Innovative approaches to achieving SOC 2 compliance can save companies hundreds of hours
Achieving SOC 2 compliance can be massively beneficial to a company. It can boost market demand and customer trust by enhancing a firm’s reputation. It can also significantly decrease the likelihood of a data breach, which, according to IBM, costs US companies an average of $9.4M per incident. But these upsides come at a price: SOC 2 compliance can be expensive and time-consuming, especially if a company uses traditional approaches.
To help you navigate this important process, this article provides a complete breakdown of SOC 2 compliance costs via the traditional route — and explores a faster approach to getting certified.
How Much Does SOC 2 Compliance Cost?
What you’ll pay to achieve SOC 2 compliance varies depending on several factors, including the approach you use, the size of your organization, the complexity of your tech stack, the type of SOC 2 compliance you’re aiming for, the amount of preparation you do beforehand, and more. That said, the rough estimates below can give you a good sense of how much the process can cost for small companies taking a comprehensive, responsible, and traditional approach.
The typical total cost of SOC 2 Type 1 compliance:
- Total initial costs: preparation costs ($145K) + audit costs ($20K) = $165K
- Annual maintenance costs: total initial costs ($165K) * 40% = $66K
The typical total cost of SOC 2 Type 2 compliance:
- Total initial costs: preparation costs ($250K) + audit costs ($100K) = $350K
- Annual maintenance costs: total initial costs ($350K) * 40% = $140K
While these SOC 2 compliance costs are steep, these figures are only applicable to companies that choose the traditional approach. Newer approaches, made possible with DevSecOps automation platforms like DuploCloud, are helping companies save time and money on the road to SOC 2 compliance.
Are you SOC 2 compliant? SOC 2 is one of the most respected cybersecurity frameworks that service providers can be certified in, and our free checklist will walk you through each step:
How Long Does It Take to Get SOC 2 Compliance?
The time required to get SOC 2 compliance varies, but the most crucial consideration is the type of compliance. Because it only asks the auditors to assess a company’s customer data management practices at a single point in time, Type 1 compliance often takes only three to six months to achieve. Type 2 compliance, on the other hand, has a much longer evaluation window, so certification can take nine months to a year.
Ready to take your understanding of SOC 2 Compliance further? Check out The Complete Guide to SOC 2 Compliance.
Breaking Down SOC 2 Compliance Costs
The Cost of Preparing for a SOC 2 Audit
Preparing for a SOC 2 audit is often the most expensive part of the compliance process. As preparation isn’t required, some companies may be tempted to skip directly to the audit to save money. This strategy might appear to work initially but will invariably cost more in the long run as the costs of repeated attempts quickly add up.
From readiness assessments to security control revisions, here are the most important preparatory steps and their associated costs.
Internal expenses:
- Readiness assessment: Most companies hire a certified public accountant (CPA) firm to do a readiness assessment that analyzes its tech stack, maps out its processes, points out weaknesses, etc. so that the leadership can understand where they need to focus their efforts ahead of the audit. These assessments typically cost $15K — but can easily be more expensive if the firm has significant experience or brand recognition.
- Consultants: It’s also common for companies to hire a consultant to serve as the point person for the entire compliance project. A cybersecurity and infrastructure security agency (CISA) will charge around $200 an hour for its services. Companies can expect an even higher rate (over $500 an hour) if they use an outside chief information security officer (CISO). For Type 1 SOC 2 compliance, we recommend budgeting $75K for a consultant. That figure doubles for Type 2.
- Legal: Preparing for the audit also entails a fair amount of legal paperwork. The company must review and revise employee and customer contracts, data protection policies, vendor agreements, and more. It’s at least a few weeks of work and $10K in expenses.
External expenses
- Labor costs: If a company doesn’t hire a consultant to oversee the SOC 2 compliance process, they should appoint a senior leader who can drive the project from beginning to end — and give it all their time and attention during that span. An internal project lead will cost about as much as an outside consultant: $75K for Type 1 and $150K for Type 2. Other important labor costs include additional internal engineering, legal, and technical writing support that may be needed during the process.
- Infrastructural costs: Preparing for the audit involves many infrastructural costs, two of the most common being employee security training and security tools. Companies typically spend around $15K to host a security awareness training session. The cost of upgrading their security controls can vary wildly, but it's reasonable to budget $30K for Type 1 and $60K for Type 2.
Total preparation costs
- Type 1: Readiness assessment ($15K) + consultants/labor ($75K) + legal ($10K) + infrastructural ($45K) = $145K
- Type 2: Readiness assessment ($15K) + consultants/labor ($150K) + legal ($10K) + infrastructural ($75K) = $250K
How Much SOC 2 Audits Cost
How much the actual audit costs depends on the type of audit, the Trust Services Criteria the audit will cover, and company size. A small company with no more than 100 staff will likely have to pay $20K for a Type 1 and $100K for Type 2.
Total SOC 2 audit costs
- Type 1: $20K
- Type 2: $100K
SOC 2 Compliance Maintenance Costs
SOC 2 compliance reports generally expire a year after being issued, and small companies using the traditional route should expect annual maintenance to cost around 40% of whatever compliance cost them initially. These funds will often go to the SOC 2 compliance project lead’s salary, finding and training a new project lead if the previous employee left, updating security controls, providing additional staff security awareness education, and more.
Annual maintenance costs
- Type 1: total initial costs ($165K) * 40% = $66K
- Type 2: total initial costs ($350K) * 40% = $140K
A Cost-Saving Approach to SOC 2 Compliance
While some companies believe this expensive and time-consuming path is the only route to SOC 2 compliance, there are now better, faster, and cheaper ways to get certified. One of these innovative solutions is DuploCloud, a DevSecOps automation platform that helps organizations achieve out-of-the-box compliance in two of the three critical control areas: infrastructure security and customer controls. Interested? Contact us today for a demo.
