ERP Security Best Practices

1. Access Control: Protecting the Front Door

Access control determines who can log into your ERP system and what actions they can perform once inside. Weak access controls are the leading cause of both external breaches and internal data misuse.

Multi-Factor Authentication (MFA)

MFA requires users to verify their identity using two or more factors—typically something they know (password) and something they have (mobile device or hardware token). MFA blocks 99.9% of automated credential attacks.

• Enable MFA for all users, especially administrators and finance roles
• Use authenticator apps or hardware tokens rather than SMS for better security
• Require MFA for remote access and API connections
• Monitor and alert on MFA bypass attempts

Role-Based Access Control (RBAC)

RBAC assigns permissions based on job function rather than individual users. This approach simplifies administration, reduces errors, and enforces the principle of least privilege.

• Design roles around actual job responsibilities, not organizational hierarchy
• Separate duties for sensitive functions (e.g., invoice creation vs. payment approval)
• Review and certify user access quarterly to identify unused or excessive permissions
• Remove access immediately when employees change roles or leave the organization
• Implement approval workflows for elevated access requests

Password Policies

Strong password policies reduce the risk of credential-based attacks. Modern best practices emphasize password length over complexity and discourage frequent forced resets.

• Require minimum 12-character passwords (longer is better)
• Block common passwords and previously breached credentials
• Implement account lockout after repeated failed login attempts
• Use password managers to generate and store strong, unique passwords

2. Data Protection: Safeguarding Information at Rest and in Transit

Data protection ensures that even if attackers bypass access controls, they cannot read, modify, or destroy your business data. This requires encryption, backups, and recovery capabilities.

Encryption

Encryption converts data into unreadable format without the correct decryption key. Modern ERP platforms encrypt data both in transit (as it moves across networks) and at rest (when stored in databases).

• Verify that your ERP vendor encrypts data at rest using AES-256 or equivalent
• Ensure all connections use TLS 1.2 or higher for data in transit
• Encrypt sensitive fields (SSNs, credit card numbers, bank accounts) at the application layer
• Control and rotate encryption keys according to compliance requirements

Backup Strategy

Regular backups protect against ransomware, accidental deletion, corruption, and disaster scenarios. Your backup strategy should follow the 3-2-1 rule: 3 copies, 2 different media types, 1 offsite.

• Schedule automated daily backups with weekly full backups
• Store backups in geographically separate locations
• Test restoration procedures quarterly—untested backups are not backups
• Implement immutable backups that cannot be encrypted or deleted by ransomware
• Document recovery time objectives (RTO) and recovery point objectives (RPO)

Disaster Recovery & Business Continuity

Cloud ERP platforms typically include built-in disaster recovery, but you should understand and test these capabilities regularly.

• Review your vendor's disaster recovery SLA and failover procedures
• Conduct annual disaster recovery drills with key stakeholders
• Maintain documentation for manual processes during system outages
• Identify critical business processes and acceptable downtime thresholds

3. Monitoring & Auditing: Detecting and Investigating Security Events

Comprehensive audit trails and real-time monitoring enable you to detect suspicious activity, investigate incidents, and demonstrate compliance with regulatory requirements.

Audit Trail Requirements

Your ERP system should log all security-relevant events, including login attempts, permission changes, data modifications, and configuration updates.

• Enable audit logging for all financial transactions and master data changes
• Capture who made changes, what was changed, when it occurred, and from where
• Store audit logs in a tamper-proof location separate from the ERP database
• Retain audit logs according to regulatory requirements (typically 7+ years)
• Implement automated alerts for high-risk events (permission escalation, bulk exports)

Security Monitoring

Real-time monitoring identifies anomalies and potential threats before they cause significant damage.

• Monitor failed login attempts and unusual access patterns
• Alert on after-hours access by privileged users
• Track large data exports or unusual query patterns
• Monitor API usage and integration errors
• Review system configuration changes and permission grants

Regular Security Reviews

• Quarterly user access reviews and permission recertification
• Annual penetration testing or vulnerability assessments
• Semi-annual security configuration audits
• Regular review of vendor security certifications and compliance reports

4. Infrastructure Security: Protecting the Platform

Even with strong access controls and monitoring, your ERP security depends on the underlying infrastructure—servers, networks, databases, and hosting environments.

Cloud vs. On-Premise Security Responsibilities

Cloud ERP security follows a shared responsibility model. The vendor secures the infrastructure; you secure configuration, access, and data.

• Vendor responsibilities: Physical security, network infrastructure, OS patching, database security
• Your responsibilities: User access, role configuration, data encryption, integration security

Patch Management

Unpatched systems are among the most common entry points for attackers. Cloud ERP platforms typically handle patching automatically, but on-premise systems require disciplined patch management.

• Apply security patches within 30 days of vendor release
• Test