Preventing Data Disasters: A Guide to CPQ Security

CPQ (configure, price, quote) software gives companies the power to streamline their entire quote-to-cash process. Everything from product selection and pricing calculations to quoting, contracting, and invoicing happens within your CPQ system.

And the transition from on-prem to cloud-based systems has made modern CPQ flexible, scalable, and, depending on the system, enterprise-ready.

But, like any kind of software, there are serious security risks. With so much sensitive data about customers and their transactions, you need a CPQ system that’s secure from cyberattacks and data breaches.

In today’s article, we’ll dive into what CPQ security means, why you should care, and how to protect your data.

Understanding the data risks within CPQ solutions

To configure a product and build a quote, you first have to enter the customer’s personal data — names, addresses, and company info. And when they’re ready to buy, they’ll put their payment information and credit card details into the system.

To streamline the whole process, you’ll also integrate it with CRM and ERP, both of which will also have access to financial data, purchasing history, and customer info.

So, your CPQ solution has access to a lot of sensitive data from internal and external sources. And if it’s not protected, that data is vulnerable to cyberattacks.

What are the risks, you ask?

Unauthorized access

One of the most significant risks for any kind of system with sensitive data is unauthorized access. If a hacker gains access to your CPQ system, they can access all the data stored within it, potentially leading to identity theft or financial fraud.

This isn’t just an issue with hackers, though. It’s entirely possible (and common) for people within the organization to access data they aren’t supposed to. This could be due to negligence, lack of proper controls, or malicious intent.

Company information leaks

It’s not just customer information at risk. CPQ systems also often contain confidential company information, such as pricing strategies, product catalogs, and sales data. If this information falls into the wrong hands, it can lead to competitive disadvantages and loss of revenue.

Even if you have solid security measures in place to protect customer data, your own company’s confidential information (think: pricing strategies, product catalogs, and sales data) can also be compromised if access is granted to unauthorized individuals.

Data breaches and compliance issues

Data breaches can happen for various reasons:

• System vulnerabilities
• Human error
• Cyberattacks

According to IBM’s 2024 ‘Cost of a Data Breach’ report, the average breach costs businesses USD $4.88 million — a 10% increase over the previous year, and the highest ever recorded.

The reason: Breaches don’t just cause data loss. They result in hefty fines, legal battles, and loss of customer trust. And if your company deals with sensitive customer information (like healthcare or financial data), there are also compliance issues you have to consider.

Not to mention, if the data in question contains personally identifiable information (PII), you may also face compliance issues under laws like Europe’s GDPR or California’s CCPA.

Malware attacks

It’s always a possibility that someone within your organization might accidentally download malware or get duped into giving access to a hacker. It sounds unlikely, but it’s actually quite common for criminals to impersonate someone from a company and request information or access to systems.

Take Luxembourg-based carbon supplier Orion SA. They were hit by a business email compromise (BEC) attack that led to the loss of ~$60 million. And all the cybercriminals did was deceive an employee into making several wire transfers to fraudulent accounts.

Essential data security measures for CPQ systems

Now that we understand the potential risks associated with CPQ systems, it’s essential to take steps to protect your data and ensure the security of your system. Here are some measures you can take:

Access controls

Every reputable CPQ vendor will have role-based access control (RBAC) built into their system, which allows admins to limit who can access certain information within the system.

For instance:

• Sales reps are allowed to create and modify quotes, but they can only access the product catalog and customer profiles relevant to their region.
• Pricing managers have access to advanced pricing models and can approve discounts but are restricted from modifying customer details.
• Finance personnel can review and approve high-value quotes but cannot create or modify them.

This limits users to necessary data and functions for their specific tasks.

Multi-factor authentication (MFA)

Admins can implement multi-factor authentication (MFA) as part of access controls, which adds an extra layer of protection by requiring users to verify their identity through additional factors like a one-time password or fingerprint scan, before gaining access.

This makes it considerably harder to effectively hack into your company’s system because it requires multiple forms of identification.

Encryption

Encryption is the process of converting data into a code to prevent unauthorized access. You can apply it to data at rest (stored in databases) or data in transit (on the way from one system to another).

Encrypting data at rest

Encryption of data at rest means protecting inactive data stored on a device or server. That includes files, databases, and backups.

This is critical because data at rest is vulnerable to theft or exposure if the underlying systems are compromised.

In a CPQ system, encrypting stored customer contracts and pricing agreements ensures that even if a hacker or unauthorized employee breaches the database, they cannot view the sensitive pricing information or contracts without the decryption key.

Industries like healthcare and finance mandate encryption of data at rest to comply with GDPR, HIPAA, or PCI DSS.

Encrypting data in transit

Data in transit is moving from one location to another — e.g., between a user’s browser and the CPQ system — or between internal systems and cloud servers.

Encryption shields data from interception by unauthorized parties as it travels between systems, reducing the risk of eavesdropping or tampering. It also ensures data integrity by protecting it from unauthorized modifications—any alteration en route results in failed decryption.

