Different Types Of ERP Security Issues (Cyberattacks And Protection Tips)

Ignoring ERP security flaws can lead to:

Data breaches, exposing confidential corporate secrets, employee data and customer information.

Financial losses due to fraud or ransomware attacks.

Operational disruptions, causing downtime and inefficiency.

Legal consequences for failing to meet compliance regulations.

But, you cannot protect what you don’t know! Hence, to protect ERP systems, businesses must first understand the types of ERP security issues they face.

1. Lack of Security Settings

Many ERP systems come with default security settings that may not be sufficient for protecting sensitive data. Organisations often overlook the importance of customising these settings to enhance security.

Suppose an ERP system allows unrestricted access to all users by default. A new employee might inadvertently access confidential financial reports without proper clearance. So, such lapses are internal and adequate training is needed to resolve them.

2. Weak Authentication & Password Policies

Many businesses use simple or reused passwords, making it easy for attackers to gain access. Don’t be surprised to know that around 62% of mid and large organisations do not use multi-factor authentication. This has worsened the security gaps.

3. Network Security Vulnerabilities

Open network shares allow unauthorised users to access ERP files.

Weak firewalls or poorly segmented networks expose ERP systems to cyberattacks.

Hackers can intercept unencrypted ERP data transmitted over unsecured networks.

4. Improper Backup and Recovery Plans

Data migration and integrations are common for businesses. But, if there are inadequate backup and recovery plans in place, it can lead to significant data loss during events like system failures, cyberattacks, or natural disasters.

5. Outdated ERP Software & Unpatched Systems

Old ERP versions contain vulnerabilities that hackers can easily exploit. Many businesses fail to apply security patches on time, leaving systems open to attacks like ransomware infections, data theft, and system crashes.

6. Lack of Compliance & Regulatory Risks

ERP systems often handle sensitive information that is subject to various regulations, such as GDPR for personal data protection or HIPAA for healthcare information.

Failure to meet GDPR, HIPAA, or SOX regulations can lead to fines and lawsuits. Additionally, poor documentation and audit trails result in compliance violations.

Why Is ERP Security Critical For Businesses?

Automated ERP systems make everyday life easier for businesses by offering a unified system for all functions ranging from HR& payroll, recruitment, supply chain, marketing, finance management, and so on. Because they handle these many operations, ERPs become blind spots for hackers.

Many companies overlook ERP security, assuming firewalls and antivirus software are enough. The reality? ERP security requires multiple layers of protection.

Real-world examples of ERP security breaches

These incidents highlight the need for robust ERP security measures to protect business data and prevent operational disruptions.

2022 Ransomware Attack on a JBS: A global US meat and poultry manufacturer, JBS suffered a supply chain attack that shut down operations for days. They then paid $11 million ransom to hackers to protect customer data.

Marriott Guest Data Breach 2020: Hackers accessed 500 million guest data in one of its hotel chains. The hackers targeted the weak login credentials of two employees. Later that month, the breach was discovered, which compromised personal details like names, contact numbers, and loyalty account numbers.

SAP Exploit Leading to Data Theft: Hackers exploited unpatched vulnerabilities in an SAP ERP system - Application Business Application Programming (ABAP) code. This led them to gain access to payroll and financial records.

What Are The Causes Of ERP Security Vulnerabilities?

Several factors contribute to ERP security risks. They are:

Outdated software & lack of patches – Many businesses fail to update their ERP systems, leaving them vulnerable to exploits.

Weak authentication & access control – Poorly managed user permissions allow unauthorised access to sensitive data.

Human error & insider threats – Employees can unintentionally compromise security through phishing attacks or weak passwords.

Third-party integrations – Unsecured third-party apps connected to ERP systems can serve as entry points for hackers.

How Do Threat Actors Target ERP Systems?

Threat actors use multiple attack vectors to exploit ERP systems, including:

Phishing, malware, and ransomware.

Exploiting misconfigured ERP settings.

