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Data Security in ERP – Are Products Like Microsoft Dynamics NAV Safer On-Premise or in the Cloud?


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The majority of mainstream ERP solutions, such as Microsoft Dynamics NAV, were originally developed for on-premise deployment. However, with the growth in demand for online or cloud-based applications, vendors and business partners are increasingly offering traditional on-premise ERP solutions ‘in the cloud’.

Using ERP products hosted in the cloud can deliver a wide variety of benefits to businesses. For example, the cloud version of Microsoft Dynamics NAV has almost identical functionality to Microsoft Dynamics NAV on-premise. Being cloud-based it will reduce your IT infrastructure and resource costs. In addition, it’s priced per user per month, you can vary the number of users, it’s fast and has world class service level agreements.

Advantages such as these alone don’t necessarily make ERP in the cloud the right choice for all businesses, and there’s a lot more to consider when choosing an ERP solution. However, some of the most common concerns we come across about  Microsoft Dynamics NAV online or in the cloud (as opposed to on-premise) are based on worries around data security.

Concerns over data security in cloud-based ERP systems, and holding the key financial and business information contained within them “offsite”, are natural. From customer details to product costing and manufacturing information, this is highly sensitive information that you don’t want getting into the wrong hands. 

So just how secure are products like Microsoft Dynamics NAV when deployed in the cloud?

The answer may come as a surprise to many: usually the security of partner hosted ERP solutions such as Microsoft Dynamics NAV in the cloud is actually stronger than the security of on-premise deployments.

Most modern accounts and ERP software packages include comprehensive security features. However security also relies on effective IT infrastructure, systems, and procedures.

The security of Microsoft Dynamics NAV in the cloud includes advanced and reliable data protection and back-up with powerful protection against security breaches and data leakage. For most partner hosted Microsoft Dynamics NAV deployments, these are well over and above minimum legal or ‘best practice’ requirements. They’ll comply with national or international data laws, and typically be certified to standards such as SAS 70 type II (which means a thorough independent investigation has been carried out to confirm that appropriate procedures and controls are in place). The actual data centres themselves are typically housed in purpose-built complexes with extremely robust physical security and procedures, much more than usually applied to an on-premise server in a small or medium sized business.

Because Microsoft Dynamics NAV is a fully integrated ERP solution containing financial, accounting, management and business information, security has to be a priority. With traditional on-premise ERP deployments the responsibility for security, with its increasingly sophisticated threats and issues, is with the users, administrators and IT staff within the client organization. With ERP in the cloud, although the responsibility for security is not entirely taken away from the client, the onus is much more on the hosting partner. And because they have specialist skills, staff, equipment, software and resources dedicated to security (it’s their business to do so), cloud ERP solutions are often safer than a lot of on-premise deployments.

As cloud technology continues to develop, more ERP partners and vendors will provide online or SaaS versions of their systems. Rather than a reason not to investigate ERP in the cloud, the high levels of security should actually be a reason to consider it.

For independent advice about ERP software, or to find out more about Microsoft Dynamics NAV (in the cloud as well as on-premise) please contact Concentrix TSG

By Concentrix TSG Ltd – independent UK ERP and CRM software specialists

One Response to “Data Security in ERP – Are Products Like Microsoft Dynamics NAV Safer On-Premise or in the Cloud?”

  1. Karen Wevick says:

    Good information. Security in a hosted environment should generally be higher than in a in-house installation. An especially good choice for companies that don’t otherwise need to have or manage a SQL environment.