Change can often be the bridge between challenge and opportunity. While sometimes seen as an obstacle to overcome, change presents organizations with the opportunity to improve established processes and move beyond outdated inefficiencies. Although it takes time, transitioning system and organization controls (SOC) service providers presents an opportunity for service organizations (SO) to take advantage of the benefits a new auditor provides while positioning themselves for the future. With the crucial role SOC reporting holds remaining compliant with regulations, it’s imperative that SOs have a SOC auditor who can meet their needs.
Why It Might Be Time for a Change
There are myriad reasons why an SO may consider changing service providers, such as the provider’s service quality, cost, and experience level. These are relatively straightforward issues for an SO to evaluate, but there are also other reasons that require a deeper consideration and may evolve over time.
For instance, as an SO grows, its audit needs are subject to change, and the current provider may no longer meet its needs. Along with that growth, the organization may begin seeking more prominent, larger customers who expect the SO to work with a larger auditor that has a more established reputation and geographical footprint. A larger firm may be better equipped to meet reporting requirements on an international scale as well as bring experience with a broader range of certifications. The SO can benefit from the economies of scale that could be possible in consolidating their compliance needs with a single provider. This “test once, apply many” approach can decrease audit fees and redundant audit requests to control owners.
Changes with the existing service provider can also lead to reconsiderations. Over time, audit quality may begin to decline and no longer meet expectations. That can also occur when auditors fail to keep up with changing regulations, or when communication between the SO and its provider breaks down and the working relationship between the two no longer feels transparent or collaborative.
The Chance for a Fresh Start
Determining whether to change providers is a decision that requires proactive consideration. Organizations should understand their needs and if the capabilities of potential service providers align with them. Organizations should also consider the potential downsides for making a decision that prioritizes cost but does not align with the expectations of their report users. One of the most important areas to look at is a service provider’s SOC reporting experience. As an SO grows and SOC compliance becomes a priority, working with a provider that has a dedicated SOC team and understands the nuances of the audit standards can help create a better overall process for the SO.
When considering a new service provider, organizations also need to evaluate the level of communication the prospective firm provides. An open desire to collaborate can help foster the relationship between an SO and service provider, leading to a better understanding of the business’s strategy and goals. Within that relationship building, service providers then have the opportunity to understand the SO’s existing controls and current state, leading to higher audit quality.
There are some advantages that come with starting from a blank slate as well. Rather than the situation being one of lost familiarity, new service providers can offer a fresh audit perspective — one that can help to move beyond old inefficiencies. In viewing the SO with a different lens, a new SOC auditor may identify issues that stand out but were previously unaddressed or missed.
Progress Takes Time
Seeing the benefits of switching to a new service provider isn’t as simple as flipping a switch. When an SO decides to begin working with another firm, it must account for the time it will take to onboard the new SOC auditor. To that end, the organization needs to look at when SOC reports are due and allow the auditor enough time to go through the learning curve of understanding the business. Further, the new firm won’t have the same historical knowledge that a prior auditor did, particularly if the old provider had a longstanding relationship with the SO.
A Foundation for Transition
Any provider transition is going to have challenges, but organizations can mitigate them with a comprehensive transition plan, which should address several critical areas:
- Establishing a project management function with SO and Auditor representation
- Creating a timeline with key milestones
- Planning for onsite vs. offsite audit expectations
- Confirming and aligning on scoping
- Clarifying audit methodology details (sampling, filesharing, walkthrough expectations, etc.)
- Agreeing upon communication protocols
- Defining roles and responsibilities of key stakeholders
- Outlining escalation procedures
- Providing feedback and continuous improvement
- Plan maintenance should be part of an ongoing dialog between the SO and SOC auditor, allowing for open communication and a cultivation of trust. Doing so can also help facilitate the transition process by bringing together important team members from both the SO and service provider so they can organically learn from one another and establish the necessary rapport to work effectively.
Change Is Not Synonymous With Challenge
When transitioning providers, organizations have the opportunity to assess their needs and what they want in a SOC auditor. Through planning and collaboration with a new provider, an SO and its auditor can work to meet compliance standards while identifying areas of future improvement, developing a strong relationship that can lead to enhanced controls and efficiencies.
Transitioning to a new auditor is more than just a change — it's a strategic move toward enhancing your organization's compliance and efficiency. Contact us today to discover how a fresh perspective can transform your SOC reporting and position your organization for success.