Building revenue can sometimes be directly linked to building efficiencies in your business. This is especially true in fast-paced industries such as technology, life sciences, and communications and media.
There are two areas in particular that can affect efficiency:
- Timely data. Give your organization access to data through an enterprise resource planning (ERP) or accounting system so management can make quick, consolidated decisions.
- Trust in controls. Build confidence with the integrity of your internal controls through a system and organization control (SOC) audit, which are commonly requested to test that data is protected, especially at start-ups.
Timely Data Is Essential
The better visibility business leaders have in the business, the faster they can move when they identify which areas are thriving and which need additional focus. With technology, forecasting, and operational planning tools, you can start to efficiently scale potential opportunities to build a competitive advantage instead of relying on guesswork.
However, accessing data to carry out that analysis or make quick, informed decisions isn’t always straightforward.
Start-up or emerging businesses don’t tend to invest their early dollars in back-office systems. When a business grows quickly, the systems often don’t have time to catch-up.
Challenges
In addition to a lack of early investment, many organizations use multiple ERP or accounting systems, which is often the result of mergers and acquisitions or when structuring a business across multiple legal entities. One of the biggest challenges for these organizations can be obtaining timely, consolidated views of their financial and operational data.
There’s also a common myth in the software market that large companies are content to stay with legacy solutions and won’t adopt newer cloud, mobile, or social solutions. The newer ERP solutions, the argument goes, only work for small and medium enterprises.
Navigate Shifts
However, both large and small enterprises are increasingly frustrated with their on-site technology vendors. Especially because these consumers know that, historically, few vendors are able to successfully navigate major architectural shifts.
To understand if it’s time to update your software, read: Need New Software? Choose the Right Vendor for Your Business Needs with These Steps.
Additional Insight
Trust Drives Revenue
Many service organizations depend on the integrity of their control environment to serve and protect both customers and business.
A SOC audit serves as an examination of internal controls related to information systems or transaction processing. When performed upfront, it can save time and resources in the end, particularly when it comes to responding to due diligence questions.
While these audits aren’t required, customers use the reports to reduce other due diligence procedures; and sophisticated customers often demand them to demonstrate if the controls in for their information systems are designed and operating effectively.
The higher the trust level, the more a service organization can focus on new opportunities and generating revenue.
Challenges
Integrity is complicated to secure with new technologies being unveiled at record speeds and the increased prevalence of third-party vendors. In fact, requests for SOC 2 audits—which evaluate an organization’s information systems relevant to security, availability, processing integrity, confidentiality, or privacy—are increasing in tandem with the IT industry’s growth.
For technology companies, the main issues driving adoption of SOC reporting include the following:
- Rapid rate of cloud adoption
- Cybersecurity threats
- Compliance involving the Cloud Security Alliance (CSA), International Organization for Standardization, and the National Institute of Standards and Technology
Changes to SOC 2 criteria may also render existing reports inadequate and introduce the need for additional controls not covered in previous SOC reports. This is especially true for SOC 2 reports with periods ending after December 15, 2018.
Build Confidence
A number of organizations requesting SOC audits are start-ups—emerging entities with five to 50 employees. While raising funds or going public, they’re looking to develop internal controls, set up a risk assessment infrastructure, or create sophisticated documentation controls. In these cases, issuing a SOC report can increase credibility and boost confidence in its management by validating an organization’s control environment.
New services within outsourcing arrangements that drive SOC adoption include the following:
- Software as a service (SaaS)
- Infrastructure as a service (IaaS)
- Platform as a service (PaaS)
- Cloud providers
What to Monitor
- Financial and performance history
- Security and availability safeguards
- Reliable processing integrity
- Confidential and private records
- Regulatory and operational compliance
- Compliance with service-level agreements
- Regular due diligence and monitoring
In essence, having a SOC report can help to build confidence between service organizations and clients, which in turn could affect revenue.
Additional Insight
Cybersecurity Note
A SOC audit can complement your cybersecurity and application security efforts when it comes to mitigating risk with your third-party vendors. Read more in Consider Third-Party Relationships When Setting Up Controls for Risk.
We’re Here to Help
For more insight on how these options can help you make more timely business decisions, build greater trust with customers, which can affect revenue, contact your Moss Adams professional.