Maya, the CFO of a specialty food manufacturer, didn’t think much about ERP security—until her auditors did.
They flagged a few concerns: password sharing among users, delayed patches, and limited access logs in the company’s aging on-premise ERP system. Maya’s gut told her they’d been skating by—but as the list of vulnerabilities grew, so did her anxiety.
What if the next audit revealed something worse?
What if a breach made its way into the next board meeting?
Her IT team did what they could, but Maya realized the problem wasn’t them—it was the system. They were trying to stay ahead of modern cyber threats and growing ERP regulatory compliance demands with decade-old tools and manual processes.
And that’s the reality facing thousands of companies today. Leaders assume their systems are protected—until they’re not. What once felt like control is increasingly a liability.
That’s why the conversation around ERP security has shifted. It’s no longer just about protecting systems—it’s about protecting the business, its reputation, and its long-term viability.
Cloud ERP platforms like Microsoft Dynamics 365 Business Central offer more than convenience—they offer protection.
In this blog, I’ll explore the hidden weaknesses of on-prem ERP, the compliance challenges that catch leaders off guard, and how modern, cloud-based systems can reduce risk while keeping your operations resilient and audit-ready.
What Do You Mean by ERP Security?
When most people hear “ERP security,” they picture a password-protected login screen and maybe a stern warning about access control.
In reality, it’s much more than that.
ERP security is about safeguarding the core of your business: your financials, customer data, supply chain, inventory, and employee records—all in one system. It’s not just about who gets in. It’s about what happens once they do.
From encryption and user permissions to audit logs and monitoring, true ERP security is a multi-layered strategy. And even the strongest password won’t help if the system itself is a decade out of date.
That’s where the broader business risk comes in. A vulnerability in your ERP isn’t just an IT issue—it’s a compliance issue, a reputational risk, and potentially, a very expensive problem waiting to happen.
The Patch Management Problem with On-Prem ERP
One of the biggest challenges facing companies with on-prem ERP systems is keeping up with updates and security patches. It sounds simple.
In practice? Not so much.
Your team must track releases, schedule downtime, test compatibility, and install patches, all while juggling other fires. So, patches get delayed or skipped.
Each missed patch opens a door for cyber threats. And in today’s world, those threats aren’t teenagers in basements—they’re sophisticated criminal networks targeting exactly the kind of business data your ERP holds.
According to IDC, many organizations now consider cloud ERP systems more secure than traditional in-house deployments—precisely because they automate security tasks and keep protections up to date without relying on overburdened IT staff.
In other words, skipping updates doesn’t just raise eyebrows in IT. It raises red flags in the boardroom.
What Security Mechanisms Are Implemented in ERP?
Modern cloud ERP software like Microsoft Dynamics 365 Business Central comes with enterprise-grade protections built in—minus the makeshift security and wishful thinking.
Here’s what that typically includes:
- End-to-end encryption to protect sensitive data
- Role-based access control to limit what users can view and change
- Multi-factor authentication (MFA) to make stolen passwords less useful
- 24/7 threat monitoring and incident response
- Automatic updates and backups to ensure you’re always protected—no scheduling required
Now compare that to an on-prem system where updates depend on your team’s availability, and backups may live on a single local server (or someone’s external hard drive from 2015).
There’s a reason so many businesses are moving ERP to the cloud.
And here’s the kicker: Microsoft invests over a billion dollars annually in cloud security—far more than most businesses could implement on their own.
Their security overview makes it clear—ERP security isn’t something you have to manage alone anymore.
Compliance Risks in Legacy ERP Systems
Compliance isn’t just about avoiding fines—it’s about trust. Your customers, partners, and regulators expect your business to protect data and follow the rules, whether it’s SOX, HIPAA, GDPR, or industry-specific standards.
Unfortunately, legacy systems like Microsoft Dynamics GP or Microsoft Dynamics SL weren’t built for today’s compliance climate. Staying compliant often means layering on manual processes, third-party tools, or one-off workarounds. And when those systems reach end of life, updates and security patches slow down—or stop entirely. That’s a risky place to be.
Cloud-based ERP solutions like Dynamics 365 Business Central make ERP security and compliance easier to manage and maintain. Features like built-in audit trails, role-based permissions, and automated reporting reduce the manual effort required to stay in bounds. Regular updates keep your system aligned with current standards—without putting the burden on your internal team.
So if you’re asking, what is ERP in compliance?—it’s the assurance that your system helps you meet regulations, not scramble to catch up.
Why Moving ERP to the Cloud Reduces Risk
Moving from on-prem ERP to the cloud isn’t just about getting out of your server closet—it’s about reducing risk across the board.
Cloud ERP systems:
- Eliminate the need for manual patching and hardware upkeep
- Provide automatic failover and redundancy in case of disaster
- Ensure secure data access from anywhere
- Offer rapid recovery and minimal downtime after an incident
In short, cloud ERP security solutions give you resilience that’s hard to replicate on-site. And when the next audit, outage, or cyber incident comes knocking, you’ll be ready—not reactive.
The Real Cost of Staying On-Prem
On-prem might seem like the cheaper option—until you do the math on the hidden costs that add up over time:
- Hardware replacements and server upgrades
- Specialized IT staffing and maintenance
- Recovery costs from breaches or outages
- Lost productivity from downtime and manual workarounds
It’s easy to treat ERP maintenance like background noise—until it turns into a blaring alarm.
Meanwhile, cloud-based ERP solutions operate on a subscription model with predictable pricing and lower upfront investment. You get stronger security, less manual effort, and better ROI.
Maya’s company didn’t wait for a breach. Their decision to migrate came from realizing they couldn’t afford to wait for a breach. The cost of doing nothing had become greater than the cost of change.
A Smarter, Safer Path Forward
Your ERP system is too critical to leave vulnerable.
The decision to move to the cloud isn’t just about features—it’s about freeing your team to focus on the future instead of firefighting the past. Cloud ERP systems like Dynamics 365 Business Central deliver the protections, performance, and peace of mind modern businesses need to move forward securely.
Cloud ERP systems like Microsoft Dynamics 365 Business Central offer modern protection, automatic updates, and built-in compliance support that help businesses stay ahead of risk instead of constantly catching up.
Let’s talk about how ERP Global Solutions can help you modernize your ERP security and compliance strategy.
https://erpglobalsolutions.net/partners/
And if you’re thinking about Business Central, don’t miss my upcoming webinar!
About the Author
Sharon Conkey is a CPA, former CFO, and ERP consultant at ERP Global Solutions, LLC, bringing a rare blend of financial expertise and hands-on technical insight. Now, through her work with Microsoft Dynamics 365 and Dynamics SL, Sharon helps organizations build systems that don’t just function—they fit.
Her approach is grounded, human-centered, and informed by a career spent bridging the gap between finance and technology. She’s committed to making ERP more useful, more intuitive, and more aligned with the way people actually work.
Connect with Sharon on LinkedIn.