Lessons in SOC Implementation

• A past data breach is hurting their reputation and ability to win deals.

• State government contracts have IT flow-downs requiring mature operational controls.

• An increasing number of clients were public companies and were demanding SOC1 and SOC2 reports as part of their due diligence process, pressuring the company to implement SOC as a way to reduce their annual financial audit impact.

• Frequent requests to fill out security questionnaires were taxing their staff's time and resources, diverting focus from core business operations.

• Competitors with established SOC1 and SOC2 compliance were winning deals, putting the company at a disadvantage.

• Immature or lacking IT policies were causing business impacts, including data security vulnerabilities and compliance gaps.

• HR onboarding/offboarding processes were causing IT security gaps, increasing the risk of unauthorized access and data breaches."

To comprehensively assess these challenges and determine the best method for compliance, XYZ Finance engaged our fractional c-suite consulting practice. We conducted a thorough assessment, including:
 

1. Gap Analysis: Identifying the existing security gaps, compliance issues, and areas of concern.

2. Risk Assessment: Evaluating the potential risks and vulnerabilities in their data handling practices, including those related to IT policies and HR processes.

3. Regulatory Analysis: Determining the specific SOC1 and SOC2 requirements applicable to their business, taking into account customer demands and competitive pressures

Based on our assessment, we recommended and implemented the following plan:

1. Policy and Procedure Development: Creating robust security policies and procedures to address identified gaps, including IT policy maturity and HR processes.

2. Employee Training: Conduct training sessions to ensure all staff understood and adhered to the new policies, reducing the likelihood of security incidents.

3. Technology Upgrades: Implementing advanced security technologies, such as encryption and multi-factor authentication, to bolster data protection and address customer demands.

4. Streamlined Responses: Developing standardized responses to security questionnaires to reduce the burden on staff and improve response efficiency.

5. Ongoing Monitoring: Establishing continuous monitoring processes to track compliance, security, and HR-related IT security issues.

Results & Beneficial Outcomes - Following the implementation of SOC1 and SOC2 compliance measures:

1. Enhanced Client Confidence: The company regained client trust, leading to increased client retention and attracting new clients who demanded SOC reports.

2. Regulatory Compliance: The company successfully met all SOC1 and SOC2 requirements, ensuring continued operations without the risk of penalties or breach of state contracts. 

3. Reduced Security Risks: Security incidents and data breaches were significantly reduced, safeguarding sensitive information.

4. Competitive Advantage: Being SOC1 and SOC2 compliant gave the company a competitive edge, positioning them as a secure and trustworthy financial service provider, allowing them to compete effectively.

5. Efficient Responses: Streamlined responses to security questionnaires reduced the burden on staff, freeing up resources for other initiatives.

6. Improved IT Policies: Matured IT policies and streamlined HR processes reduced IT security gaps and compliance issues.

1. Start Minimal then add complexity/comprehensiveness - Your team may want to cover every possible control and all five trust services criteria when you can pass with three. Remember, you've never implemented SOC in this organization. If you choose a comprehensive SOC program out of the gate, prepare to fail your audit. Change management takes time, and habituation.

   • Lesson - Pick one type of SOC that you must have (1,2,3) and the minimal set of trust services criteria (3 of 5 is a good goal).

2. Don’t underestimate the staff load - So you hired a SOC auditor to help…you’re all good, right? Wrong!! SOC is a pandora’s box of crazy whack-a-mole. Once you define one policy, then you need to figure out how to track and document the policy to prove to the auditor that you are doing what you say you are doing. Oh and because one back office doesn’t talk to another system, you have to either connect the systems or develop manual procedures for employees to follow…and then follow up to make sure they are doing it. You need to assign staff that are already busy doing other things or hire and train more people to do it. And then comes the audit. You need to devote staff time to work with the auditors to grab the documentation and deposit it in the auditor’s system to get a good grade on your audit!

   • Lesson - Either reset your job descriptions for a few .25 FTE allocations from multiple departments to serve on the SOC committee or hire more staff. Next, after you hire a SOC auditor, hire an outside SOC implementation expert to guide you and your company to success. They’ll need executive authority to use the .25 FTE committee and your executive sponsorship to make it successful.

3. Automate, automate, automate - There are systems like Vanta (and name 3 more) that connect to all of your back office systems to monitor and automate your SOC compliance and to automate most of your audit. It is a deeper time commitment on the front end and then it is a huge time saver, employee distraction reducer, reduces SOC audit cost and time by 60%, and gives you executive visibility in real time.

   • Lesson - Otherwise, all of the above is a manual cluster-f%$# between multiple departments already 100% allocated to the growth and maintenance of the company. Good luck getting an audit done any time soon!