For example, when a sales rep sends a quote to a customer through your CPQ system, Transport Layer Security (TLS) encryption ensures your quote data is secure during the transmission process, protecting it from being intercepted or altered by attackers.

Data backup and recovery

What if something does happen to your sensitive information?

You need somewhere to store your pricing configurations, contracts, and customer data. Otherwise, a disaster, hardware failure, or cyberattack will create severe financial and operational setbacks.

Regularly backing up your data means you always have a clean, recent copy to fall back on. Any of the abovementioned issues, you can recover from with minimal disruption. They also help you comply with data preservation mandates.

For mission-critical CPQ systems, establish a failover plan, where a secondary system can take over in case the primary system goes offline. This could involve using a cloud-based instance of the CPQ system that automatically activates when the primary one fails.

Note: When you’re backing up your data, make sure it’s encrypted both during transfer (if it’s being sent to a cloud or remote storage) and at rest in the backup location.

Employee training and awareness

Remember that no single measure guarantees complete safety. You have to complement these measures with adequate training.

A huge number of data breaches occur because employees accidentally compromise sensitive information. And these are all preventable.

Educate your team members on…

• Effectively handling sensitive information
• Spotting phishing attempts and other social engineering tactics
• Using the CPQ system safely
• Creating strong, unique passwords
• The importance of regular software updates and patches

It also helps to create a quick list of best practices they can refer to at any time.

Security features every CPQ system needs

We’ve touched on this a little in the previous section, but it’s worth highlighting some of the critical security features that every CPQ system should offer.

The following are completely non-negotiable when selecting a CPQ vendor:

1. Role-based access control (RBAC)

RBAC, as mentioned earlier, ensures employees only have access to necessary data and functions for their specific tasks. This significantly reduces the risk of unintentional exposure or misuse of sensitive information.

2. Multi-factor authentication (MFA)

Your CPQ system should require every user, especially admins, to verify their identity through at least two factors before gaining access. These could be a password, security question, or biometric scan.

3. Data encryption

Look for a CPQ system that offers both data at rest and in transit encryption. Look for TLS 1.2 or higher for data in transit and AES 256-bit encryption for data at rest.

4. Regular security audits and penetration testing

Penetration testing is where an expert tries to hack into your system. They find and report on vulnerabilities as they come up.

When you ask a vendor about security measures, they should be able to mention these tests specifically, tell you how often they perform them, and what the logistics behind them looks like.

5. Secure data storage

All your data should be stored in a secure environment with strict access controls and regular backup procedures in place. Ask a potential vendor where they store their data, what security protocols they have in place, and (if you operate in an area with strict data residency laws) whether they comply with regulations in your industry.

Also consider natural disasters and other emergencies. Where is your data backed up and how quickly can it be restored in the event of something like this?

6. Intrusion detection and prevention systems (IDPS)

IDPS is a type of security software that looks for malicious activity on a network or system and prevents it from causing harm. When choosing a CPQ vendor, ask whether they have an IDPS in place to detect and block cyberattacks.

7. Data loss prevention (DLP)

There should be additional guardrails for preventing data from being shared (accidentally or intentionally) outside your organization.

DLP tools monitor and prevent sensitive data from leaving your network, whether through email, file transfer, or other means. They’ll also flag unusual or unauthorized access attempts.

8. Regular software updates and patches

It’s impossible for a software vendor to know how often they’ll need to release an update, but you’ll want to look for a verifiable history of addressing security vulnerabilities with regular updates. You can find this information by checking a vendor’s release notes (if they’re available) or asking directly for them.

9. Incident response plan

This is more something you need to work out with your vendor, especially if you’re an enterprise company.

What happens if there’s a security breach? How will they handle it? Who is responsible for what during the process?

It may also be helpful to have your own internal incident response plan in place and ensure it aligns with your vendor’s plan. That way, everyone’s on the same page.

10. Compliance with data privacy regulations

These differ depending on where it is you do business. For instance, if you operate in the European Union, you’ll need to comply with GDPR. In the United States, there are various state and federal regulations to consider, like California’s CCPA and the Gramm-Leach-Bliley Act (GLBA).

Choosing a secure CPQ solution

Security’s no joke. If you don’t take it seriously (or your CPQ vendor doesn’t), serious consequences will follow.

So, how do you make sure you choose the right CPQ vendor?

First, determine your company’s unique security requirements. What is it that you need from a CPQ system to secure sensitive data and comply with regulations? Use this as a checklist when evaluating potential vendors.

Once you’ve got that sorted, start researching vendors and booking demos. Remember to ask specific questions about security features and measures. You can use the list above as a guide.

Simplify the CPQ selection process by using our comprehensive CPQ software reviews and product comparisons. In addition to security, we cover each vendor’s pricing, features, integrations, and customer support to give you a holistic idea of what you’re getting.