Managed Compliance: Growing Opportunity in Regulated Markets

Across many industries, compliance requirements are becoming more complex, stringent, and challenging to manage. As a result, demand is growing for tech-enabled service providers that help businesses ensure compliance in their unique and ever-changing regulatory landscapes. 

This is particularly evident in highly regulated markets such as the federal government, healthcare, financial services, education, energy, and utilities. These areas are continuously developing more comprehensive compliance guidelines to better secure themselves from increasingly frequent and sophisticated cyberthreats. 

Below, senior professionals in our Technology Group and Business Services Group share what’s driving higher adoption of managed compliance solutions and how a recent Harris Williams client, CyberSheath, exemplifies the growth potential in the sector. 

Continuous Compliance

To protect their highly sensitive data and critical infrastructure, many businesses and government organizations must adopt and enforce a variety of compliance frameworks. These mandates are complex to implement and frequently change, outpacing the capabilities of internal resources to ensure compliance and creating a greater reliance on managed compliance providers. Failing to comply with these frameworks or failing audits may come with strict punishments, including loss of revenue, reputational risk, and criminal implications, underscoring the mission-criticality of ensuring regulatory compliance. 

“Due to a lack of in-house capabilities, organizations often need help managing increasingly complicated and constantly shifting regulatory responsibilities,” says Priyanka Naithani, a managing director in our Technology Group. “Managed compliance solutions are a cost-effective way for companies to ensure that they’re always operating securely and meeting compliance requirements.” 

Further compounding such challenges, a tight labor environment for compliance and security talent is making third-party compliance expertise even more critical. “Compliance solutions and software allow companies to more effectively manage and automate key compliance processes, improving efficiency, reducing risk, and often reducing cost,” says Derek Lewis, a managing director. 

These factors are generating strong demand for managed compliance solutions, especially within highly regulated industries as they look to mitigate cyberattacks across their ecosystems and supply chains. 

Federal government end markets and ecosystems, like the Defense Industrial Base (DIB) that services the Department of Defense (DoD), are a prime example. The DoD alone spends $14.5B annually on cybersecurity compliance, with rising demand from hundreds of thousands of companies in the DIB that are subject to strict DoD compliance standards.¹ Meanwhile, a growing number of other federal agencies have developed or are developing comprehensive cybersecurity compliance guidelines, like those implemented by the DoD, that will also require third-party support. 

“Highly regulated markets have a mission-critical and recurring need for managed compliance providers,” says Naithani. “Our recent client CyberSheath illustrates the power of tapping into growing demand in these sectors.” 

CyberSheath: End-to-End Compliance Solutions

CyberSheath combines regulatory managed compliance, cybersecurity, and IT services into an end-to-end offering for companies throughout the Defense Industrial Base to ensure compliance with the DoD’s Cybersecurity Maturity Model Certification (CMMC) regulations. CyberSheath’s services are vital to these federal contractors, which must achieve and maintain full compliance with the DoD’s cybersecurity requirements. 

“CyberSheath’s differentiated approach enables secure and compliant managed IT services, tailored security that allows for 24/7 support, and continuous regulatory compliance through centralized documentation and evidence collection,” explains Naithani. 

With a strong reputation as a thought leader and innovator across government cybersecurity initiatives, CyberSheath has become a trusted partner throughout the DoD supply chain. Its executive team has been involved in the development of major DoD cybersecurity programs, giving the company a unique ability to help customers comply with Cybersecurity Maturity Model Certification rules and other regulations. 

“The company’s deep expertise with CMMC is key to its success, particularly with the recent release of CMMC 2.0 guidelines,” says Lewis. “Supported by this new mandate, CyberSheath is well positioned for long-term growth as the DIB continues to face enforcement of expanding security and compliance requirements.” 

Navigating Complexities

With the proliferation of regulatory compliance requirements, there is growing demand for companies that help businesses navigate these increasingly complex challenges. 

Leading managed compliance providers offer deep expertise in the compliance responsibilities of specific industries, ensuring that each customer is adhering to heightened standards. Many best-in-class providers also offer services beyond compliance management, as compliance can be largely enabled by strong IT and cybersecurity capabilities. 

“Across managed compliance, there’s a substantial long-term market opportunity supported by growth in federal, state, and local cybersecurity regulations,” says Naithani. “We look forward to seeing the M&A opportunities created by these themes going forward.” 

To further discuss managed compliance M&A, please contact our senior professionals.