First, let’s start with something you may not realize: Achieving real and conscionable security through SOC 2 compliance has likely never been easier. Thousands of businesses are already turning security into a competitive differentiator. Getting SOC 2-certified is a meaningful way for businesses to establish trust and reassure their clients and partners that their sensitive information is secure. For this reason, and several others we'll dive into, organizations obtain SOC 2 reports earlier in their lifecycle than in previous years.
We recently teamed up with Armanino, a top 25 national audit and consulting firm with extensive experience performing SOC 2 Type 1 and Type 2 assessments, to hold the webinar “Zero to One: Building for SOC 2 Compliance.” In this blog post, we'll share the highlights, including the benefits of securing a SOC 2 compliance report, how companies can easily set a baseline security program in as little as 10 minutes, what a SOC 2 roadmap and audit process should look like, and more.
What is SOC 2?
Originally developed by the American Institute of Certified Public Accountants (AICPA), SOC 2 is an assessment procedure that evaluates the controls at a service organization, evaluating whether they securely manage customer data to protect both the organization's interests and the data privacy of its clients.
Passing a SOC 2 audit demonstrates to customers and partners that an organization has implemented the appropriate controls, security configurations, and internal policies to manage their organization and their data securely.
But what does a SOC 2 report look at, specifically?
The American Institute of CPAs established five categories, called Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Businesses can obtain a report evaluating any combination – or all – of the trust service principles, but Security is the default criteria. This allows for a great deal of flexibility in what you would like your report to cover. Addressing all five trust service criteria is the most robust demonstration of the efficiency and security of your organization’s internal controls, but it’s not necessary.
“From a building standpoint, it’s important to know that you don’t have to do all five at once. Most of the early-stage clients that VGS works with are just focused on Security – at least in the beginning, and that’s what their partners are generally looking for, too.”
-Jonathan Cordeau, Head of Product for VGS Control
Starting with the Security TSC functions as an excellent foundation for any business, covering how the organization protects its people, its technologies, and its environments. It lays a solid foundation for the other TSCs.
The different types of SOC 2 reports
Your organization can obtain either a SOC 2 Type 1 or Type 2 report, depending on the stage of its security posture. These report types only differ in the scope of time:
Type I: An evaluation of an organization's control design and whether or not controls are operating as they should at a specific point in time.
Type II: The same as Type 1, but over a defined period of time instead of at one specific point in time - typically 3, 6, or 12 months.
One helpful way of thinking about it is to imagine a Type 2 report as a marathon and a Type 1 report as a sprint. Still, both are auditing your organization's internal controls and security policies.
Jonathan shared that, “A Type 1 Report is like a sprint in that it is a quick flash of what a company is doing to get toward a singular state of properly functioning controls. A Type 2 Report demonstrates how the company will maintain that same level of compliance over time – which will include multiple examples throughout that prolonged period.”
What are the benefits of a SOC 2 report?
Businesses that go through auditing their security controls with a SOC 2 assessor enjoy several advantages compared to their counterparts who don’t take this extra step.
- Close deals: Customers want to know their data is protected. Providing prospects with validation that you take security compliance seriously goes a long way, and SOC 2 is one differentiator in winning deals.
- Competitive advantage: Facilitate trust with larger and heavily regulated customers and beat out the competition (there are many organizations that don't prioritize SOC 2).
- Road to regulatory compliance: The requirements for SOC 2 align with other frameworks (HIPAA, ISO 27001), and getting your certification can speed up your organization’s overall compliance efforts.
- Culture of security: Apart from SOC 2 being an investment in your organization’s sales and marketing, it also helps establish a baseline culture of security – which impacts future decision-making in all areas of your business.
- Reduce the likelihood of a data breach: Maybe most importantly, passing a SOC 2 audit is good risk management. It demonstrates that your systems are secure.
And of course, as with other types of compliance, like PCI, part of the upside that comes from SOC 2 attestation can be found in what you don’t get – like missing out on deals with larger potential clients or blocking partnerships.
Common challenges in the SOC 2 journey
Armanino has worked with countless businesses on their SOC 2 Reports, and organizations often face similar obstacles during their audit process.
Let’s take a look at two of the biggest areas where they face challenges:
For early-stage organizations, it’s common for founders to pull from their network and even their circle of friends to join their team. They’re often hiring people without job descriptions or a clear path to a specific future in the organization. For startups, with a ‘let’s all pitch in and get it done’ mentality, this works fine.
But as these organizations grow and compliance requirements creep in, they’re forced to make adjustments from a hiring perspective – and SOC 2 often shines a light on what changes need to be made. Does everyone at the organization have an identified role? Are they in the right role? Asking these questions at this point ensures that, as a company continues to grow, scaling operations becomes easier.
As a startup gets off the ground, they often scramble to quickly get the basics out of the way. The idea of formalizing everything can seem like an unnecessary additional burden. But as you’re building the foundation of your business, you’ll set yourself up for growth by implementing processes early.
“These things you’re putting in place with SOC 2 as an early-stage company aren’t going to stay the same as you grow, but it’s better to have something in place at this point than nothing at all.” - Joanna Martucci - Senior Manager, Risk Assurance and Advisory Services, Armanino
How to build for SOC 2 compliance
If you want to have opportunities to close more deals from the get-go, it’s important to build for SOC 2 compliance straight out of the gate and design your security program accordingly.
“For the most part, at least in the reports that I’ve been working on, Security, Availability, and Confidentiality are the three key TSCs. Security is a great place to start the entire process – if you already have security down, then it’s easier to understand the rest of the journey.” - Joanna.
Establishing a compliance program from day 1 is difficult and costly to do on your own, likely adding several months to your development timeline and often forcing you to bring on new team members to handle your SOC 2 audit preparation. This is simply the reality when it comes to do-it-yourself sensitive data protection. Meeting compliance requirements without any outside help is far from an easy endeavor.
Fortunately, businesses can fast-track this process and drastically lighten their workload by implementing a compliance automation platform, like VGS Control Compliance.
VGS accelerates audit-prep for SOC 2 assessment so that your business is ready 16 times more quickly, offering a clear path to completion of the necessary security standards so that your audit partner – like Armanino – can verify and certify a positive SOC 2 report faster than your competitors.
Many SOC 2 service providers are essentially just providing you with a checklist, whereas VGS offers you a SOC 2 partner – a platform designed from the ground up to actually make your job easier and frees up your team to work on what’s important for growing your business.
With VGS, your organization is setting up a foundation of compliance that makes it easy to scale without worrying about revisiting your data security infrastructure to make adjustments year after year when your compliance is ready for renewal. Your compliance status and security posture remain unchanged even when you add new products or features.
How to Get Started
Achieving SOC 2 compliance provides your organization with a number of advantages that will open up doors for new business, improve your information security posture, better protect your customers, and help you stand out in the marketplace.
Not only is SOC 2 an investment in your organization’s sales and marketing machine, but it’s also the foundation for a positive culture of security that will generate continued benefits as you scale your business.
Schedule a quick conversation with a VGS team member, and we will outline exactly what a SOC 2 roadmap should look like for your organization – and present you with all the available options you can take advantage of to get you there as quickly as possible.