Customer Controls vs MSP Controls: Leveraging Managed Controls for Supply Chain Compliance

Modern supply chains are intricate networks that can span continents, industries, and regulatory zones. As digital transformation accelerates, organizations face a growing web of compliance requirements that look to address data privacy, cybersecurity, and operational integrity. The involvement of third-party vendors, disparate IT environments, and evolving legal frameworks can often further compound this situation. This means that compliance is no longer a static, one-time effort; but instead is something that requires ongoing vigilance, adaptability, and coordination across multiple stakeholders.

MSPs have become powerful allies for organizations striving to maintain compliance in this challenging landscape. They offer specialized expertise, robust technological frameworks, and economies of scale that many organizations can find difficult to achieve on their own. By centralizing the management of security controls, monitoring, and reporting functions, MSPs can help to reduce the complexity and cost of compliance. Their proactive approach to risk assessment, regulatory alignment, and continuous improvement can help to empower companies to focus on core business objectives, while working to ensure compliance requirements are systematically addressed and maintained.

This article aims to demystify the distinction between MSP-managed controls and those that remain the customer’s responsibility. It provides a closer look into how these controls operate within the broader context of supply chain compliance, illustrating where boundaries lie, how collaboration can close critical gaps, as well as guidance on how to structure shared compliance strategies.

By clarifying roles and responsibilities, the article seeks to empower organizations and their MSP partners to form resilient, compliant, and agile supply chain ecosystems.

Understanding MSP Controls and Customer Controls

Definition of MSP controls: MSP controls are the security and compliance measures deployed, monitored, and maintained by the MSP on their customers’ behalf. These controls are typically embedded within the MSP’s service offerings and infrastructure, and are designed to help ensure regulatory alignment, risk mitigation, and operational consistency across multiple customer environments.

Examples of MSP controls: These can include centralized patch management, automated threat detection, security event logging, vulnerability scanning, and incident response protocols. For instance, an MSP might use a Security Operations Center (SOC) to continuously monitor customer networks for suspicious activity and respond rapidly to potential breaches, or implement regular software updates across all managed devices to help ensure vulnerabilities are promptly addressed.

Definition of customer controls: Customer controls refer to the compliance and security responsibilities that remain with the client organization, even when an MSP manages certain elements of the IT environment. These controls often relate to the unique operational, regulatory, or business requirements specific to the customer’s industry, region, or internal policies.

Examples of customer controls: These can include access to authorization processes, enforcement of acceptable use policies, employee security training, and the management of sensitive data classifications. For example, a customer may be responsible for defining who within their organization has access to specific data sets, or ensuring their staff complete annual compliance and cybersecurity awareness training.

Key differences and boundaries of responsibility

A clear distinction between MSP controls and customer controls is essential for effective compliance management. MSP controls are typically standardized, leveraging the provider’s technical expertise and resources to help deliver consistent, scalable security measures. In contrast, customer controls are tailored to the organization’s internal practices and regulatory obligations that cannot be outsourced.

 The boundary of responsibility is often defined in the service-level agreement (SLA) and supporting documentation, delineating which party is accountable for each control. For example, while the MSP may monitor network traffic for threats, the customer remains responsible for determining which users should have privileged access to critical systems. A shared responsibility model, clearly documented and regularly reviewed, helps to limit the risk of gaps between managed and customer controls, therefore helping to reduce the risk of compliance failures.

The Compliance Landscape Across the Supply Chain

Common regulations and standards impacting supply chains

Modern supply chains must adhere to a growing assortment of regulations and standards, covering everything from data privacy to product safety. Some of the best known examples of these, include the General Data Protection Regulation (GDPR), which governs the handling of personal data across the European Union; the Health Insurance Portability and Accountability Act (HIPAA) in the United States for healthcare data; and industry-specific frameworks like ISO/IEC 27001 for information security management. Additionally, supply chain partners may need to comply with sector-based or regional standards, such as CMMC (Cybersecurity Maturity Model Certification) for defense contractors or SOC 2 for service organizations handling sensitive data. These regulations not only vary by jurisdiction but may also evolve over time, requiring supply chain participants to maintain a proactive and adaptable compliance posture.

