With the rising dependency of businesses on Software-as-a-Service (SaaS) applications to carry out their operations, it has become more crucial than ever to guarantee that these applications are compliant with industry standards and regulations. Non-compliance can lead to severe consequences such as legal liabilities, hefty fines, and damage to the reputation of the organisation. This blog post focuses on how businesses can effectively evaluate SaaS vendors for compliance with industry standards and regulations. By doing so, businesses can ensure the security of their data and also comply with regulatory requirements.

1. Start with Your Compliance Requirements

The first step in evaluating a SaaS vendor for compliance with industry standards and regulations is to identify your compliance requirements. This means understanding the regulatory landscape and the specific regulations that apply to your industry and business. For example, if you operate in the healthcare industry, you'll need to comply with the Health Insurance Portability and Accountability Act (HIPAA), which outlines data privacy and security requirements for protected health information (PHI). Similarly, if you process credit card transactions, you'll need to comply with the Payment Card Industry Data Security Standard (PCI DSS).

Once you've identified your compliance requirements, you can begin evaluating SaaS vendors to ensure that they meet those requirements.

2. Ask for Certifications and Audit Reports

SaaS vendors should be able to provide certifications and audit reports that demonstrate compliance with industry standards and regulations. These certifications and reports provide independent verification that the vendor has implemented the necessary controls and safeguards to protect sensitive data and comply with regulations.

For example, a SaaS vendor that stores and processes PHI should be able to provide a HIPAA compliance certificate or audit report. Similarly, a SaaS vendor that processes credit card transactions should be able to provide a PCI DSS compliance certificate or audit report. Ask for these certifications and reports as part of your vendor evaluation process.

3. Review Security Controls

In addition to certifications and audit reports, you should also review the security controls that the SaaS vendor has implemented. This includes physical, technical, and administrative controls that are designed to protect sensitive data from unauthorised access, use, disclosure, modification, or destruction.

Physical controls include measures such as secure data centres, access controls, and environmental controls. Technical controls include measures such as encryption, firewalls, and intrusion detection and prevention systems. Administrative controls include measures such as security policies, training, and incident response plans.

Ask the SaaS vendor for information about their security controls and how they are implemented. You may also want to conduct your own security assessments, such as penetration testing or vulnerability scans, to verify the effectiveness of these controls.

4. Evaluate Data Privacy and Governance

Data privacy and governance are also critical factors to consider when evaluating SaaS vendors for compliance with industry standards and regulations. This includes understanding how the vendor collects, uses, stores, and shares data, as well as their policies and procedures for data governance.

Ask the SaaS vendor for information about their data privacy and governance practices, including their data retention policies, data access controls, and data breach notification procedures. You should also review the vendor's privacy policy and terms of service to ensure that they align with your organisation's privacy and data governance requirements.

5. Consider Third-Party Risk Management

It is important to consider the third-party risk associated with the SaaS vendor. This includes understanding the vendor's dependencies on other third-party service providers and their policies and procedures for managing third-party risk.

Ask the SaaS vendor for information about their third-party risk management practices, including their due diligence process for selecting and monitoring third-party service providers. You should also review the vendor's contracts with third-party service providers to ensure that they include appropriate provisions for data privacy and security.

6. Assess the Vendor's Disaster Recovery Plan

Another critical factor to consider when evaluating SaaS vendors is their disaster recovery plan. A disaster recovery plan outlines how the vendor will ensure business continuity in the event of a disaster or unforeseen event. It should include processes for data backup, recovery, and restoration.

When assessing the vendor's disaster recovery plan, consider factors such as recovery time objectives (RTOs) and recovery point objectives (RPOs). These metrics determine how quickly the vendor can restore their service after an outage and the amount of data that may be lost during the outage.

7. Evaluate the Vendor's Customer Support

When evaluating a SaaS vendor, customer support should not be overlooked. Inevitably, at some point, you or your team may need to reach out to the vendor for support or assistance. Hence, it's crucial to evaluate the vendor's customer support channels, response times, and availability.

Consider factors such as whether the vendor provides 24/7 support, the average response time for support queries, and the quality of the vendor's support documentation. Furthermore, evaluate the vendor's communication channels, such as phone, email, or chat, to determine which works best for your team.

8. Consider the Vendor's Roadmap and Future Plans

Finally, when evaluating a SaaS vendor, it's important to consider their roadmap and future plans. A vendor's roadmap outlines their plans for future development, updates, and features. By evaluating a vendor's roadmap, you can determine if their future plans align with your business's goals and requirements.

Furthermore, consider factors such as the vendor's financial stability, their plans for expansion, and their ability to adapt to changing market conditions. By evaluating these factors, you can determine if the vendor is a good long-term partner for your business.

Conclusion

Selecting a SaaS vendor is a crucial decision for businesses. By considering the factors outlined in this article, you can evaluate SaaS vendors effectively and choose the right partner for your business needs. Remember, it's crucial to prioritise factors such as compliance, security, and customer support, as these factors can significantly impact your business's success in the long run.