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Why Are ERP Updates Essential for Digital Security?

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Every 11 seconds, a business becomes a target to a ransomware attack. The damage from global cybercrime amounts to $16.4 billion a day in 2021 (Cybercrime Magazine). While 72% of all data breaches targeted large companies in 2020, an increasing number of small and midsize businesses are becoming victims of cyberattacks.

The growing number and cost of ransomware attacks make it obligatory for businesses to update their ERPs. Be it Oracle, SAP, Microsoft Dynamics, or a custom ERP system, keeping your ERP system up to date is crucial. They provide excellent entry points for cybercriminals.

Staying up to date with ERP upgrades generally requires dedicated developers specialized in ERP system and security nuances, who are experts not only in developing, but also maintaining and fine-tuning your ERP system to your specific business needs.

Investing more into your ERP system really pays off in the end: company software updates improve the overall health of your business, protecting it from cyber-attacks and improving productivity of your employees. Read on to learn why ERP updates are essential for a company's digital security.
 


Relevant ERP cybersecurity statistics:

  1. Germany spent $2.2 billion on cybersecurity in 2020 (Hiscox, 2020)
  2. 62% believe that their ERP systems have critical vulnerabilities despite patching (Statista, 2020)
  3. 1001 cases of data breaches were reported in the US in 2020 (Statista)
  4. The tech sector in the US faced 3.3 billion breaches and 158 incidents in 2020.
  5. Germany is listed among the countries with a high cyber attack vulnerability score of 9.39 (Comparitech, 2021)
  6. The cyber security market in Germany grew by 15% between 2018 ($6.8 billion) and 2020 ($7.87 billion) 
  7. Between May 2006 and June 2020 Germany faced 21 substantial cyber attacks.
  8. Companies with up to 1000 people on board spend around $133,000 per attack (Statista, 2020)
  9. In 2021, the cybersecurity spending is expected to exceed $1 trillion (Cybersecurity Ventures)
  10. The first ransomware attack in Germany was aimed at a healthcare facility (Cybercrime Magazine, 2020)

3 Major Reasons for Upgrading IT Systems in an Organisation

1. Software updates solve security flaws from previous versions

An unattended/legacy ERP is as good as none speaking security-wise. ERP systems are generally designed to store and manage critical operational data and confidential information like personal data and payment details. In light of recent governmental tightening of data protection legislation in the European Union (GDPR), it is especially important to include ERP system updates into your information security policy. 

Additionally, multiple governmental bodies worldwide such as Homeland Security’s National Cybersecurity and Communications Integration Center (NCCIC) have emphasized the vulnerability risk of ERP systems for planned exploitation in the coming years. To name one example in a modern setting would be for e-commerce companies to use outdated SSL-encryption when connecting their ERP system with marketplaces like Amazon or eBay. A successful exploitation would not only cause data theft, but might leave businesses facing fines resulting from regulators coming to the conclusion that data protection standards were not met. 

Don't make the mistake not to include your ERP System into your overall information security policy. Each new ERP upgrade offers protection from the already-known weak spots of your software system offering regular software updates, bug fixes, and patches.

2. ERP cybersecurity updates prepare companies for unpredictable events

No company exists in a vacuum which only means that tech, political, legal, and social factors can stimulate companies to implement changes at short notice.

That’s what happened in 2018 when all tech companies had to adjust their data storing policies according to GDPR. Some companies were prepared for GDPR requirements long before it came into effect which helped them to make ERP maintenance cheaper over time and meet the unpredicted events with zero stress.

3. Enterprise software upgrade allows a secure connection between ERP and complementary IT systems

Each additional IT system that you’ve integrated with your ERP has its own upgrades, patches, bug fixes that make collaboration between the two secure and stable.

When you don’t upgrade your ERP cybersecurity but the third-party IT system does, you increase your chances of becoming incompatible due to not meeting certain standards.

How Can I Invest in Cyber Security as Part of My ERP?

1. Consider hiring dedicated ERP developers

Your default ERP system provides only a basic-level of data security, so you’ll need a dedicated specialist familiar with the nuances and vulnerabilities of ERP Systems,  responsible for maintenance and the security of the ERP system.

If you still haven’t got a security officer or programmer to upgrade your business software, you can either hire them through an agency or delegate security-related functions to a cybersecurity vendor.