Points of vulnerability and compliance risk

The complexity of interconnected supply chains increases the number of potential entry points for compliance lapses. Vulnerabilities often arise at the interfaces between organizations, such as when data is exchanged with third-party vendors or when critical operations are outsourced to external providers. Risks can also stem from inconsistent enforcement of security protocols, lack of real-time visibility across supplier tiers, or failure to properly vet and monitor vendor compliance programs.

Furthermore, the proliferation of IoT devices, cloud services, and remote access solutions introduces new layers of risk, making it essential for organizations to identify, assess, and address these vulnerabilities through a blend of technical controls, contractual safeguards, and ongoing monitoring. Without robust controls and clear delineation of responsibilities, even a minor oversight in one link of the supply chain can have cascading consequences for regulatory compliance and organizational resilience.

Leveraging MSP Controls for Compliance

How MSPs can implement robust managed controls

MSPs play a critical role in strengthening compliance by deploying a suite of security measures tailored to the specific needs of their customers. Implementation typically begins with a thorough risk assessment, identifying regulatory requirements and operational risks within the supply chain. MSPs then roll out controls such as centralized patch management, multi-factor authentication (MFA), and continuous network monitoring. These controls are supported by advanced technologies, including AI-driven threat intelligence platforms and automated response workflows, ensuring threats are quickly detected and mitigated. By standardizing these processes across multiple customers, MSPs can achieve a level of consistency, cost-efficiency, and scalability that individual organizations might struggle to realize independently.

Real-world examples of MSP controls supporting compliance

For example, an MSP working with a global manufacturing customer may deploy endpoint detection and response (EDR) tools across all supplier workstations, helping ensure vulnerabilities are identified and addressed promptly. In another case, an MSP might implement a managed Security Operations Center (SOC) for a healthcare provider, monitoring for HIPAA-related data breaches and providing rapid incident response. Furthermore, MSPs frequently conduct simulated phishing campaigns and vulnerability assessments on behalf of customers, reporting on compliance gaps and helping organizations remediate issues before they result in regulatory violations.

Communication and transparency with customers

Effective compliance hinges on open communication and transparency between MSPs and their customers. MSPs must provide regular, clear reporting on the performance and status of managed controls, including compliance dashboards, security incident summaries, and audit logs. Scheduled meetings and real-time alerts ensure that customers are always informed about the security posture of their supply chain. Moreover, transparency empowers organizations to make informed decisions about their own controls, collaborate on remediation strategies, and demonstrate regulatory adherence during third-party audits or assessments.

Integrating Customer and MSP Controls

Collaboration strategies for shared compliance goals

Effective integration of MSP and customer controls hinges on intentional collaboration. Organizations and their MSPs should establish regular communication channels—such as quarterly compliance reviews, joint security workshops, and shared knowledge platforms—to align objectives and promptly address emerging risks. By fostering a culture of transparency and partnership, both parties are better equipped to anticipate regulatory changes, harmonize procedures, and respond cohesively to compliance challenges. These strategies not only streamline processes but also cultivate a sense of shared responsibility, encouraging proactive engagement rather than reactive problem-solving.

Bridging gaps: where customer controls complement MSP controls

Although MSPs deliver robust standardized solutions, certain compliance requirements remain deeply rooted in a customer’s specific context. Customer controls—such as employee background checks, tailored access management, and end-user policy enforcement—complement the technical safeguards provided by MSPs. By mapping out the unique touchpoints where customer actions support or enhance MSP measures, organizations can identify and preempt potential vulnerabilities. For example, while an MSP may monitor security incidents, the customer ensures that only authorized personnel have access to sensitive systems, closing the loop on potential internal threats. This complementary approach helps ensure comprehensive coverage and minimizes compliance blind spots across the supply chain.

