Software-as-a-Service Audit: A Practical Guide for CFOs & CIOs

Simply put, ‘software audit’ is the process of reviewing software, where independent auditors typically assess a software product and examine how its functionalities and processes comply with regulations, industry standards, technical specifications, and contractual obligations.

Unlike the ‘software review’, which often looks at how a piece of software delivers on its promises, software audit is focused a lot more on the compliance aspect.

Now, given the need for greater transparency in regulated industries, as well as a number of other factors, such as the increasing use of unstructured data, the rising volumes of data, the blurred lines between personal and enterprise devices and networks, the regulations have become quite stringent.

As a result, software audit has become more demanding in order to be on par with standards dictated by the regulatory landscape.

Given their enterprise roles, CFOs and CIOs are particularly concerned with software audits, as the process falls within the boundaries of both functions. In this guide, we’ll focus on the practical side of SaaS software audit, examining the most common principles and how they translate into concrete do’s and don’ts.

Software Audit Compliance Rules

The regulatory landscape has been keeping up with software development, and increasingly stringent regulations have been adopted across industries to keep track of data security and protection.

In that regard, software audit needs to heavily focus on compliance. The sheer number of formats in which data can be generated and stored, as well as the rising volume of data, need to be kept at bay.

As strategic overseers of software implementation, CIOs need to make sure that any piece of software can easily tick off any compliance checkboxes.

In this regard, the software audit needs to be closely intertwined with a data compliance strategy, highlighting aspects such as:

Roles and responsibilities: which roles and departments will be using a piece of software, for which use cases, from which devices, networks, etc.

Data scope and format: which type of data will be used, how will it be captured, processed, and computed; as well as which kind of customer data and company enterprise records will the software work with.

Data and records preservation: data archiving particularly concerns the security and robustness of the software, the means of records preservation, the option to prevent records spoliation, the possibility to preserve metadata and prove the authenticity of your corporate record archive.

Modularity and customisability: in the sense of compliance, software flexibility can play a great role in ensuring your records deliver the maximum value to business intelligence, while at the same time ensuring you don’t’ fall prey to non-compliance. For instance, if a piece of software can be tailored to allow access only to particular verticals and in particular use cases, your organisation may find it a lot easier to prove customer data has not been shared with anyone outside the mandatory team.

Software Audit Workflow

Working as a company’s vanguards, CIOs and CFOs need to particularly pay attention to the strategic, far-reaching consequences of software adoption.

From the point of a software-as-a-service audit, this means focusing heavily on ensuring proper, thorough documentation of the audit process is in place. While risking to sound overly ‘waterfall’, the documentation part of the SaaS audit allows for a truly agile and nimble day-to-day operation, well-protected from potential regulatory mishaps and fines down the road.

Documenting the software audit process lies at the heart of sound data and compliance strategy. It should be an evolving piece of record, that provides companies, C level executives, and everyone who needs to be involved, with a good sense of direction throughout the audit process, helping at the more strategic level, but also at the nitty-gritty part of software assessing.

In short, a good software audit documentation needs to provide guidance on the following:

  • Schedule and timeline of software audits
  • The outline and scope of the process, with clear roles and responsibilities
  • The outcome of the audit process, as well as key metrics to consider
  • Budget and financial constraints
  • Interoperability and the potential for integration with existing software and resources
  • Potential SaaS risks and impact on the company’s day-to-day and long-run operations
  • Ease of use: which teams will be using the software; it also pays off to include them early on in the process to source valuable feedback. In turn, as you get the buy-in from team members, you will have much better chances of acquiring a piece of software that actually helps boost efficiency
  • Support: a good piece of software needs to have an impeccable support team that will be available to your teams for consultation, especially in the early days of software use

Once you have a ballpark estimate of these aspects, it will be a lot easier to update them with each coming software-as-a-service audit. More importantly, this will help you save time down the road, as you will have a body of knowledge that shows what pieces of software work for your organisation and with the existing infrastructure.

Software Audit Security and Interoperability Checks

Finally, a software audit needs to include a substantial examination of the software’s security and integration capabilities.

Especially today, when even smaller organisations use a number of services to deliver their products and services, the possibilities of integration help preserve much-needed resources and ensure a smooth flow of information across the board.

Hence, as a CFO and CIO, your main goal with a software-as-a-service audit will be to determine how well it fits with the rest of the company’s proprietary software and third-party services.

In particular, you should assess for and grade each potential software fit for these aspects:

  • Degree of correct integration with software in place
  • The level of adaptability of the business process to the software application itself
  • Level of connectivity between the software and existing data resources
  • Options for monitoring software performance
  • Security and robustness, as well as penetration testing
  • Complexity of the environment
  • Scalability of infrastructure

About the Author

Lilly Miller is a Sydney based writer and researcher, who is a devoted contributor to several blogs and magazines. Yoga lover.

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