Four drivers in demand for ISOs

The demand for International Organization for Standardization (ISO) certification has clearly increased in recent years, with the global ISO certification market expected to grow at a CAGR of 14.7% from 2022 to 2030. With ISOs the most significant way that companies can demonstrate the quality, safety and effectiveness of their offering, it is increasingly becoming a requirement for tender processes, in all sectors from IT to communications to healthcare.

While demand for ISOs is increasing across many areas, we’re seeing particularly significant demand from companies looking to demonstrate strong information security management systems, for example through the ISO 27001 standard. ECI’s investment in Citation in 2012 was an early indicator of this, with the business acquiring QMS to enable it to deliver the ISO accreditation products being demanded by its existing SME customers. What’s driving this acceleration in demand?

1. Complexity in supply chain

Supply chains are becoming more complex as a result of the globalisation of supply chains and rising customer expectations for faster lead times. Covid-19 exposed vulnerabilities in global supply chains, reinforcing the necessity for them to be flexible, agile and resilient.

This can be a pain point. While it may not be possible to make supply chains less complex, it is possible to help find solutions to deal with that complexity, for example by increasing trust in the supply chain. ISO certification is one of the few ways that businesses can demonstrate they are equipped to handle the demands made of them, and will be able to deliver what they say.

The ISO 23301 mark is considered the gold standard of reliable business continuity management systems, with 56% of business continuity and risk professionals worldwide saying they use it as a framework, with an additional 15.1% certified or in the process of doing so. A driver here is the number of large customers requiring it from their suppliers. Microsoft has started requiring a valid ISO 27001 certification for any of their suppliers that meet the definition of being a SaaS provider.

2. Growth in regulation

Despite ISO standards not being a legal requirement, they are recognised by many industries a aligned with regulatory best practice. For example, ISO certification can be used to demonstrate ESG compliance.

ISO 27001 provides a good basis for meeting the requirements set out by the EU GDPR (which is compulsory). In fact, 48% of respondents in the process of or having already implemented ISO 27001 certification, named GDPR compliance as their main reason for getting certified.

3. Acceleration of cyber attacks

Historically ISO certification has focussed on physical security, but there is now an increased focus on digital assets and data security. This is key to combat cyber-attacks which are on the increase, with an 38% increase in global attacks from 2021 to 2022.

These attacks are costly and disruptive, and certifications like ISO 27001 reduce the organisation’s vulnerability to the evolving threats. By specifying protective measures, it prevents the risks of attacks and helps propagate good organisational practices.

4. Internationalisation of businesses

Many countries have frameworks backed by governments or trade associations, such as Cyber Essentials in the UK or SOC-2 in the US, to set common standards in security and privacy. However, ISO is the only international standard that exists for companies in areas like quality management (9001), environmental management (14001), and information security management (27001).

For businesses looking to serve customers in multiple countries, ISO certification is the most direct route to ensure that any compliance concerns from customers will be addressed. Even for US-headquartered businesses that have long defaulted to national standards, there is evidence of significant growth in ISO certifications. In information security management, this growth is reflected in many businesses that were originally focused on SO2-compliance now evolving their systems and processes to pursue ISO 27001.

These four trends are only increasing, so the expectation is that there shall be increasing demand from ISOs as SMEs and Enterprises look to comply with ever-increasing demands from customers, suppliers and their tech stack. If you would like to find out more about ECI’s experience in the compliance and certification space or discuss how we might be able to help your business, please get in touch.

About the author

Victoria Gustavsson

As an Analyst in the Origination Team, I focus on leveraging data to drive deal flow for ECI and M&A opportunities for our portfolio companies. I also work closely with our proprietary AI tool Amplifind™ which helps us to source and prioritise opportunities, driving a more effective and efficient origination model. Prior to joining ECI, […]

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Richard Chapman

"I enjoy leading deals at ECI and have invested in lots of different areas including healthcare, restaurants, business services and tech-enabled services, to name a few. A large part of my role is post-investment, helping companies continue their growth organically and through acquisition, both in the UK and internationally."

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