ISO 27001 For SaaS Businesses: A Starter’s Guide

ISO 27001 is a well-established and recognized cybersecurity certification. It provides companies (and SaaS businesses) comprehensive guidelines on creating, implementing, and improving their Information Security Management System (ISMS). 

For SaaS businesses that have a majority of their data on the cloud, the standard is more than a certification that gets them in the room. It’s a badge of honor that helps them build customer trust, showcase operational maturity, and enable growth. 

With the evolution of the cyber threat landscape, ISO 27001 has become an invaluable cornerstone that guides them toward a state of sustained resilience.  In this blog, we explore the benefits of ISO 27001 for Saas businesses and the steps to getting audit-ready and certified.

TL;DR ISO 27001 builds resilience against cyber threats for SaaS companies, boosts prospective customers’ confidence, prepares for cyber attacks, saves costs, and gives a competitive edge.   Complying with ISO 27001 starts with building an ISMS, conducting risk assessments, defining ISO scope, conducting regular audits, and maintaining continuous compliance.  Rather than following the 13-step checklist, SaaS companies can automate the process with a compliance automation solution integrated with an auditor’s dashboard.

Why should a SaaS business comply with ISO 27001?

The ISO 27001 certification allows SaaS businesses to have a proactive approach toward information security and protecting sensitive data. It enables them to capture customer trust and ensure the confidentiality, integrity, and availability of their systems, data, and processes. 

But that’s not all. ISO for SaaS comes with more benefits like:

1. Builds resilience against cyber attacks

Implementing the ISO 27001:2022 controls lets you identify and mitigate vulnerabilities in your system to protect your system against growing threats. The risk-based approach safeguards assets such as financial statements, employee data, and third-party information against cyber risks, ensuring they remain intact, confidential, and accessible when needed.

2. Boosts customer confidence

Getting ISO 27001 certification for your SaaS business showcases that you care about the information your customers provide you. Since it follows best practices to minimize risks, it upholds customer confidence, as well as that of your shareholders. 

3. Helps prepare for new threats

Getting ISO 27001 certified will prepare your organization and its assets, including your employees, technology used, and processes to confront potential security risks related to infosec. Monitoring ISO controls gives you an upper hand against vulnerabilities across all assets. 

4. Saves costs 

The average cost of facing a data breach for a business stands at $4.45 million as of 2023, and the number is only increasing. Hence, the cost savings from preventing breaches with ISO 27001 can be significant.

The ISO 27001 international standard is very comprehensive in nature. For example, when HubEngage, an employee engagement SaaS platform, implemented ISO, Sunil Sarda, Head of Engineering, noted, “We had to do some 10% more to meet GDPR, HIPAA, and SOC2 requirements.“

Read the full case study on how HubEngage took only 15 hours to implement ISO 27001.

5. Enhances competitive advantage

Most vendors or third parties require you to complete security questionnaires when signing contracts. This process can be time-consuming. Being ISO 27001 certified not only accelerates this process but also conserves your resources. 

In today’s competitive SaaS market, ISO certification not only establishes your reputation as a trusted business partner but also positions your company as a preferred choice for potential clients and partners.

Getting ISO 27001 certification for SaaS businesses: 13 key steps

Getting ISO 27001 for SaaS involves developing an ISMS and conducting risk assessments and audits according to the annexures and clauses in the ISO 27001 document. To make things easier for you, we’ve broken it down into simple, actionable steps to get your certification from start to finish. 

The 13 key steps involved in getting ISO 27001 for SaaS businesses in brief are:

1. Form an internal ISO team: The ISO team of a SaaS company should have an information security officer who is internally nominated. The team should also consist of key employees from your IT team and any other stakeholders involved in security decisions. 

2. Build an ISMS: Your ISMS must align with your ISO 27001 scope. Building your ISMS includes defining what kind of data you want to protect. As a SaaS business, you must safeguard your third-party information, customer data, company databases, etc. 

3. Develop ISMS policies, processes & documentation: ISO 27001 requires a lot of documentation. Everything contained in your ISMS should be formalized with documents, well-defined processes and policies. Refer to the table below to know the prerequisites. 

Policies	Mandatory Procedures
Information Security Policy	Information Classification and Management
Mobile Device Policy	Asset Management
Remote Access / Teleworking Policy	Vulnerability Management
Access Control Policy	Management of (Removable) Media and Storage Devices
Clear Desk and Screen Policy	User Access Management
Acceptable Use of Information Assets Policy	Working in secure areas
Communications (Information Transfer) Policy	Change Management
Secure Development Policy or Plan	Capacity Management
Supplier Management Security Policy	Anti-Malware
Data Classification Policy	Backup and Recovery
	Information Security Incident Management
	Business Continuity Plan
Mandatory Documents	Additional Documents
Scope of ISMS	Job Descriptions of employees dealing with Information Security
Statement of Applicability	Training of Staff
Inventory of Assets	Audit Process Plans
Risk Assessment and Treatment Plan (covered in detail later)	Maintenance Plans and Performed Maintenance Work
Security Roles & Responsibilities	Logs, KPIs, Key Figures, Configuration Files, and Network Plans

4. Conduct risk assessment and treatment: The risk assessment should entail all your assets, people, processes, and systems. Classify risks based on their likelihood of occurrence and prioritize risk mitigation strategies for sensitive information. 

