SOC 2 compliance does not have to be prohibitively expensive. Powerful new compliance technology makes SOC 2 more accessible to even smaller businesses and startups, who can use SOC 2 to gain a vital competitive edge. By automating many of the compliance processes, your company will spend much less time and money implementing SOC 2.
That said, implementing SOC 2 is an extensive, complex process that often involves your whole organization. SOC 2 compliance creates a foundation for future business success. And in the long term, the return on your investment is likely to be significant. But we also need to be realistic about the upfront costs involved.
The reality of SOC 2 compliance costs
For many organizations that store customer data in the cloud, SOC 2 compliance quickly becomes not just a “maybe” thing anymore. Without a SOC 2 report demonstrating your compliance, you can lose valuable business, as many customers will only proceed to do business with you if you are SOC 2 compliant. But the reality is, for many small organizations and technology startups, it becomes a little trickier with all the SOC 2 audit costs and resources involved in the process. Not only does the process demand major efforts from your employees, especially your security and compliance team, but there are also different costs involved. To help you understand SOC 2 compliance costs, let’s break down the process, step by step.
What will affect the cost of your SOC 2 audit?
Let’s start by pointing out that no two SOC 2 audits will cost the same. A range of factors ultimately will affect the total cost of the audit.
Size and scope
First, the cost of implementing SOC 2 will obviously depend on the size of the organization.
But the size of the organization isn’t the only thing that determines the scope of your SOC 2 project. Each organization chooses which of the five SOC 2 Trust Service Principles they will implement, in accordance with their relevant business operations (with Security being mandatory). Extending the scope of your SOC 2 compliance could, naturally, increase the cost.
Of course, the complexity of the company’s operations, and of the corresponding controls you will need to develop, will also have a significant impact on the ultimate cost of your audit.
Finally, there’s the decision to implement SOC 2 Type I or SOC 2 Type II. SOC 2 Type II is the more rigorous standard. However, the audit will also most likely be more costly.
Auditor and consultants
As we can see, much of the cost of an audit will be determined by the size, structure and operations of your organization, and the strategic choices made by management.
In addition, you will incur costs with regards to your chosen auditor, as well as any SOC 2 consultant, technologies and additional software you need to effectively implement SOC 2.
It’s important to think about these costs in terms of the value they offer, rather than simply thinking in terms of outlay. For example, a good auditor may be relatively expensive. But it’s critical that you choose an audit partner that has extensive experience in SOC 2 audits and in your organization’s particular field, will complete a thorough audit and provide valuable advice.
SOC 2 compliance costs
Preparing for a SOC 2 audit
Before the auditor actually assesses your SOC 2 compliance, there is an extensive preparation phase. This is arguably the most important part of the SOC 2 process.
The SOC 2 readiness process involves a readiness assessment. The readiness assessment includes a gap analysis to assess any information security shortcomings in your current systems and operations. This is followed by the remediation period, where you actually implement measures to close the gaps identified in the gap analysis. This is only one part of the preparation phase, there are a lot more tasks and documentation involved in becoming audit-ready.
For example, all employees need to undergo Security Awareness Training, costing organizations $2 500 in addition to auditor and consultant costs. Assistance with policy documentation and a risk assessment can also be additional costs in the readiness phase, costing around $8 000 and $2 000, respectively.
As Scytale CEO Meiran Galis explains, it’s all about finding a balance. “When it comes to preparing for SOC 2, you want to be as fast and efficient as possible without rushing the process. Too much haste and you risk making mistakes that will cost you down the line.”
Galis says the same principles apply to budgeting. “With the right advice and automation, you can really cut down the cost of compliance. But you also need to budget appropriately and not cut costs when it comes to really critical information security infrastructure and processes.”
Part of the preparatory phase will likely involve contracting with third-party providers. After all, many companies, particularly startups, lack an in-house compliance team. Part or all of the staff training may therefore depend on hiring SOC 2 consultants or experts. Hiring a third party SOC 2 consultant can cost your organization around $15 000.
Once you’ve done the hard work of getting your organization ready for audit, it’s time for the auditor to take over and make an expert assessment.
The scale and complexity of the audit (how large your organization is, the scope of the audit, and so on) will partly determine the cost.
Then there’s the basic fact that some auditors have a higher fee than others. Sometimes there’s a good reason for an auditor to charge more. They may be a prestigious firm or one of the ‘Big 4’ and thus their report will be highly regarded by customers and partners. Ultimately, there are at least two important factors when it comes to choosing an auditor. First, they must have the knowledge and experience to make an accurate, comprehensive and detailed report. And second, they need a good reputation (and must be a licensed CPA firm and AICPA approved).
Optimizing your audit budget is therefore not a question of minimizing the price but maximizing the value you get out of the process.
A SOC 2 audit generally costs companies in the range of $12,000 to $60,000, depending on the factors outlined above.
The cost of non-compliance
The cost of SOC 2 compliance needs to be balanced against the potential cost of failing to implement an effective information security process. Most obviously, customers want to know that you take their information seriously. Without SOC 2, you are at a serious competitive disadvantage. In many cases, SOC 2 compliance is part and parcel of the procurement process. Without SOC 2, you won’t qualify as a provider to many established businesses, especially on a global scale.
Potentially even more seriously, without a quality information security standard in place, your organization is at risk of a data breach or serious service disruption. The damage to your brand’s reputation in such a case can be catastrophic.
Securing SOC 2 compliance for less
What if we said startups can save $25,000 and over 300 hours on security compliance?
Implementing SOC 2 effectively means getting maximum value without cutting corners. Here’s where SOC 2 automation software makes all the difference.
Ultimately, automation software saves you time and money. Automation reduces the total costs of preparing for an audit. It saves companies thousands of dollars and hundreds of hours of audit preparation and completion, through automation as well as dedicated customer advisory. A built-in policy center, security awareness training, and readiness assessment mean you’re not paying third-party consultant fees. But that’s not all: as your employees are not bogged down in time-consuming manual processes, automation reduces the opportunity cost of compliance, freeing your key employees to do more productive work and not worry about the burdens of compliance. See how we saved our customers significant amounts of time and resources through smart compliance technology supported by a dedicated advisory team.