Responsibility matrices and documentation

Establishing a clear responsibility matrix—often visualized as a RACI (Responsible, Accountable, Consulted, Informed) chart—provides a concrete framework for delineating roles. By documenting each party’s obligations for every control, these matrices eliminate ambiguity, streamline onboarding of new stakeholders, and facilitate swift responses during audits or incidents. Regularly updated documentation further ensures that evolving regulations or operational changes are reflected promptly, maintaining alignment between contract terms and real-world practices. Robust documentation is not just a compliance artifact; it is a dynamic tool for ongoing risk management and organizational resilience.

Achieving End-to-End Compliance in the Supply Chain

Best practices for continuous compliance management

Organizations should adopt an ongoing approach to compliance, rather than treating it as a one-time event. This involves establishing processes for regularly reviewing and updating compliance programs, leveraging automation for routine tasks, and staying informed about changes in regulatory landscapes. Regular training and awareness initiatives help ensure that all team members, from executives to frontline staff, understand their roles in maintaining compliance. Documenting policies and procedures, and conducting periodic internal audits, further reinforces a culture of compliance and readiness for external scrutiny.

Monitoring, auditing, and responding to compliance issues

Effective compliance management hinges on robust monitoring and auditing mechanisms. Organizations should deploy real-time monitoring tools, such as Security Information and Event Management (SIEM) platforms, to detect anomalies and potential violations promptly. Scheduled audits—both internal and external—help validate the effectiveness of controls and identify areas for improvement. When issues arise, having a clear incident response plan is critical; this includes immediate containment, investigation, documentation, and timely reporting to relevant stakeholders or authorities as required by law or regulation.

The future role of MSPs in supply chain security and compliance

As supply chains become more digitized and interconnected, the role of MSPs is expected to grow in both importance and complexity. In the future, MSPs will leverage advanced analytics, AI, and machine learning to anticipate and mitigate emerging risks proactively. They may also be able to offer expanded services, such as regulatory intelligence, adaptive controls tailored to evolving threats, and collaborative platforms for sharing threat intelligence across industries. MSPs will be pivotal partners in both helping to achieve and sustain end-to-end compliance and security in increasingly dynamic and globalized supply chains.

Conclusion

Recap of key takeaways

• The distinction between MSP controls and customer controls is fundamental for effective supply chain compliance. Clear boundaries and responsibilities, as defined in service-level agreements and supporting documentation, prevent compliance gaps and ensure a unified approach to risk management.
• Leveraging MSP expertise and technological capabilities, organizations can benefit from robust, standardized controls that address broad regulatory requirements and operational risks. At the same time, customer controls—rooted in unique organizational needs—fill important context-specific gaps that cannot be outsourced.
• Open communication, transparency, and collaboration between MSPs and their customers are vital for navigating the complex, evolving regulatory landscape. Regular reviews, shared documentation, and responsibility matrices facilitate ongoing alignment and rapid adaptation to changes or incidents.

Actionable steps for MSPs and customers

• Establish clear roles and responsibilities: Use detailed documentation and responsibility matrices (such as RACI charts) to define which party is accountable for each compliance control and review these assignments regularly.
• Promote ongoing collaboration: Set up regular communication channels—such as scheduled compliance meetings, joint risk assessments, and shared reporting platforms—to ensure prompt identification and resolution of potential issues.
• Maintain continuous compliance: Both MSPs and customers should commit to continuous monitoring, regular internal audits, and staff training to stay ahead of regulatory changes and emerging threats.
• Leverage technology and expertise: Take advantage of MSP-managed tools, such as automated monitoring, vulnerability assessments, and security analytics, to strengthen the compliance posture while remaining vigilant in fulfilling customer-specific responsibilities.
• Document and review: Keep documentation up to date to reflect evolving regulations, operational changes, and lessons learned from audits or incidents. This living documentation becomes a strategic asset in maintaining resilience and demonstrating compliance during assessments.
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Charles Weaver is CEO and co-founder of the MSPAlliance