Managing identity is an essential element in organizational context given the increased use of technology in the current world. With increased establishment of businesses, there is increased use of the internet and increased adoption of cloud services hence requiring efficient identity and access management. 

In this article, we will discuss what it costs when identity management is not done effectively and what expenses can be incurred both directly and indirectly. We will also discuss strategies for good identity management and how you can improve on the existing system to help you avoid the consequences of poorly managed systems.

The High Cost of Poor Identity Management

There is always a risk of serious monetary consequences when identity management practices are not optimized within your business. Such costs are often fiscally unapparent until they surface in the form of security violations, operational slippages or non-compliance. Let’s explore some of the key areas where poor identity management can prove costly:

Cybersecurity Malpractice and Data Breaches

• Inadequate access controls and poor identification verification lead to high risk of unauthorized access to information.
• Incidents of data breaches can cost regulatory fines, legal expenses and reputational loss, which triggers loss of business.
• Incident response, forensic analysis and system recovery activities are usually very expensive.

Operational Inefficiencies

• Evaluations of user provisioning, deprovisioning, and access management when done manually can be tedious and susceptible to some errors.
• Lack of proper identity management results in wasted time, because employees take a lot of time to log in or do not have access to the necessary tools.
• Other issues such as having duplicated accounts, and orphaned accounts, and unequal access rights can also aggravate operational problems.

Compliance Violations

• Backward of meeting obligatory rules of certain industries like GDPR, HIPAA or PCI-DSS fines and penalties may be severe.
• When identity systems are not well managed, it becomes difficult to keep audit trails and demonstrate compliance to regulatory requirements which in turn poses high risks of non compliance.
• It takes a lot of time and money to remediate a system in order to bring it back into compliance as needed.

Increased Support Costs

• Poor or ineffective identity management processes result in increased user calls, complaints or requests likely to be from users who have access problems or account issues.
• Solving such problems could become a time-consuming process that causes pressure on IT departments and raises operational expenses.

Reputational Damage

• Cyber security threats or regulatory non-conformities pose a significant threat to the reputation of an organization and consequently the market value of an organization.
• Restituting damaged or lost trust for a business can take a long time and cost quite a deal of money.
• These hidden costs can very soon add up and reduce the level of profitability and competitiveness of an organization. It is, therefore, possible to avoid such risks by adopting efficient identity management practices and greatly reducing costs.

Issues with the Identity Management Systems

It is important to state that there are numerous inefficiencies in identity management systems due to several factors such as; outdated technologies, silo processing, and no proper governance. Let’s explore some common inefficiencies and their potential impact:

Disparate Identity Stores

Companies currently continue to use multiple identity stores like AD, LDAP directories, and IPaaS identity providers.

These multiple identities may be in sync with each other and easy to manage in an ideal world, but they are not and this causes some to be inconsistent and full of errors.

Isolation of identity stores can create problems with visibility and management of access rights.

Manual Processes

The handling of user provisioning, deprovisioning and access management can be manual thus time consuming and prone to errors.

It becomes relatively easy for people undertaking such procedures to make mistakes that compromise the security of the business and its operations. Automating a business process can prevent it from being scaled up and slow down an organization’s response to emerging business demands.

Absence of a Central Body

In decentralized identity management, organizations may develop inconsistent policies and procedures in their different departments or business units.

A decentralized approach creates the problem of duplicated work, uneven security measures and higher security threats. Auditing and reporting can be problematic, and thus, it can be hard to prove the organization’s compliance with the regulations.

Outdated Technologies

Proprietary identity management solutions may not be designed with current functionality and options, which could include cloud services or mobile device management or a sophisticated authentication system.

Old technologies are security risks that slow down an organization’s ability to incorporate new technology or business paradigms. The main issue of the modern world is that maintaining and developing legacy systems is generally expensive and requires many resources.

Siloed Identity Processes

Identity management processes are most of the time implemented in different departments or business units and this results to inconsistent approaches in managing identities.

When departments fail to work together, there are usually overlapping of activities, different approaches to use in policies and high expenses.

Isolated procedures become a problem when there is a security breach or a compliance check in an organization.

These issues if detected and tackled accordingly will help organizations to increase efficiency in identity management, decrease operational expenses and improve on security.

Effective Identity Management Strategies

Continuous and effective identity management practices are an important factor towards avoiding the hidden costs that come with ineffective practices. Here are some best practices to consider:

Single Identity Point

• Implement identity management solution that pulls identities from multiple locations into one master source of identity.
• Identity management in the centralized manner facilitates the control of access, promotes better control and ensures compliance to policies within the organization.
• It may be useful to deploy cloud identity management solution for better scalability, flexibility and lesser maintenance.

Automation and work flow integration

• One should also be able to implement automated methods of user management such as provisioning and deprovisioning, access management .
• Ensure the seamless connection of the identity management process with the existing organizational systems like the HR systems, ERP systems, cloud services, etc.
• Automation can enhance the organization’s performance since it decreases support costs, simplifies policies, and standardizes them.
• Access control is the practice of regulating access to computer resources based on what type of access is needed to accomplish a specific task or set of tasks.

• Enforce user right management where users are given privileges depending on their position on the job ladder.
• RBAC is easy to administer and requires fewer access control privileges and ensures that it does not violate the principle of least privilege.
• Always make sure to periodically revisit and change roles and accesses because of growing organizational needs or transfer of staff.

Multi Factor Authentication or more commonly known as MFA

• One recommended to execute MFA, which is significant for the improvement of security and the reduction of the possibility to intruders’ access.
• MFA uses more than one factor, passwords, biometric data, or tokens, while adding an extra layer of security.
• One should always look into adopting risk-based or adaptive authentication solutions that meet the core fiduciary interests without compromising the next level of the user experience.

The two final recommendations for improving audit quality are continuous monitoring and auditing. Using several formal methods, it is necessary to establish control and supervision so that the probable security breaches or policy nonconformities could be identified and addressed.

1. Document significant audit actions and make use of automatic reporting instruments with intent to facilitate the passing of compliance audits and supply proof of conformity.
2. Use audit logs and analyze them from time to time in order to pinpoint the risks or issues with regard to your identity as a management strategy.

User Education and Awareness

• You should create awareness to users about good password practices, secure authentication, and other issues touching on privacy and security such as credential sharing, and phishing attacks.
• Incorporate security awareness training for the employees as a normal practice because security is everybody’s business.
• Users should be encouraged to report any activity that looks like a possible security incident or event.
• Periodic reviews and optimization are the two most common approaches to supply chain management.

• Ensure that your identity management practice is adequately updated at the right time to suit your business needs, development of new technologies and the latest security threats.
• Invite the stakeholders from different departments to provide their feedback and to find out their concerns.

It is important to know what best practices exist within an industry and what regulatory changes are occurring, as well as new trends in identity management to maintain the efficacy and efficiency of processes in place.

Begin your free trial of our Identity Management solution now and see the advantages of proper identity management for yourself. Save time, money and increase protection with our integrated, efficient and easy to use system.

Conclusion

Some of the key features of identity management include; centralized management, automation, role based access control, multi-factor authentication, continuous monitoring, user awareness and periodic review.

By strengthening identity management as a business practice, it is possible to save money on inefficiencies that result from poor identity management processes and also improve security, user satisfaction and organizational compliance.