears when the owner of the encrypted data loses the key to unlock it. Therefore, make sure that your cloud provider has a suspension-period of data where it is archived and retrievable as opposed to irretrievably deleted.

Another disadvantage can be the insufficient security of internet channels through which the interaction with the cloud is happening. If there is a lack of appropriate protection, it can pose a threat to the security of your company. Hackers may steal passwords in order to access cloud systems.

As you can see, there are both pros and cons of cloud security, overall however, we can tell you that cloud ERP is a safe choice if it’s managed properly and run by responsible organizations. When you hear all kinds of news about cloud security, make sure to double-check the source-validity. All in all, cloud-based ERP systems are definitely worth a second look as they can be a game-changer for the way you conduct your business.