When it comes to running a business, there’s a lot of things to take care of aside from improving the products and services. One of the most important things to take care of is IT compliance, especially if your business relies heavily on using technology to store sensitive data and run most of your operations.
So what exactly is IT compliance for? IT compliance is the set of practices and requirements for business operations that are used for enforcing security standards. IT compliance also serves as a legal requirement for certain industries like healthcare and finance. Non-compliance with common standards and laws usually results in serious consequences like profit loss or removal of license to operate a business.
What IT Compliance Is and Why It’s Important
IT compliance is more than just a list of “nice to have” items found on a company’s audit sheet – it’s a concern for many businesses and organizations in both the public and private sectors. It’s a set of digital practices and requirements that help ensure that the company’s processes and operations are secure. IT compliance is also a legal requirement and a security standard for some industries.
Following IT compliance standards help businesses operate smoothly and securely, which is why many of them invest huge parts of their budget in different IT solutions. According to the December 2020 survey by Hyperproof, about 54% of the participants predicted an increase in the total money spent on strengthening IT compliance and risk management.
To better understand what IT compliance is and why it’s important, here are other related things to know about:
Who Needs IT Compliance
IT compliance is required of almost all companies across all industries, but regulations and standards are especially strict for those that work with digital assets like finance and healthcare. Companies should consider the following important factors when planning IT solutions for compliance purposes:
- the industry in which it belongs
- the company’s size
- the office’s location
- the concerns of both existing and potential customers
Large companies and enterprises often have extensive IT concerns that require them to have a dedicated team for managing proper compliance and implementation. Most compliance standards that have applicable regulatory requirements are subjected to monitoring and random checks by supervisory authorities.
In some cases, companies might even need to prove how their IT structures and solutions meet the compliance requirements and other regulations. Some of the ways to do this are through penetration tests and reports created by external auditors.
Possible Consequences of Non-Compliance
Following IT compliance standards usually take up a huge part of the company’s budget, which is why some of them contemplate whether or not to adhere to the regulations. Some even think that the cost of non-compliance is way less than spending on the right technology and processes needed for IT compliance.
However, non-compliance can be detrimental to your business, as it can cause you to face unnecessary disruptions, fines and penalties, settlement costs, productivity losses, revenue losses, and even reputation damage if you continuously fail to meet IT compliance standards. These seemingly small losses can lead to bankruptcy, lawsuits, or worse, the closure of your business, especially if you delay following suit and complying with IT standards.
While it’s true that IT compliance used to be a set of simple “recommendations” for businesses, it has now evolved into something that companies should take seriously to avoid financial and legal consequences.
How Compliance Fits in the GRC
While IT compliance is already a broad topic in itself, it’s just one part of a greater scheme that ensures a company follows rules and regulations by the industry, government, and other recognized organizations. The scheme is known as GRC, which stands for:
- Governance – Before starting to follow compliance standards, companies should make controlled and directed plans first. Effective governance is all about setting the company’s direction, monitoring the achievements and developments, and evaluating all outcomes to improve them moving forward.
- Risk – There’s a lot of danger that comes with running a business, and this needs to be recognized and analyzed. Risk management allows the team to avoid problems or deal with damage control. Compliance helps companies find, analyze, and control the risks so they won’t have a huge negative impact on the company and the entire industry.
- Compliance – A properly-governed company that manages the different risks it faces is ready to evaluate how it complies with rules and regulations set by authorities. These standards aren’t simply there for show – companies should actively evaluate and manage their IT compliance every step of the way for smoother business operations.
The Difference Between IT Compliance and IT Security
IT compliance has some overlaps with IT security which makes both concepts easy to confuse with each other. Here’s a quick rundown of both concepts to help companies identify which kind of IT solutions they need to prepare:
|IT Security||IT Compliance|
|All IT solutions for improving security are for the sake of the company.||All efforts to meet IT compliance are for the satisfaction of a third party and the facilitation of business processes.|
|The main goal is to protect the company’s assets against constant cybersecurity threats.||The main goal is to fulfill business needs and activities.|
|IT security doesn’t end with installing anti-virus software and other types of protection against cyberattacks. It should be continuously maintained, monitored, and improved.||IT compliance is complete once the business meets the regulations and standards set by the third-party (government and/or authorities within the sector with which the business is associated).|
How IT Security and Compliance Work Together
Robust IT security systems go beyond simply checking the boxes of IT compliance. It should also be enough to protect the company’s assets against ever-evolving cyberattacks and malware. Concepts and strategies like user awareness training, multi-layered security systems, defense-in-depth, and other critical functions aren’t always covered by IT compliance, but they’re essential in keeping the company well protected.
Although IT compliance is usually seen as the bare minimum of IT security, this set of rules and regulations are actually useful on its own. Compliance helps boost the organization’s reputation and gain more prospects who are concerned with following the standards set by the government and other authorities. IT compliance also helps teams find the gaps in the current security programs, which would be easily missed if they weren’t listed on the compliance audit.
4 Common IT Compliance Standards and Regulations
Many compliance requirements come from laws and official regulations from authorities within an industry. Here are some of the most common types of IT compliance standards that companies should follow for operating their business:
General Data Protection Regulation (GDPR)
The General Data Protection Regulation (GDPR) is a set of regulations established by the European Union (EU) to protect the sensitive information of European citizens. Private companies, organizations, and other entities that handle different types of data about European citizens should comply with the GDPR.
All companies that want to perform business functions in the EU or handle the private information about EU citizens are required to follow the GDPR regardless of their original location. According to the GDPR, organizations must seek the permission of the EU citizen before collecting their data. They must also delete the collected information if the individual decides to opt out of the data collection.
Health Insurance Portability and Accountability Act (HIPAA)
HIPAA is the IT compliance standard that regulates how the medical information and other sensitive data of patients in the healthcare industry are handled. This ensures that the health data stays confidential and secure. HIPAA covers all aspects of data collection from collecting, storing, transferring, and accessing.
Here are the important standards that summarize HIPAA:
- Privacy regulations that ensure no healthcare information is disclosed without obtaining the patient’s consent first.
- Regulations about electronic protected health information (ePHI) assure that physical, technical, and administrative security measures are in place.
- Notifications guarantee that all relevant parties are informed in case breaches and other types of cyberattacks occur.
Payment Card Industry Data Security Standard (PCI DSS)
This IT compliance standard was created to regulate and protect financial card information. All entities that store, transmit, and handle the data of cash, credit, and debit card information are required to follow these standards.
PCI DSS compliance encourages transparency and promotes the trustworthiness of the entities that handle transactions using financial card information. It makes customers feel at ease knowing that their financial information is protected as they make purchases.
Sarbanes-Oxley Act (SOX)
The Sarbanes-Oxley Act fosters accurate and transparent disclosure of an individual, group, or organization’s financial information. It ensures that shareholders and the general public are given accurate information about initial public offerings (IPOs) and publicly traded companies.
IT compliance with SOX prevents accounting errors and fraudulent transactions. It also promotes the accuracy of corporate disclosure, which allows improvements in the quality of earning reports and streamlined business processes.
Let Abacus Handle Your IT Compliance and Solutions
Abacus makes it easy for businesses to operate smoothly and securely with different IT solutions. Our team of highly-skilled IT experts creates customized IT solutions for companies to help them with different IT compliance requirements as their businesses grow. From compliance to robust security systems, count on us at Abacus to give you comprehensive services programs perfect for your needs.
Learn more about the IT services we offer at Abacus by visiting our website today. You can also call us at (856) 505 – 6860 to book a consultation with the best IT experts in the state.