Security and compliance are among the most important factors manufacturers evaluate when considering changes to their core systems. As production environments become more connected and data volumes grow, manufacturers must ensure that sensitive operational, financial, and customer information is protected while also meeting industry and regulatory requirements.
For organizations assessing cloud ERP solutions, the evaluation typically goes beyond functionality and cost. Security controls, data governance, and compliance capabilities play a central role in determining whether a cloud-based platform can support manufacturing operations responsibly.
Below are 8 key security and compliance considerations manufacturers commonly review during the evaluation process.
1. Data Access Controls and User Permissions
Manufacturing environments involve multiple roles, from shop floor operators to engineers, planners, and finance teams. Without proper access controls, sensitive data can be exposed to unauthorized users.
Cloud ERP platforms are often evaluated for their ability to:
- Define role-based access permissions
- Restrict access to sensitive financial or engineering data
- Support approval workflows for critical actions
When implemented as part of a broader manufacturing software system, strong access controls help reduce internal security risks while maintaining operational efficiency.
2. Data Encryption and Secure Transmission
Manufacturers frequently manage proprietary designs, customer data, and financial information within their systems. Ensuring that this data is protected both at rest and in transit is a fundamental security requirement.
Cloud ERP solutions are typically assessed based on:
- Encryption standards used for stored data
- Secure communication protocols for data transmission
- Protection against unauthorized interception
These safeguards help manufacturers reduce the risk of data breaches and unauthorized access.
3. Compliance With Industry and Regulatory Standards
Manufacturers may be subject to a range of compliance requirements depending on their industry, customers, and geographic footprint. These may include data protection regulations, financial reporting standards, or customer-specific compliance obligations.
When evaluating cloud erp solutions, manufacturers often consider:
- Support for regulatory compliance reporting
- Audit trails for system activity
- Documentation and controls that support audits
Compliance capabilities are particularly important for manufacturers working with regulated customers or operating across multiple regions.
4. Data Residency and Hosting Transparency
Data residency requirements can vary by region and industry. Manufacturers often need clarity on where their data is stored and how it is managed.
Cloud ERP evaluations commonly include questions around:
- Data center locations
- Regional hosting options
- Compliance with local data protection regulations
Understanding these factors helps manufacturers ensure alignment with internal policies and external regulatory expectations.
5. System Availability and Business Continuity
Manufacturing operations depend on system availability. Downtime can disrupt production schedules, delay shipments, and impact customer commitments.
Cloud ERP platforms are typically assessed for:
- System uptime guarantees
- Redundancy and failover mechanisms
- Disaster recovery and backup procedures
From a risk management perspective, manufacturers often compare these capabilities against existing on-premise environments.
6. Monitoring, Logging, and Audit Capabilities
Security is not only about prevention, but also about detection and accountability. Manufacturers need visibility into system activity to identify potential issues and support audits.
Cloud ERP solutions are commonly reviewed for:
- Detailed system logs and activity tracking
- User action histories
- Tools that support internal and external audits
These capabilities help manufacturers maintain accountability and respond more effectively to security incidents.
7. Vendor Security Practices and Certifications
Beyond the software itself, manufacturers also assess the security posture of the ERP provider. This includes reviewing how the vendor manages infrastructure, updates, and security controls.
Evaluation criteria often include:
- Security certifications and standards
- Regular security testing and updates
- Clear documentation of security practices
For manufacturers comparing different manufacturing software platforms, vendor transparency around security is a key trust factor.
8. Integration Security With Other Systems
Manufacturing ERP systems rarely operate in isolation. They often integrate with shop floor systems, suppliers, customers, and third-party applications.
Manufacturers typically assess:
- How integrations are secured
- Whether APIs follow security best practices
- Controls for data exchange between systems
Secure integrations help ensure that expanding system connectivity does not introduce new vulnerabilities.
Sum Up
Security and compliance considerations are central to any cloud ERP evaluation in manufacturing. By examining access controls, data protection, regulatory alignment, and vendor practices, manufacturers can better assess whether a cloud-based platform meets both operational and governance requirements.
For organizations in the evaluation stage, understanding these considerations helps ensure that decisions around cloud ERP adoption support not only efficiency and scalability, but also long-term risk management and compliance objectives.
