Cloud ERP a Potential Threat?

Cloud ERP a Potential Threat?

Conventional ERP methods are Cloud Computing?  The most horrendous question to be answered. Though the potential threats are equal in their own ways, the risk factor that involves in the system differ. The cloud ERP is risky business and involves high levels of security issues when compared to the conventional method.

The possible and the potential threats:

Security Issues

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

Data Security

X

X

X

X

 

 

Data Authentication and Authorization

X

X

 

 

 

X

Architecture

 

X

X

X

 

X

Threats

X

X

X

X

X

X

Implementation of ERP

 

X

X

 

 

X

Network and Web Application security

X

X

X

X

 

X

Compliance and Legislation

X

X

X

X

X

X

Uptime, Availability and Reliability of the System

X

X

X

X

X

X

Data collected from semi-structured interview.  X refers to the existence of  security issues 

Common issues inherited from Conventional ERP and Cloud ERP

Data Security – It is the most common security issue raised by both conventional ERP users and as well by the cloud ERP users.  ERP providers on the other hand reckon that the end user is the weakest link when it comes to internal and external security issues.  Log files and back up of data were kept locally in the physical location but when it comes cloud computing, all the log files and the back up of data are kept in the cloud and it is the responsibility of the hosting provider to make that the log files and back up data are kept safe giving in room for no vulnerability. This is were the ERP providers should deliver transparency in SLA agreements to companies they implement.

Authentication and Authorization


Authentication and Authorization, perhaps can be a routine issue with the conventional ERP but the levels are different with the cloud ERP. Cloud ERPs trust the service providers and the chances of getting vulnerable or making benefits of the loss ends can result in business data loss thereby leading to potential loss to the company.

System Architecture

The architectural system of conventional ERP and Cloud ERP, differ totally which again is a big risk for the cloud computing business. Cloud ERP uses complex architecture, called multitenancy.  It is believed that the multitenancy make cloud ERP simpler than the conventional ERP systems.

New Issues

Network and Web Applications



The most potential security issue is the low-level security which is well comprehended by the end users. To eliminate those potential low-level security issues, following methods can be followed-

  • 2-factor authentication
  • PKI (Public Key Infrastructure)
  • VPN (Virtual Private Networks)
  • SSL & Secure Shell (SSH) etc.

On the other hand, the ERP providers can consider taking into account the following :

  • Intrusion Detection System (IDS)
  • Intrusion Prevention System (IPS)
  • Firewalls etc...

Compliance and Legal issues

Different countries have different legislation for data processing and regulations.  For instance, governmental organizations of Sweden prohibit personal and financial data outside Sweden’s border. 

Some of the common issues would be

- the internet connection and the critical components of the broadband connection that take time to update the events of files.

-          data centres

-          server farms and other real life experience

Still the answer cannot be whether conventional ERP or Cloud ERP is best.

 At the end of a panel at the World Economic Forum in Davos, Switzerland, where Eric Schmidt  comments were webcast, he was asked for his prediction on the future of the web. “I will answer very simply that the Internet will disappear,” Schmidt said.

“There will be so many IP addressesso many devices, sensors, things that you are wearing, things that you are interacting with that you won’t even sense it,” he explained. “It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room.”

Author : Sargunan Ranganathan

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