Risk assessment and mitigation should be done using tools like risk registers, risk matrix, SWOT analysis, etc. A better way to proceed would be to adopt a risk management software that maps risks to ISO 27001 compliance requirements to give you real-time insights. 

5. Ready the Statement of Applicability (SOA): The SOA is a list of Annex A controls that your SaaS business has decided to adopt. It contains details about why the controls have been included or excluded. It also enlists relevant documentation on how each control is executed.

6. Implement ISMS policies and controls: Identify challenges regarding your control objectives. Implement and test solutions, processes, and technologies to reduce risk and operational failures based on your scope. Monitor and review the ISMS’s performance and update and improve the ISMS based on results and identified failures.

Here’s an actionable plan-do-check-act cycle to implement your SaaS ISMS:

7. Conduct employee awareness and training programs: ISO 27001 requires SaaS businesses to conduct basic security training for employees, periodic awareness programs, and role-based training. Employees must also be aware of how to common threats regarding infosec.

Learn more about ISO 27001 training. 

8. Conduct gap analysis and remediate: You can do this by downloading a copy of the ISO 27001 standard and checking each control of your SaaS business. Then, you need to create a mitigation plan to remedy the gaps. 

To make things easier, we have a template ready for you to close out your gaps: 

9. Undergo internal audit: The internal audit can be carried out by a designated internal auditor or an external contractual auditor. It consists of a documentation review, a field review, an internal audit report, and a senior management review.

You can use the following document to conduct an internal audit of your SaaS business:

10. Undergo a Stage 1 audit: This is the first stage of the external audit to be conducted by an external certified ISO 27001 auditor. They will review all your documentation against the defined ISO scope. At the end of it, you’ll receive a readiness report and improvement areas. 

11. Undergo a Stage 2 audit: The Stage 2 audit collects all the evidence against the ISO 27001 controls for your SaaS business. The external auditor will evaluate, review and test the controls and submit a report on the findings. The certification process will go through if you do not have several non-conformities. 

12. Undergo periodic surveillance audits post-certification: The ISO 27001 certification lasts three years as long as you conduct period audits at the end of every year. It’s very similar to the Stage 2 audit but not as comprehensive. 

13. Improve continuously: As your business grows, so should your ISMS. Ideally, you should have a real-time insight into your security risks to mitigate bottlenecks as they appear. However, continuous compliance or ongoing commitment is impossible without an automated tool. 

Hence, consider using a tool like Sprinto, which automates 90% of the process of achieving compliance with ISO 27001 while conducting periodic risk assessments. The platform has 200+ integrations to pull evidence for your security controls to maintain continuous compliance. 

For more detailed information on the above steps, read ISO 27001 Implementation Roadmap. 

If you’re too lazy to read the whole list, you can watch the following video:

​​https://www.youtube.com/watch?v=7VQrtOVGYOU 

Compliance for SaaS made easy

The effective operation of your information security controls is key to compliance with ISO 27001. You must always be aware of the status of your controls and whether they are passing or failing crucial checks. 

Sprinto lets you achieve this with a centralized dashboard with a control summary from all areas of your business, including people, policies, training, risks, vendors, access, infrastructure, etc. 

Risk management is another crucial aspect of complying with ISO 27001. Along with it, the control, A.16 Information security incident management, compels SaaS companies to take a proactive approach to an incident response plan. However, this is not possible without real-time monitoring and alerts.

Sprinto monitors your controls at a granular level to notify you about security incidents along with their severity and mitigation signals. To govern your ISMS further, you can also peek into the compliance gap reports, risk reports, vendor reports, and health reports. 

Here’s how the vendor report looks like:

Following the 13-step checklist manually for ISO 27001 compliance usually takes 6-8 months if done very carefully. However, the 13 steps can be reduced to just 4 steps with Sprinto, which has automated workflows and a dedicated auditor’s dashboard for you and the internal/external auditor. 

Frequently asked questions

1. What are the ISO 27001 certification requirements for SaaS companies?

The ISO 27001 requirements for SaaS companies are:

• Establish an ISMS
• Conduct risk assessments
• Have a risk treatment plan
• Implement mandatory controls
• Document all processes and controls
• Conduct internal audits
• Conduct external audit and management review
• Improve the ISMS continuously 

2. Is ISO 27001 applicable to software services?

Yes, ISO/IEC 27001 is applicable to software services and plays a crucial role as the ISO standard contains three technical controls for software development:

• Control A.14.2.9: Mandatory acceptance testing against functional and non-functional requirements, including security.
• Control A.14.2.8: Conduct security tests throughout the development process.
• Control A.12.1.4: Separate development, test, and operational environments.

3. What is the difference between ISO 27001 and SOC 2?

The differences between ISO 27001 and SOC 2 are outlined below:

Aspect	ISO 27001	SOC 2
Focus	Information Security Management System (ISMS)	Service Organization Control (SOC) for data security, availability, processing integrity, confidentiality, and privacy
Security framework	Prescriptive controls and requirements	Trust Service Criteria (TSC)
Scope	Organization-wide	Specific to service providers
Certification	Internationally recognized certification	Attestation by CPA firms
Audits	Internal and external audits	Independent third-party audit
Applicability	Broad, for any organization	Specifically for service organizations

4. Do all companies need to comply with ISO 27001?

No, ISO 27001 compliance is not mandatory for all companies, but it is highly recommended for organizations that handle sensitive information or operate in industries where data security is critical. Industries such as finance or healthcare, may have regulatory requirements that align closely with ISO 27001.