Ensuring Data Security in Retail ERP

Explore strategies to strengthen data security in retail ERP systems, safeguarding sensitive information and customer trust.

Retail ERP systems are typically integrated with other key business systems, including e?ommerce platforms, procurement and HR software, CRM, and POS tools. This turns them into centralized hubs for retail information, including customer information, payment data, purchase histories, customer preferences, and supply chain data, like information about stock levels and supplier details.


Data security should be one of a retailer’s top business priorities, as it allows them to comply with legal requirements, maintain consumer trust, and avoid reputational and financial losses. A 2023 IBM Security annual report states that the average data breach cost in the retail industry amounted to $2.96 million, and the most common types of compromised information are customer and employee personal identifiable information (PII). That is why, as a business entity, you should always keep in mind that you’re responsible for the security of data you collect.


Below, we enumerate the most common ERP data security issues and provide expert tips on how to protect your retail ERP system.


Common ERP security attacks


Phishing attacks


Phishing remains one of the easiest and most popular methods to get hold of sensitive data like employees' credentials that allow cybercriminals to enter the corporate ERP system. Such data breaches disrupt operational processes and lead to financial losses. Cybercriminals send emails that look genuine, pretending to be trusted sources like vendors, customers, or coworkers. These emails typically contain harmful links or files that, when clicked or opened, steal ERP login details or inject malware into the ERP software or the whole IT ecosystem. Hackers can also create fake login pages mimicking the ERP system and trick employees into entering their credentials.




Cybercriminals may exploit the vulnerabilities and weaknesses of the retail ERP’s security mechanisms to infect the system with malicious software that steals sensitive customer information, financial data, and intellectual property files stored in the system for sale or ransom. In case your ERP system comprises a financial and accounting module, cybercriminals can use malware to initiate fraudulent transactions that lead to financial losses or disrupt the normal functioning of ERP software, causing system downtime and hindering critical business processes.


Insider threats


While data breaches caused by malware or phishing attacks prevail for now, insider threats are slowly but steadily increasing in frequency. There are several types of insider threats:


  • Malicious insiders who aim to steal confidential data from the ERP system and harm the organization.
  • Employees unaware that their credentials have been compromised and used to get hold of valuable data.
  • Employees who accidentally disclose sensitive information due to negligence or lack of security awareness.


7 ways to secure your ERP system


Strong password policies and multifactor authentication


A strong password policy and multifactor authentication are essential to ensuring robust retail ERP security. A strong password policy requires employees to use complex passwords, prohibits the use of one password for multiple accounts, and mandates regular password changes to prevent compromise over time.


MFA is an extra layer of security requiring users to provide more than one form of authentication before accessing the ERP system. For instance, an ERP will first ask for login and password and then require an employee to enter a one-time password sent to their phone or authenticate their identity with biometrics. Multifactor authentication reduces the risk of unauthorized access and helps safeguard retail ERP data even if an employee's password is compromised.


Separation of Duties


To reduce the risks of insider threats or other security incidents, consider implementing a separation of duties (SOD) approach. The SOD term describes the practice of appointing more than one person responsible for a task or its completion. For instance, one employee cannot request a fund transfer within an ERP system without the approval of another authorized employee. This practice can significantly reduce the risks of fraud and data breaches in retail ERP.


Continuous monitoring


By continuously monitoring your ERP, you can detect suspicious activities within the system in real time and identify potential malicious insiders by observing and identifying concerning user behavior in the system. Carefully assessing and proactively managing a potential intentional or unintentional insider threat will help prevent possible security breaches and losses of valuable customer or financial information.


Create an incident response plan


A well-defined incident response plan in place will help you swiftly counter a breach or attempted attack and minimize potential damage. Such a plan should outline clear procedures for reporting suspected incidents, provide step-by-step actions on how to contain incidents or identified threats, and describe how to correctly restore affected services and data from backups, minimizing operational disruptions.


ERP security audits


Routine security audits help identify weaknesses in your ERP solution and proactively mitigate them, keeping your ERP and the data stored there safe. In particular, we recommend focusing on regular vulnerability assessment to identify and eliminate known weaknesses promptly. Retail companies should also conduct periodic penetration testing that simulates real-life cyberattacks and can reveal how effective your ERP security mechanisms are, allowing you to upgrade your ERP security strategy before any data breach occurs.


Regular software updates


Hackers are fast to exploit undiscovered software vulnerabilities, so regardless of whether you have an on-premises or cloud ERP system, it is crucial to update your ERP system or install newly released patches as soon as they are available.


Employee training


Employees in many organizations have a poor understanding of security policies, weak passwords, or total ignorance of cybersecurity attacks, and many of them don’t even realize that their actions can cause cybersecurity issues and place a retail business at risk. This is why retail companies need to invest in cybersecurity training for their employees to teach them to discern popular ERP cyberattacks, like phishing or malware injections.


In conclusion


Whether you are only considering implementing an ERP system into your retail business or have already adopted one, make data security your priority. A solid data security strategy can be expensive and complicated to establish, but the repercussions of sensitive customer or employee data breaches can cost you times more. In case you lack resources or relevant skills to ensure your ERP security, consider hiring third-party experts with experience in retail ERP systems and the security domain.

Leave comment

Your email address will not be published.

Your Name
Your Email
Your Comment

SelectedFirms © 2015 - 2024. All Rights Reserved.