The words ‘SaaS’ and ‘compliance’ may not seem like a natural pairing given the ‘move fast and break things’ mentality in Silicon Valley.
However, worldwide spending on SaaS is set to grow annually by over 18%, and growth in the compliance space does not lag far behind.
This, according to MJD Advisors’ founder Mike DeKock, may not be a coincidence.
As the founder wrote in a recent article, “As strange as it may sound, compliance is an enabler of this growth.” While the rise of SaaS is increasingly making life easier for enterprises, being compliant may actually make sales and growth easier for these same businesses.
Here is where ‘compliance’ enters the story.
How compliance is serving as an amplifier for B2B sales
The world of enterprise procurement continues, to this day, to be unfamiliar to many.
Unbeknownst to many outside of Fortune 5000, before buying SaaS solutions companies often encourage vendors to demonstrate their ability to keep information safe from hackers, in particular with cybersecurity rising as a top concern for companies last year.
To those who don’t know: even with all of the resources being spent in the cybersecurity industry –the amount is projected to reach $215 billion in 2024– the number of cyberattacks continues to rise.
From sophisticated scams directed at everyday citizens to coordinated attacks on public sector institutions, cybercriminals have no end of digital targets to exploit in 2024. Security holds an important key in B2B.
A System and Organization Controls 2 (SOC 2) report demonstrates how compliance can add value. In this report a CPA (Certified Public Accountant) determines the data security measures of a SaaS company, in which auditors should help businesses showcase their commitment to best practices and safety.
An important part in this process is that it provides an opportunity to validate what professionals believe is important, security, and to hold them accountable to this standard.
According to DeKock, “CPA firms think of a SOC 2 report as telling a company’s security story. It’s about writing down a company’s steps to taking care of customer data in a way their clients can digest”.
This matters because as industries continue to evolve, the importance of the report will also grow.
A driving force for compliance
Last year malware rose by 11% to 6.06 billion — the highest volume since 2019. Additionally, cyberattacks have the potential to grind entire industries to a halt given how dependent we are on digital infrastructure. This was highlighted in the US in June when an attack on software provider CDK Global put 15,000 car dealerships out of action overnight.
This is why the founder of MJD Advisors understands that compliance, alongside security, needs to be a priority in 2024.
MJD Advisors is a CPA firm that is driving the space forward, in particular when it comes to SOC 2 examinations for tech startups and enterprises. In addition to SOC reporting, the firm provides additional services related to information security programs, taking care in assessing the risk factors of organizations.
The company was founded by CPA Mike DeKock, who is also a Board Member at the children’s charity Variety and is President of the Board of Directors at the West Des Moines Business Incubator. He is a Mentor at the University of Texas at Austin startup incubator.
With regard to the industry, DeKock said, “In the compliance world, we often hear business leaders say they’re worried about their operations getting halted or being slowed down by an audit. While the examination process used to be murky, it’s much more streamlined nowadays.”
“CPA firms taking advantage of compliance software to connect to a company’s operations means an audit doesn’t need to take such a large chunk of time, and businesses can keep their momentum,” added the entrepreneur.
This article includes a client of an Espacio portfolio company
