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The SOC 2 Compliance Journey - The Business Case for SOC 2 (Part 1)

John Rogers
John Rogers

Co-Founder & Head of Operations

Table of Contents

Introduction

SaaS companies frequently struggle with the following decisions when starting the SOC 2 compliance journey.

  • The Business Case for SOC 2
  • Choose the Relevant Trust Service Criteria
  • Identify the Scope of SOC 2
  • Define the Timeline and Budget
  • Best practices in achieving a successful SOC2 compliance

SOC 2 explained: Trust Services & Reports

SOC 2 compliance is a framework designed to ensure service organizations manage and protect sensitive customer data. It’s based on five Trust Service Criteria (TSC) established by the American Institute of CPAs (AICPA). 

Here’s an overview:

Trust Service Criteria (TSC)

SOC 2 focuses on the following five principles to evaluate a company’s internal controls:

  • Security: Protecting against unauthorized access, both physical and logical.
  • Availability: Ensuring that systems are available for operation and use as agreed upon or needed.
  • Processing Integrity: Guarantee that system processing is complete, valid, accurate, timely, and authorized.
  • Confidentiality: Protecting confidential information from unauthorized access.
  • Privacy: Ensuring that personal information is collected, used, retained, and disclosed in conformity with privacy principles.
SOC 2 Reports

There are two types of SOC 2 reports:

  • Type I: This evaluates the design of a company’s controls at a specific point in time.
  • Type II: This assesses the operational effectiveness of those controls over a period (usually 6-12 months).

Key Business Drivers for SOC 2 Compliance

SOC 2 compliance empowers organizations to scale operations, attract investors, and effectively mitigate risks by establishing a robust security foundation, particularly for SaaS organizations. Ultimately, SOC 2 compliance plays a key role in safeguarding their future and driving overall business success. 

The following section explores different business cases for initiating SOC 2 compliance within your organization.

Building Client Trust and Assurance

Use Case: Assuring enterprise customers regarding the secure handling and protection of their sensitive data.

The procurement process often involves evaluating SaaS providers’ SOC 2 reports as part of their vendor due diligence. By adhering to SOC 2 compliance, it shows that your organization cares about protecting data belonging to clients. It is a third-party verification that your systems are secure, giving enterprise clients the confidence to trust you with sensitive information.

Ensuring Regulatory Compliance

Use Case: Expanding into regulated markets or entering into contracts with clients in industries that fall under strict data security legislation and privacy laws (GDPR, CCPA). For example, industries such as healthcare/medical (HIPAA), Fintech, Telecomm etc.

SOC 2 compliance gives you a framework for various regulatory requirements in your line of business. By setting your practices in line, you will be assured that you have smooth compliance with regional laws and industry-specific regulations, which may cut down on a number of potential penalties or legal issues.

Achieving Competitive Differentiation

Use Case: In a crowded SaaS market, demonstrating a robust security practice that is SOC 2 compliant can help win against competitors who don’t have such certifications.

In competitive markets, SOC 2 is more than just a technical credential. It’s a powerful differentiator. Emphasizing your compliance in sales conversations and marketing materials positions your organization as a trusted, secure partner.

Scaling and Supporting Growth

Use case: Investors or enterprise clients involved in partnerships, mergers, and acquisitions will seek assurance of mature running and security practices on data. Achieving SOC 2 compliance shows your commitment to these standards and positions your organization for accelerated growth.

SOC 2 compliance gives you a foundation for growth that will scale. From onboarding enterprise clients to exploring new partnerships to preparing for an IPO, it signals that your operations are ready. It instills investor confidence.

Improvement in Incident Response and Risk Mitigation

Use Case: Prevent data breaches or operational incidents from the past that could negatively impact customers, thus damaging the company’s brand reputation.

SOC 2 compliance places greater emphasis on proactive risk management, from monitoring threats to clear incident response procedures. So, the chances of a breach are at their minimum, and recovery is swift if there is an incident.

Conclusion

SOC 2 compliance transcends operational necessity; it serves as a strategic asset that cultivates trust, fuels growth, and enhances organizational resilience. Whether your goals involve scaling operations, expanding into new markets, or fulfilling client demands, achieving SOC 2 compliance empowers you to attain these critical business objectives while solidifying your organization’s reputation as a leader in security and reliability.
By embracing SOC 2 compliance, you’re not only safeguarding customer data but also safeguarding the future success of your organization.

Ready to take the next step on your SOC 2 compliance journey?

Now that you’ve explored the business case for SOC 2, the next step is figuring out which Trust Service Criteria make sense for your business. In our upcoming article, we’ll guide you through selecting the right criteria that align with your business goals and compliance needs.

Stick with us for the rest of this series—we’re here to make SOC 2 compliance as straightforward as possible.