Electronic Data Interchange (EDI) has revolutionized the way trading partners exchange information, turning supply chain processes that once took days or even weeks into a matter of minutes — or less.
But with this speed and efficiency comes serious risk. As more businesses adopt EDI solutions, cybercriminals are increasingly aware of the valuable data they send and receive.
With massive amounts of sensitive information flowing continuously between partners, whether it’s a few miles down the road or halfway around the world, the need to protect EDI data from ever-evolving threats has never been more urgent.
In this guide, we’ll explain the common EDI security challenges companies face today and share strategies that you can put to work now to help safeguard your business.
What Is EDI Security?
Imagine your company needs to send a purchase order to a supplier. Without EDI, you’d print the order, mail it, and wait for a response. With EDI, however, companies can exchange this information instantly and electronically. But with that speed comes the need for security. EDI security ensures that the data exchanged between businesses stays protected from unauthorized access and cyberattacks.
To keep data safe, businesses rely on tools like authentication, encryption, and access control:
Authentication ensures that only authorized users can access the system. It verifies the identities of both parties involved in the EDI transaction using methods such as passwords, security tokens, or digital certificates.
Encryption protects the data by converting sensitive information into a unique code only authorized parties can decrypt and read. This way, even if someone intercepts the data, they can’t access its contents.
Access control limits who can view or modify specific data. By setting permissions and restrictions, businesses ensure that only the right people can access sensitive information.
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EDI offers unparalleled efficiency and speed in data exchange, but it also presents several security challenges. Without the right precautions in place, vulnerabilities can quickly turn into costly problems. Below are some of the most common security issues in EDI and how to address them:
1. Overworked EDI Systems
When EDI systems are overloaded with data — especially when processing volumes beyond their designed capacity for extended periods — they’re more likely to become a security risk. The strain of handling more data than the system can handle can lead to degraded performance, which results in system crashes, slower processing speeds, and unexpected downtimes. Consequently, overworked systems might:
Fail to enforce critical security protocols like authentication or encryption.
Become more susceptible to Denial of Service (DoS) attacks.
Experience delays in transactions due to backlogs, increasing the chances of errors and late submissions.
2. Data Leaks
Similar to other types of data leaks, EDI data leaks occur when sensitive business information is exposed to unauthorized parties during electronic transmission. EDI data leaks can happen for several reasons, including:
Lack of proper encryption during transmission that leaves data vulnerable.
Poorly defined access controls that allow unauthorized users to access sensitive data.
Partners with insufficient security measures in place, which increases the risk of exposure.
EDI data leaks can severely damage business relationships and lead to regulatory penalties under data protection laws like HIPAA or GDPR. Implementing preventive measures like end-to-end encryption and strict access controls is crucial to safeguarding against these leaks.
3. Human Error
Many consider human error one of the most underestimated security risks in EDI systems, often because they’re seen as unavoidable or inconsequential. However, even minor mistakes can have a major impact. Common examples include:
Improper security configurations that leave the EDI system exposed to cyber-attacks.
Ignoring critical security patches that address known weak spots.
Mistakes during data entry, such as sending incorrect data to the wrong recipients.
To minimize the chance of human error, consider training staff on cloud data security practices and implementing automated error-detection systems.
4. Outdated EDI Standards
Older standards often struggle to support modern security features like encryption and may contain known weaknesses that hackers can exploit. That's why it's important to regularly update EDI standards to ensure compatibility with the latest security protocols, keeping the system secure and less susceptible to attacks.
5. Third-Party Risks
When businesses rely on third-party vendors, the security of their data is only as strong as the vendor’s security measures. Poorly managed vendor systems can create several security gaps, such as unauthorized subcontractor access to data and weak infrastructure security. Be sure to vet vendors carefully for compliance with industry standards, including security clauses in vendor contracts and conducting regular security audits.
6. Lack of Encryption
There’s no question about it: When sending data across EDI networks, it absolutely must be encrypted. It’s not just about protecting your data but also safeguarding your partners’ information. And it’s the law.
Here’s what could happen without it:
Data interception: Without encryption, anyone can intercept data mid-transmission. It’s anyone’s for the taking.
Regulatory violations: Laws like the General Data Protection Regulation (GDPR) in the European Union and the Health Insurance Portability and Accountability Act (HIPAA) in the United States require encryption to protect citizens' private data. Skip it, and you could face steep fines.
7 Best Practices for Ensuring EDI Security and Compliance
The most secure EDI strategies involve a multi-layered approach. Here are seven practices to consider:
1. Encryption
If it wasn’t obvious by now, we can’t stress this enough: Encryption is one of the most effective ways to protect data during transmission between trading partners. Even if a hacker intercepts the data, they won’t be able to read it without the decryption key.
When implementing an encryption protocol, consider AS2, TLS, or AES — they're among the most secure.
2. Data Backup and Recovery
Having a recovery plan that you've tested multiple times and performing regular data backups are two proactive ways to keep your EDI system safe. Backups protect against system failures, accidental deletions, and ransomware attacks. After all, better safe than sorry, right?
Store backups in secure offsite locations and ensure they are encrypted to protect your data. Automate the backup process and regularly test recovery procedures to maintain the reliability and integrity of your data.
3. Access Controls
Implementing effective access control policies allows businesses to limit who can view or edit sensitive EDI data. Restricting unnecessary access minimizes the risk of both intentional and accidental breaches.
Use role-based access controls based on employees’ job responsibilities and two-factor authentication (2FA) or multi-factor authentication (MFA) for an added layer of protection.
4. Employee Training
Remember, staff training plays a huge part in reducing security risks, as human error is often the root cause of vulnerabilities. By equipping your team with the knowledge to recognize potential breaches and follow proper data protection protocols, you reduce the chances of incidents.
Regular training sessions prepare employees to handle EDI systems securely and respond appropriately if necessary.
5. Risk Management
A strong risk management program helps businesses proactively address vulnerabilities in their EDI systems. Identifying potential threats before they escalate into breaches is another wise approach to staying safe.
Conduct routine risk assessments and use real-time monitoring tools to help detect and respond to suspicious activity promptly.
6. Secure Network Configurations
Proper network configurations go hand in hand with secure EDI systems. Misconfigured networks present a significant risk, as they can create easy entry points for hackers.
To protect your data during transmission, use security tools like firewalls and VPNs. Keeping your EDI system separate from other parts of the network can also help limit damage in case of a breach.
7. Patch Management and Continuous Software Update
Updating EDI software regularly is critical for closing security gaps. Timely software updates and security patches protect against newly discovered vulnerabilities.
Establish a consistent update schedule, monitor for urgent patches, and test them in a controlled environment before deployment to prevent disruptions to your systems.
Partner with an EDI Provider That’s Got Your Back
EDI security isn’t just about being prepared for cybercrime and knowing what to do should, unfortunately, happen. It’s also about preventing it before it happens. A trusted EDI partner helps keep your sensitive data secure on all fronts.
Connect with an EDI expert today and discover how cloud-based EDI solutions protect against evolving threats and data breaches