SOC 2, HIPAA, or CMMC: How to Identify the Right Compliance Framework for Your Business

Most businesses encounter compliance requirements not by choice, but through a client contract, an insurance application, or a regulatory mandate that lands without much warning. The first question is almost always the same: which framework actually applies to us? The answer depends on three things — your industry, your clients, and the type of data you handle — and it is more navigable than it might appear.

Key Takeaways

• The right compliance framework depends on your industry, clients, and regulatory environment, not trends or what competitors are doing.

• SOC 2 applies broadly to organizations handling customer data, especially in SaaS and professional services.

• HIPAA applies to organizations that handle protected health information (PHI). It is a federal law, not a voluntary certification.

• CMMC applies to organizations in the Department of Defense supply chain and became contractually binding in November 2025.

• Many organizations need more than one framework. The control overlap between them makes dual compliance more manageable than it looks.

• A compliance partner should help you prioritize based on business risk, not sell you the most comprehensive package available.

  
  

Understanding the Three Frameworks

SOC 2

SOC 2 was developed by the American Institute of Certified Public Accountants (AICPA) to give service organizations a structured way to demonstrate that their security controls protect customer data. It is organized around five Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Security is always required; the others are selected based on what is relevant to your services.

SOC 2 is voluntary from a regulatory standpoint, but market-driven in practice. Enterprise buyers, healthcare organizations, and financial institutions routinely require a SOC 2 report before signing vendor contracts. There are two report types: Type 1 assesses control design at a point in time; Type 2 evaluates whether those controls operated effectively over an observation period, typically six to twelve months. Enterprise buyers almost always want Type 2.

HIPAA

The Health Insurance Portability and Accountability Act is a federal law, not a certification program. If your organization creates, receives, maintains, or transmits protected health information, either as a healthcare provider or as a vendor serving one, compliance is legally required. The law applies to Covered Entities and their Business Associates, which includes a wide range of technology companies that may not think of themselves as operating in healthcare.

HIPAA compliance is structured around three rules: the Privacy Rule, the Security Rule, and the Breach Notification Rule. Non-compliance carries real consequences. Fines range from $100 to $50,000 per violation, with annual maximums reaching $1.5 million per violation category.

CMMC

The Cybersecurity Maturity Model Certification (CMMC) is the Department of Defense's framework for verifying that contractors and subcontractors protect sensitive government information. CMMC 2.0 has three levels tied to the sensitivity of the information handled. Level 1 covers basic protections for Federal Contract Information (FCI). Level 2 requires 110 security practices aligned with NIST SP 800-171 and applies to most organizations handling Controlled Unclassified Information (CUI). Level 3 adds requirements from NIST SP 800-172 for the most sensitive programs.

CMMC became contractually binding in November 2025. Defense contractors, subcontractors, and their suppliers across industries including technology, manufacturing, engineering, and logistics must achieve the appropriate certification level as a condition of contract award. The obligation flows through the supply chain, which means companies that do not work directly with the DoD may still be in scope.

How to Determine Which Framework Applies to Your Business

Three questions will take you most of the way there.

1. Do you handle protected health information?

If your organization is a healthcare provider, health plan, or healthcare clearinghouse, or if you are a vendor whose product or service touches PHI on their behalf, HIPAA compliance is not optional. This includes telemedicine platforms, health tech startups, medical device manufacturers, and any SaaS provider whose system processes patient data. If the answer is yes, start here.

2. Do you work with DoD contracts or subcontracts?

If any part of your business involves work for the Department of Defense, or if you supply products or services to a company that does, CMMC is likely in scope. Review your contracts for DFARS clause 252.204-7012 and any CMMC references. The certification level required depends on whether you handle FCI (Level 1) or CUI (Level 2 or 3). If you are unsure, a gap assessment will clarify your position quickly.

3. Do clients or prospects require proof of your security controls?

If enterprise clients ask about your security practices during procurement, or if you have lost deals because you could not produce a security attestation, SOC 2 is the answer. It is the most widely recognized third-party validation of security controls for service organizations, and it applies broadly, from IT managed service providers to software companies to accounting firms.

When Multiple Frameworks Apply

It is common for organizations to fall under more than one framework. A healthcare SaaS company may need HIPAA for legal compliance and SOC 2 because its enterprise clients require it. A defense contractor that also serves commercial clients may need both SOC 2 and CMMC.

The practical good news is that significant control overlap exists across all three frameworks. Access control, risk assessment, data encryption, incident response, and audit logging are required in some form by SOC 2, HIPAA, and CMMC alike. A well-designed compliance program addresses these shared requirements once and maps them to each applicable framework, rather than treating every certification as a separate effort.

