Renewal Management for Safeguarding Enterprises

Challenges in Today’s Business Environment

Balancing innovation, resilience, and cyber defense is a challenging task, especially amidst macroeconomic uncertainties. Organizations often face dilemmas regarding where to allocate resources, as squeezed budgets, internal pressures, and ever-changing priorities create a complex decision-making landscape. For many companies, financial restrictions often lead to the reprioritization of checklist items, like ERP renewal efforts, inadvertently exposing themselves to increased cybersecurity risks.

The Cybersecurity Risks of Delayed ERP Renewal

Late or delayed ERP renewal can pose significant cybersecurity risks. With ERPs becoming more integrated across a wider scope of businesses, they hold increasingly valuable data, making them attractive targets for cyberattacks. In an era where data breaches can have severe financial and reputational consequences, it’s essential to ensure the security and resilience of these systems.

Here is a list of recommended actions that organizations should consider to secure their ERP systems:

• Comprehensive Documentation: Maintain up-to-date documentation in an application that outlines the architecture, configurations, and integrations of the ERP system. This documentation acts as a crucial reference point for administrators and security teams.

   

• Interface Mapping: Map all interfaces and connections to and from the ERP system. Understanding the flow of data and interactions with other systems is essential for identifying potential vulnerabilities.

   

• User Flow Monitoring: Implement tools and procedures to monitor user activities within the ERP system. This helps in identifying any unusual behavior or unauthorized access, enabling quick response to potential security threats.

   

• User Access Control: Limit user access to only what is necessary for their roles and responsibilities (RBAC – role-based access control). Regularly review and update user access permissions to prevent unauthorized actions and reduce the risk of data breaches.

   

• Vulnerability Management: Develop a systematic approach to identify, manage, and update vulnerabilities within the ERP system. Regular patching and updates are essential to address security weaknesses effectively.

   

• Red Teaming: Conduct periodic red teaming exercises to simulate cyberattacks and test the ERP system’s resilience. This proactive approach helps in identifying and addressing weaknesses before malicious actors exploit them.

Act Now or Be Left Behind

Organizations that postpone renewal not only put their valuable data at risk but also place themselves at a disadvantage in the competitive landscape. Once the maintenance phase concludes, organizations may face additional expenses linked to security patches. Although these patches may still be offered by the system vendor, the onus of implementing them falls on a third party or the company itself, without direct vendor support. For widely recognized ERP systems like SAP, Oracle, or Microsoft, it’s relatively easier to find third-party vendors to assist with this task. However, when dealing with smaller ERP systems, the options become more limited, as third-party providers might be scarce. In such cases, companies must take the responsibility of patching into their own hands, possibly seeking support from different IT partners if they can find suitable ones.

When discussing ERP refresh with our clients, we’ve identified four key motivations for ERP renewal:

1. Control Tower for the Enterprise: Modern ERP systems serve as the central control tower for organizations. They manage critical workflows, data, process integrations, and business metrics. In an era where data-driven decision-making is paramount, a robust ERP system offers a single source of truth for essential data and processes.

2. Data Middleware: ERPs act as the new data middleware, establishing and enforcing data standards across the organization. This ensures data consistency and accuracy, which is vital for scaling data-driven initiatives and facilitating seamless data exchange and integration across various departments and systems.

3. Efficiency and Automation: ERP modernization allows organizations to achieve greater operational efficiencies. Modern ERP systems often come with native automation capabilities that streamline processes and reduce manual tasks, saving time and resources while improving overall productivity and accuracy.

4. Organizational Agility: In a dynamic business environment with frequent mergers and acquisitions (M&A), having a flexible and de-coupled ERP architecture is crucial. Modern ERPs can adapt to changing organizational structures and business needs, making it easier for companies to integrate newly acquired entities or divest parts of their business. This agility in ERP systems positions organizations to improve their merger and divestiture velocity, enabling faster and smoother transitions.

BCG Platinion’s Role in Navigating ERP Renewal

At BCG Platinion, we understand the importance of ERP security renewal, and our industry experts can help clients address these challenges. We specialize in guiding organizations through this critical process, ensuring that they can protect their valuable data assets.

Some best practice and recommendations for ERP security renewal include:

• Proactive Renewal Planning. Don’t wait until the last minute to renew your ERP security. Waiting until the last minute can lead to rushed decisions and potential vulnerabilities. When you develop a proactive renewal strategy, you take into consideration your organization’s long-term operational and financial goals. This involves assessing your current ERP system’s performance, identifying areas that need improvement, and aligning these improvements with your business objectives. Proactive planning also allows you to allocate resources and budgets effectively for the renewal process.

   

• Cybersecurity. ERP systems store and manage sensitive data, making them attractive targets for cyberattacks. Cybersecurity measures should encompass access control, data encryption, intrusion detection systems, and user authentication. As cyber threats constantly evolve, renewing your ERP security involves staying vigilant and adapting to the latest cybersecurity best practices to safeguard your organization’s valuable assets.

   

• Regular Updates. ERP systems are not static; they evolve over time, and so do the threats they face. Regular updates to your ERP system, including both software and security measures, are vital to address emerging threats and maintain the overall system’s functionality.

   

• Collaboration. Collaboration is key to successful ERP security renewal. Engaging with experts who have a deep understanding of ERP systems and cybersecurity is crucial. ERP systems are complex, and the intersection of business processes, technology, and security requires specialized knowledge.