The Situation of the Client
In the rapidly evolving landscape of cybersecurity compliance, small-to-medium-sized Machine Shops often find themselves at a crossroads. They face the dual challenges of achieving compliance with the Department of Defense’s (DoD) Cybersecurity Maturity Model Certification (CMMC) 2.0 requirements and managing the associated costs. The Machine Shop in our use case was confronted with these challenges.
The Market Environment
The cybersecurity compliance landscape is changing rapidly. According to Gartner, by 2025, 60% of organizations will consider cybersecurity risk a primary factor in third-party transactions, and organizations may lose up to 50% of their contracts if they aren’t adequately prepared. This shift is driven by a surge in regulatory requirements, with a 2850% increase in state legislation alone since 2018.
How it Works
The Machine Shop faced the challenge of achieving CMMC 2.0 compliance, which posed a significant financial burden and resource strain if attempted in-house. However, an innovative solution emerged by collaborating with a Prime DoD Contractor.
The Prime DoD Contractor recognized the value of enclaving, a practice of isolating certain areas to minimize exposure to the broader organization. They devised a strategy where the Machine Shop, as a Subcontractor, was tasked with achieving CMMC 2.0 compliance. This approach would ensure that only the Machine Shop, with its smaller employee count and facility, needed to become compliant for Controlled Unclassified Information (CUI) information flow, significantly reducing costs and complexity.
The Machine Shop opted to outsource its compliance efforts to Omnistruct, a leading provider of cybersecurity compliance services. By doing so, the Machine Shop was able to tap into expert guidance, continuous monitoring, and risk mitigation strategies at a fraction of the cost of building an in-house compliance team.
Funding through Purchase Orders.
Instead of bearing the financial burden themselves, the Machine Shop negotiated with the Prime DoD Contractor to include a surcharge for CMMC compliance within their purchase orders. This innovative approach allowed the Machine Shop to access the necessary funds to support their compliance efforts.
Results and ROI
Omnistruct provided Cyber Risk Governance as a Service, ensuring the Machine Shop’s compliance with CMMC 2.0 requirements. By outsourcing their compliance program, the Machine Shop benefited from expert guidance, continuous monitoring, and risk mitigation strategies, all while maintaining cost-effectiveness.
By outsourcing compliance with Omnistruct, the Machine Shop saved approximately $380,000 per year when compared to the cost of building an internal compliance program. This represents an 80% reduction in costs.
Enhanced Cybersecurity Posture.
The Machine Shop achieved an enhanced cybersecurity posture and was well-prepared to respond to threats, demonstrating compliance with evolving regulations.
Personal Liability Mitigation.
The leadership team, including the CFO, CEO, CTO, and CIO, were protected from personal liability in the event of a cyber incident, safeguarding their personal assets.
Supply Chain Resilience.
Collaborating with smaller subcontractors who achieved CMMC compliance faster ensured a resilient supply chain while effectively mitigating cyber threats.
Peace of Mind and Growth Opportunities.
The Machine Shop gained peace of mind, knowing their cybersecurity was in expert hands. Subcontractors also had the opportunity to participate in lucrative multi-million dollar contracts by leveraging Omnistruct’s expertise and achieving CMMC compliance. This strategic move resulted in the Prime Contractor awarding them $700,000 in annual business, a significant portion of their $5 million total business revenue. With Omnistruct’s support, the Machine Shop now envisions the potential to 10X their $5 million business within the next five years, capitalizing on the growing market opportunities in the aerospace and defense sector.
Quantifiable Cost Savings.
The Machine Shop avoided an average cost of $1.9 million over three years associated with building an in-house compliance program. This quantifiable cost saving ensured financial stability and protected the company’s reputation.
Conclusion: By leveraging Omnistruct’s Cyber Risk Governance as a Service, utilizing enclaving, outsourcing, and innovative financing strategies, the Machine Shop effectively addressed the challenges of achieving CMMC 2.0 compliance. Partnering with Omnistruct resulted in substantial cost savings, an enhanced cybersecurity posture, and new growth opportunities, demonstrating the value of collaborative approaches in navigating complex compliance landscapes. This combined approach not only helped the Machine Shop but also provided valuable insights for educating other small businesses on leveraging Primes, enclaving, outsourcing, and strategic financing to achieve compliance and gain a competitive edge in an evolving market environment.