Research consistently shows 60 to 70 percent overlap between SOC 2 and NIST 800-53 controls, which underpin CMMC Level 2. HIPAA's Security Rule aligns closely with SOC 2 in areas like access management, encryption, and incident response. Organizations that start with a strong SOC 2 foundation are not starting over when HIPAA or CMMC requirements emerge. They are extending a structure that already exists.

How to Start: Practical First Steps

• Conduct a gap assessment. Identify which framework or frameworks apply to your organization and where your current controls fall short. This is the foundation for everything else. It defines scope, surfaces risk, and prevents you from solving the wrong problem first.

• Prioritize by business urgency. If a client contract is contingent on CMMC compliance by a specific date, that determines the sequence. If an enterprise sales cycle is stalling on the absence of a SOC 2 report, that is your first milestone. Let business requirements drive the roadmap.

• Engage a compliance-aware IT partner early. Compliance work lives inside your IT environment. An IT partner with direct compliance experience can help you implement controls that are both technically sound and audit-ready, without duplicating effort across frameworks.

• Build a phased roadmap. Most organizations cannot address every requirement simultaneously. Start with the highest-priority framework, establish shared controls, then layer in additional requirements. It is more manageable and more cost-effective than attempting everything at once.

  
  

Why Organizations Partner with BetterWorld Technology for Compliance

Compliance is not a project with a finish line. It is an ongoing practice that lives inside your technology environment, your processes, and your team. BetterWorld Technology works alongside organizations to build compliance programs that are grounded in real security, not just documentation.

As a SOC 2 Type 1 Certified organization, BetterWorld Technology has built and maintained its own compliance program, which means the guidance we offer comes from direct experience, not theory. As a Certified B Corporation, our commitment to integrity and responsibility is not a marketing position; it is how we operate.

• Cyber Risk Assessments to identify your actual exposure before you build a compliance roadmap

• GRC program design and implementation across SOC 2, HIPAA, and CMMC

• vCISO services for organizations that need senior security leadership without a full-time hire

• Compliance alignment that maps shared controls across frameworks, reducing duplication and cost

• Ongoing managed IT support that keeps your environment audit-ready between certification cycles

Get a Free Compliance Assessment

Connect with BetterWorld Technology today to identify the right compliance framework and build a practical path to readiness.

FAQs

Can a managed IT provider help with compliance, or do I need a separate consultant?

A managed IT provider with compliance expertise can handle the majority of what most small and mid-sized organizations need, including gap assessments, control implementation, policy development, and audit preparation. The advantage is that your IT partner already understands your environment. Separate compliance consultants make sense for large enterprises with complex, multi-framework programs or for highly specialized regulatory requirements. For most businesses, a compliance-capable IT partner is both sufficient and more efficient.

How long does SOC 2 certification take?

SOC 2 Type 2 typically takes 12 to 18 months from the start of your compliance program. This includes a readiness phase to assess and implement controls, an observation period of six to twelve months during which your controls operate and are documented, and the formal audit. Organizations that begin with a thorough gap assessment and invest in clean documentation move through the process more predictably. Starting before you need the report is the most important thing you can do to manage the timeline.

What is the difference between SOC 2 Type 1 and Type 2?

A SOC 2 Type 1 report assesses whether your security controls are designed appropriately at a single point in time. A Type 2 report evaluates whether those controls operated effectively over a defined period, typically six to twelve months. Enterprise buyers nearly always require Type 2 because it demonstrates sustained performance rather than a snapshot. Most organizations pursue Type 1 first to validate their control design, then proceed to Type 2 as the observation period completes.

Does BetterWorld Technology support CMMC compliance?

Yes. BetterWorld Technology provides CMMC gap assessments, NIST SP 800-171 implementation guidance, and compliance readiness support for organizations at Levels 1, 2, and 3. Given that CMMC became contractually binding in November 2025, organizations in the DoD supply chain that have not yet assessed their compliance posture should begin that process now. Assessment capacity among Certified Third-Party Assessment Organizations (C3PAOs) is limited, and lead times are growing.

Do I need compliance certification to win government contracts outside of the DoD?

CMMC is specific to the Department of Defense supply chain, but other federal agencies have their own requirements. Organizations pursuing contracts with civilian agencies may encounter FedRAMP if they provide cloud services, or FISMA-based requirements depending on the nature of the work. State and local government contracts vary widely. The practical starting point is the same regardless of which agency is involved: identify what data you will handle, review the contract requirements carefully, and conduct a gap assessment before committing to a timeline. A compliance-aware IT partner can help you interpret what is actually being asked before you invest in building toward the wrong standard.