If a small business CEO thinks about compliance, he or she might think it’s relegated to big businesses. Who else has the funding, the personnel, and of course, the time to attend to compliance? And does it really matter anyway? Who’s going to come after a small business that doesn’t have a compliance department or deep pockets to sue?
Unfortunately, that’s not the problem. The issue is that a small company has suppliers, customers, and colleagues who are all part of a larger value chain, stretching from supplier to manufacturer to reseller to customer. Every link in the chain communicates with at least one other link. Some of those links are tiny, some are huge. Sometimes the communication is a phone call. Sometimes it’s a wire transfer.
Small Company X may not be the target, but their Huge Customer Q is excellent prey! Remember, this is exactly how Target was hacked a few years back. For companies that think, “We’re too small to make a difference,” this example should serve as official notice.
But we’re a small company…
The value chain problem is old news at this point; we all know how hacks can “travel” from supplier to customer, and so forth.
What is new is the ability of a small company to meet compliance and security needs without having to hire employees, build a department, and trudge through the tiny details themselves. With new GRC tools built as SaaS platforms and priced affordably, it’s possible and relatively straight forward to implement. Add in Managed Service Providers (MSPs), Managed Security Service Providers (MSSPs), and make them affordable, and now you’re cooking with fire!
What’s it going to cost me?
So let’s get down to brass tacks: What does it cost to have my security, compliance, and IT handled for me? OK, remember, these are estimated numbers but here we go. MSP’s charge about $100 per person per month. That’s the rule of thumb, so it might be more costly for a complex environment or highly regulated systems.
MSSP charges are a lot more variable. If you want them to only monitor your firewall, that’s a few hundred bucks per month or less. If you want the provider to execute vulnerability scanning and policy review, help you plan your incident response, do forensics, etc., it can range from $2000 per month to $15k per month, or more, depending. But remember, a lot of those costs don’t increase incrementally as you grow; they might only tier when you hit 50 people, 100 people, 250 people, etc.
As for GRC platforms, some of them are built as shrink wrap, but the SaaS options are offered for as low as $20 per person per month.
Let’s forecast the costs for a 25 person company that’s using an MSP for outsourced IT, an MSSP for compliance policy review, vulnerability scanning and management, and a GRC platform that helps everybody get their compliance tasks and evidence handled.
25 people
MSP - $100 per month per person /25 people - $2500 per month
MSSP – Vulnerability scanning and management, Incident response hours, compliance - $4000 per month, flat rate
GRC - $20 per person per month /25 people - $500 per month
For approximately $7k a month, you can have your IT, IT security, compliance, and incident response handled. Add in another $10-15k for an annual penetration test and you end up at a yearly total of around $99,000, essentially the cost of a single employee. Because most full-time employees also require HR administration and benefits, you could be saving an additional 30% or so on taxes, healthcare, and insurance on top of the person’s salary. Effectively, one headcount cost will handle the majority of your compliance, security, and IT needs, and these programs will be managed by dedicated specialists.
OK, but are we really at risk?
If you’re running a small business you might be thinking, “That’s a chunk of change!” Remember, though, when Target was breached through their small HVAC vendor, it cost Target a lot more than $100,000. And I bet they stopped using that HVAC vendor, which equals a ton of lost revenue for the small company. That one breach might also have cost the HVAC vendor future business relationships. If they were thinking straight, though, once they were notified of their part in the breach they rushed to implement better security controls, bought cyber insurance, and contracted with outside partners to keep systems and compliance up to date. None of that is cheap, and it’s even more costly to add after the organization has already been affected (think: buying health insurance after a preexisting condition versus before).
When you realize that value chains are effectively one entity, all connected, all together, then making sure you’re protected helps not only the value chain you’re in now, but reduces the sales friction for all the value chains you could be in, for those new customers you’d like to conduct business with in the future. Working with suppliers in new verticals also becomes easier because your company can pass compliance and security questionnaires, plus your IT team (the MSP) keeps your technology up to date and within the scope of new regulations. More and more regulations are put in place every month; don’t fall behind.
What’s next?
If all of this sounds like a lot to digest and a huge financial burden, keep in mind that all of the solutions mentioned here are modular. This isn’t an “all or nothing” approach. If your business already employs an IT team, great, you might not need an MSP! Have a compliance officer? You might not need the GRC tool! Etc.
Of course, small businesses could always operate without any security or compliance management. Does anybody know what happened to the HVAC company that facilitated the Target breach? I think they’re actually still in business, but that’s surprising. The statistics tell us that over 70% of small businesses which suffer a cyber incident don’t remain in business.
The interconnectedness of the internet, payment systems, fulfillment houses, and suppliers means that all companies—not just big ones—need to meet basic standards, including minimum viable security and compliance. Value chains will want secure and compliant companies, and shun companies which aren’t.
Simple as that.
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