Social engineering tactics to gain unauthorised access.

How Does Access Control Affect ERP Security?

Managing user access is crucial to ERP security. Poorly implemented privilege management increases risks by allowing unauthorised users to manipulate sensitive data.

Strategies for Strong Access Control:

Enforce role-based access control (RBAC).

Implement multi-factor authentication (MFA).

Regularly review and update user permissions.

What Are Insider Threats In ERP Systems?

Not all ERP threats come from hackers. Insider threats—whether accidental or intentional—are just as dangerous.

Insider threats occur due to these three main reasons:

Negligence – Clicking phishing links or using weak passwords.

Data theft – Employees stealing customer or financial data before leaving a job.

Misconfigurations – IT staff unintentionally exposing sensitive ERP settings.

Here are some steps that you can take to reduce such insider risks:

Conduct security awareness training for employees.

Set up data monitoring to track suspicious ERP activities.

Restrict access for departing employees immediately.

How Can Data Security And Compliance Be Ensured In ERP?

Encryption is the way out for all ERP security issues. Even if hackers access your system, encryption ensures that the stolen data remains unreadable.

Thus, end-to-end encryption protects data both in transit (when being transferred) and at rest (when stored).

Best practices include:

Encrypting sensitive data both at rest and in transit.

Using secure storage solutions to prevent unauthorised access.

Implementing compliance policies.

What Are The Compliance Concerns In ERP Security?

ERP systems must comply with various industry standards, including:

GDPR – Protects customer privacy and mandates data protection measures.

HIPAA – Governs sensitive healthcare data.

SOX – Requires financial transparency and secure audit logs.

Failing to meet these standards can result in hefty fines and reputational damage.

What Are The Network Security Issues In ERP?

Network security plays a crucial role in ERP protection. Common risks include:

Open network shares that expose sensitive data.

Weak firewall configurations that allow unauthorised access.

Unsegmented networks, making it easier for attackers to move laterally within systems.

Solutions:

Implement network segmentation to isolate critical ERP systems.

Encrypt data transmission to prevent eavesdropping.

Use intrusion detection systems (IDS) to monitor suspicious activity.

What Are SQL Injection And Malware Threats In ERP?

SQL Injection (SQLi) is one of the most common yet devastating cyberattacks that target databases. It occurs when an attacker inserts malicious SQL code into a database query via an input field, such as a login form or a search bar. Once executed, this code can:

Leak sensitive data – business records, customer information, and financial details.

Modify or delete records – Entire data entries can be altered or erased.

Gain administrative access – Attackers can manipulate user credentials.

Example: How SQL Injection Works

Let’s say your ERP system asks users to input their username and password to log in. A normal database query might look like this:

SELECT * FROM users WHERE username = 'admin' AND password = 'password123';

Now, imagine an attacker inputs the following:

admin' OR '1'='1' –

SELECT * FROM users WHERE username = 'admin' OR '1'='1';

Since 1=1 is always true, the database grants access—without needing a valid password! Just like that, a hacker can infiltrate your ERP system.

Now, coming to malware. It is also a huge threat to ERP security. Unlike SQL injections, which manipulate databases directly, malware infects the system through malicious software.

Some of the most common ERP-targeted malware includes:

Ransomware – The JBS case we saw above, where hackers demand a ransom for decryption.

Spyware – Secretly records keystrokes and steals login credentials.

Trojans – Disguised as legitimate ERP updates but install malicious software in the background.

Conclusion

ERP security is not optional—it's a necessity for businesses. By understanding these ERP security issues, companies can take proactive steps to safeguard their systems and sensitive information.

Meanwhile, working with your ERP vendor can help reduce the risk of ERP data threats even further. That’s where Eklavya steps in. Choose us for:

Advanced security features including encryption & MFA.

Real-time threat monitoring for proactive defense.

Seamless compliance with GDPR, HIPAA, and other regulations.

Secure your business today— Get started with Eklavya ERP!