Just glance through the headlines of the last 2-3 years about enterprise software. You will definitely not miss reports of supply-chain attacks, software outages, or security threats (one after another) that companies faced in that period. But, it was a worldwide phenomenon, and it did not spare even the biggest players in this space.
ERP compliance – the new brutal truth
It’s a booming terrain. The global enterprise resource planning (ERP) software market is shooting sky-high from $167.33 billion in 2022 to $187.88 billion in 2023. It’s going to turn into a $294.34 billion market in 2027. But the ResearchandMarkets report highlighting this growth also reminds us that an increasing number of cyber-attacks could limit the growth of companies in the enterprise resource planning software market. These attacks on ERP applications can range from compromise to distributed denial of service (DDoS) attacks that damage the operations of businesses. Onapsis, an ERP cyber security and compliance firm, has also noted that SAP and Oracle have over 9,000 security vulnerabilities combined. As a result, ERP compliance is a harsh reality- not a footnote anymore in ERP decisions.
Supply-chain attacks rose by 42 percent in the United States in the first quarter of 2021, impacting up to seven million people, and security threats against industrial control systems (ICS) and operational technology (OT) more than tripled in 2020. It looks like hackers are becoming more systemic and discerning, shifting from distributed denial-of-service (DDoS) attacks and encryption of databases toward disruption of productive systems. Recently, the German government published an annual report highlighting how the cyber threat is shifting pronouncedly from the theft of data to the disruption of systems. Also, the US Department of Homeland Security has issued multiple warnings against cyberattacks targeting ERP systems.
With these signs of increased threat levels, ERP businesses have, understandably, invested more in hardening and protecting their systems. But companies may still be vulnerable because of a lack of focus, sufficient resourcing, or understanding about how best to address cyber issues. In addition, companies can tend to reduce investments in maintaining existing ERP systems, including cyber protections, in preparation for their migration.
Strict guidelines from the UK and French governments on Internet of Things (IoT) device manufacturers have also been observed to affect players in the ERP software market. More so, big ERP players try to find ways to integrate the latest technologies, including IoT and machine learning but face strict policies constraining the development of their products.
Then there’s the usual array of regulations- from HIPAA to GDPR to SOX to data privacy laws to product quality inspections to inventory audits to tax reporting. Regulations are also emerging and evolving rapidly to bolster efficiency and transparency in business operations, especially as ERP software typically deals with a high volume of data. Apart from security imperatives, players face new imperatives of government policies, regulatory adherence in ERP, and compliance management in ERP.
With the growth trajectory of cloud-based models for storing and accessing real-time data, analytical reporting for business decisions, and other convergence areas, we face a new world of complexity in regulations and concerns about data sovereignty, data control, and data localization.
As seen in Nucleus’ inaugural Enterprise ERP Value Matrix- which covers ERP vendors with a proven track record of servicing organizations with over $500 million in annual revenue, there is a rise in priority toward reliability, security, and compliance of their ERP systems. As a result, ERP compliance has become a complex and dynamic environment.
ERP – it is not the problem; it’s the solution
All this hints at the need to ensure you are on the right side of ERP compliance. At the same time, enterprises face new regulatory pressures in almost every vertical and region. That’s where ERP suites’ visibility, transparency, and control come to the fore- more robust than ever before. Your ERP should be cognizant as well as proactive on:
- Traceability of information
- Consistency of data for streamlined flows
- Control over critical business information
- Fast drill-downs as and when needed
- Realistic and honest picture of metrics that matter
- Data sourcing
- Data integrity
- Transparency and monitoring
- Data visibility
- Execution of data – in adherence to regulatory frameworks
- Data localization
- Data control and sharing
- Rules for first-party, second-party, and third-party data
- Integration with other business functions
- ERP’s scope over different geographies and jurisdictions
This is a necessary time to reconsider your ERP strategy regarding security and regulations. No matter how robust or advanced the software is, it will inject hidden fragility into your enterprise if it fails in these areas. A company should also set the necessary internal controls, authorizations, access permissions, and approvals for ERP usage to align well with the spirit of compliance. Take advantage of the expertise of the right partners that come equipped with years of execution footprint and a wide basket of experience in this aspect of enterprise resource planning (ERP). It would help if you took advantage of specialists in ERP compliance, government policies, and compliance management in enterprise resource planning (ERP).
Like Data for Decisions (DforD), which can allow you to be on top of information for regulatory compliance and internal control, here you can use data in a new and confident way. Because you get a grip on data for many areas at once:
- Tap the power of information exchange between stakeholders – driving action, minimizing document handling, reducing errors, and fast-tracking order fulfillment, inventory, and demands
- Get the right insights for individuals across the organization and simplify your enterprise-critical information
- Use data for fighting counterfeiting and fraud
- Pick the lens of high-level product traceability and authenticity for policy enforcement and Unauthorized Distribution Prevention
- Apply information to deter other stakeholders, like retailers, from engaging in unscrupulous activities
- Wield the precision of anti-counterfeit software algorithms and get an insight into the near real-time data along with the location
- Execute continuous monitoring through a unique, secure, and traceable identity applied as a QR Code
Enterprise resource planning (ERP) compliance is not just a checkbox. In the present era, it can be a make-or-break decision for your technological advantage. Pay attention to it with the proper guidance.