Why SOC 2 Compliance Matters for Security & Business Growth

(This is the second article in a two-part series about mitigating cybersecurity risks. Click here to see part one.)

In our last article, we discussed key considerations for mitigating cybersecurity risk for private equity firms. One of the most effective methods goes beyond internal security and offers a powerful advantage: achieving SOC 2 compliance. This independent assurance of robust IT controls strengthens your defenses and serves as a sales tool for attracting larger, more mature customers.

Security compliance. The term itself often evokes groans from senior management who worry about the cost. But what if compliance could be a win-win?  What if it could fulfill basic security requirements and be leveraged as a sales enabler? The truth is that many firms have the tools within their grasp but are missing out on the opportunity to best leverage their existing compliance efforts.

Let's explore how a SOC 2 report can help you unlock this potential and turn compliance into a competitive advantage.

Say Goodbye to Security Questionnaires

SOC 2 is most often associated with IT security questionnaires. These unique forms, submitted and usually required by your customers and vendors, inquire about the sufficiency of your IT controls. However, the pain point of these questionnaires is that each is tailored to the needs of each customer, and your IT department ends up spending untold hours answering redundant questions. Also, the number of questions is not light.

A recent Cyentia Institute study found that 84% of companies rely on security questionnaires to assess vendor IT security, with many exceeding 100 questions and, in some cases, even exceeding 1,000. Based upon this insight, it’s easy to see how IT can quickly become buried in non-value-added activities such as security questionnaires.

A solution to security questionnaires is obtaining a SOC 2. This independent auditor-generated report provides a standardized and verified assessment of an organization's security controls. A well-designed SOC 2 report can encompass the areas typically covered in security questionnaires, providing a single report to reuse for all customer and vendor requests. In addition, it carries greater weight due to the independent audit compared to a company’s self-assessment.

Ironically, the same Cynetia Institute study above shows that only 34% of risk management professionals find security questionnaires truly valuable (due to a lack of trust in the responses) despite the time required, underscoring the need for alternatives.

Have a SOC 2 report and still getting inundated with security questionnaires? Don’t fret. This is not an uncommon initial response from requestors, but it can often be alleviated by having the right conversation with them.

How SOC 2 Works as a Sales Enabler

Let’s look at a real-life scenario. A software-as-a-service (SaaS) technology company with 14 employees and $500 million in revenue had the opportunity to bid on a major sales deal with the world’s largest vehicle manufacturer. However, the manufacturer required SOC 2 compliance before proceeding with the deal. CBIZ quickly assisted the organization in achieving SOC 2 compliance, allowing it to secure a significant sales deal.

This scenario highlights how SOC 2 compliance goes beyond internal security — it can attract powerful deals with high-value clients.

Here's why achieving SOC 2 compliance goes beyond just internal security:

• Independent Assurance: For reasons described above, a SOC 2 provides added assurance that someone independent is attesting to the sufficiency of controls. Think of it this way: banks don’t lend money to individuals solely based on their loan applications. They verify the key data points themselves.
• IT Maturity: The fact that your organization has undergone a formal audit to assess your IT environment speaks volumes to your customers and vendors about how seriously you take compliance.
• Differentiator: You would be surprised, but many companies still defer to completing individual security questionnaires because they do not wish to invest in a SOC 2. While some might focus solely on the initial cost, a strong ROI argument can be made for SOC 2 compliance. It frees up IT resources for more strategic endeavors than constantly responding to individual security questionnaires. But even beyond ROI, having a SOC 2 report puts you ahead of competitors who lack this independent validation.

Next Steps

If you need assistance conducting a SOC 2 report or have questions about the process, connect with one of our professionals.