What is the impact of cyber security on procurement?

impact of cyber security on procurement

The procurement process needs additional technological resources to ensure appropriate risk mitigation

Up-to-date procurement processes include various technologies in order to streamline internal business operations. Companies use either enterprise resource planning (ERP) platforms or less sophisticated software, but what stands out most is that more and more digital tools are being used to manage procurement.  

As an organisation adds e-procurement tools to its digital ecosystem, cybersecurity becomes paramount to the procurement process. Not only is security important for protecting sensitive data, but also for mitigating the risks that become apparent in an ever-evolving and expanding supply chain. 

Let’s take a closer look at the impact of cyber security on procurement.  

The role technology plays 

Cloud and digitally-focused organisations aim to leverage automation to reduce operational costs associated with transactional processes. They also seek to increase support for cross-departmental needs and supplier management. 

The uptake of Software-as-a-Service (SaaS) procurement tools has allowed businesses worldwide to standardise processes across their enterprise and integrate multiple services more easily. This standardisation means that businesses are able to reduce the buying cycle time while improving the data necessary for analysing costs. However, cybersecurity weaknesses in the procurement process can lead to data breaches if not managed properly.  

Data breach risks in procurement

It has become apparent that many businesses just do not understand the depth of detail or information required in the procurement process. They also do not understand the extensive reach of the data breach risk. Whether hiring a contracted worker or adding new technology, the bigger the company’s supply chain the greater the risk.  

ERP platforms offer businesses more than just accounts payable and receivable. A wide range of assets are offered by cloud-based ERP solutions: 

  • Risk management 
  • Project management 
  • Supply chain management 
  • Procurement 
  • Financials 
  • Analytics 

Although normally associated with financial records and reporting, ERP solutions collect, store, and transmit far more information than they once did. They also include the following sensitive information: 

  • Account information 
  • Vendor names and addresses 
  • Enterprise tax information 
  • Account reconciliation data 

Businesses using cloud-based ERP solutions should always consider the impact on their own financial data as well as that of vendors and customers.  

Ensuring a more robust cybersecurity posture 

In order to secure procurement for a more sophisticated cybersecurity posture, businesses must adopt a robust vendor risk management program. It’s important to note here that ERP platforms are just one of the many cyber risks evident in the procurement process. In order to reduce these risks, businesses must incorporate the ERP solution alongside a robust vendor risk management program. 

IT collaboration 

When people ask, what is the impact of cyber security on procurement? Here is a good place to start. The procurement process needs additional technological resources to ensure appropriate cybersecurity risk mitigation. The IT and procurement teams must work in tandem to understand how the selected ERP platform fits within the business’s security program and technology focus. 

Risk assessment  

The ERP platform must become an integral part of your holistic security program and allow the IT team to pinpoint all the potential data breach risks. It’s important to outline the types of information the ERP platform will manage, who will access it, and from where. This will allow the team to have a better understanding of the potential endpoint security risks and enable them to secure the data. 

Due diligence 

In regard to the ERP platform, businesses must ensure that any cloud-based service takes basic network security preventative actions. Investing in organisational due diligence best practices is crucial in today’s digital age. Solutions, such as a risk rating platform, can turn vendor security into a more responsive, effective process through features like continuous risk monitoring and vendor assessments. Sophisticated security features will allow your organisation to monitor a complex attack surface, survey your environment for anomalies that could indicate a cyberattack, and ensure that you are complying with regulations.  

Data encryption 

Most ERP platforms utilise cloud-based connectors such as application programming interfaces (APIs) which allow communication between connectors. To ensure that the data passed between connection points isn’t infiltrated, IT teams must ensure that all data is encrypted when being shared. 

Continuously monitor cyber security procurement controls 

In order to secure an ERP deployment, businesses must focus on continuously monitoring their solution alongside any connected tools. Consider incorporating the following controls within your cybersecurity framework: 

  • Correctly configuring databases. 
  • Apply security updates in a timely manner. 
  • Mitigate potential cross-site scripting (XSS) or SQL injection attacks against the web application. 

Get in touch with RiskXchange to find out more about the impact of cyber security on procurement.