While using Oracle, SAP, or Microsoft ERPs, you can get help from their support but mind that additional ERP upgrades delivered by official providers are costly. Luckily, you can hire security engineers outside the official providers for reasonable remuneration. 

For example, if your company runs on Oracle ERP, you can hire a programmer who programs on C and has relevant experience in cybersecurity projects. The same goes for SAP — a Java developer will suffice. 

There are plenty of Java, C, C++, and other cybersecurity programmers in the world, and in some places you can get great code quality for moderate cost. For instance, the 2nd largest market in Eastern Europe — Ukraine had around 8K profiles on LinkedIn who indicated Java as their major programming language. And these are only the registered ones.

Number of programmers for ERP updates

Number of programmers for ERP updates

While hiring cybersecurity programmers not directly from an ERP solution provider, you can pick from the best available talents, not just those assigned to you and save up on each hour of development.

Hiring an Oracle programmer in the US for example costs around US$62 per hour with additional compensation reaching US$9000 on top.

To compare, the hourly rate of C programmers in Ukraine is around US$35-$45 and the quality of code is very high.

2. Pick the right cybersecurity vendor

If you decide to delegate the company software upgrade to a cybersecurity vendor, you should follow a simple check-list:

✔ Check security certifications

When you trust a vendor to upgrade your business software, you should make sure that they have any of the popular cybersecurity certificates. For instance, Daxx has ISO 9001:2015 and ISO 27001 certificates that guarantee that the company adheres to the latest international data security standards.

✔ Learn about the vendor’s physical security systems

Ask your vendor about the physical security systems such as surveillance, security guards, fingerprint scanners, and fire alarms. Also, make sure that people providing software upgrade services work in isolated spaces and don’t share them with the programmers from other projects.

✔ Clarify who has admin rights while upgrading IT systems in your organization 

A safer option is to work with such vendors as Daxx because you work with a team of dedicated developers who work directly for you. In this case, you decide who gets access to your ERP and who doesn’t.

But when you decide to fully delegate the ERP upgrade process to a project outsourcing vendor, the latter decides who receives the access because the service is fully run on their side.

Wonder how else you can bring cybersecurity to a new level? Read 9 more points in Checklist: How to Ensure Project Security in Remote IT Projects

3. Keep Your Software Up-to-Date at All Times

Make sure that the responsible programmers take good care of updating the newest patches of software. Why? Because the weak spots in your software increase the overall vulnerability of your ERP and are great entry points for hackers.

Software updates are usually done to fix any weak spots or bugs the developer has identified. If you are not automatically updating your ERP software, you are increasing your system’s vulnerability.

Again, we don’t recommend that you lay all hopes on software updates of the ERP solution provider. Be proactive and ensure that there’s a dedicated person who’ll take care of all necessary security testing and updates either on your side or on the provider’s.

4. Educate your employees about cybersecurity

Educate your employees about the basics of cybersecurity. It’s the cheapest and most effective way to avoid data leakage, damage of software and hardware, and finally the prestige of your business.

The majority of cyber-attacks are successful because employees use weak passwords and neglect the simplest security rules.

Make it a habit for your employees to change passwords regularly and create strong codes with digits and upper case.

5. Work with a private Cloud

It might be more expensive to use a private Cloud but it’s totally worth it. For one, when using a private Cloud, you can significantly limit the number of entry points for hacker attacks and, hence, predict how to defend your ERP from possible attacks.

ERP vendors can provide ongoing maintenance and support but your organization’s best bet for fighting cybercrime is hiring an independent ERP consultant who recognizes the importance of contingency planning and developing a solid IT strategy.

Conclusion

Upgrading all IT systems (not only your ERP systems) in an organization should be done on a regular basis. Neglecting the maintenance of your ERP system will make it more and more vulnerable to cyberattacks over time. Working with specialized ERP engineers and cybersecurity experts can prevent you from seeing your ERP System, one of the most prominent attack vectors for hackers and cybercriminals in the coming years, being exploited. And if you don't really know where to start, feel welcome to contact Daxx to get up and running with the necessary ERP system specialists to protect your business.

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Kateryna Kachkovska

Content Marketing Manager

Kateryna is a Content Marketing Manager at Daxx driven to help business owners make data-based decisions. Feel free to contact her with offers on content promotion and collaboration.

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