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Identity and Access Management (IAM) is a cybersecurity discipline that helps organizations manage digital identities using a framework of policies, processes and technologies to control user access to internal systems and resources. IAM works to verify both human and non-human users to facilitate access for authorized users, block unauthorized access by malicious actors or even prevent well-meaning users from finding their ways into places they shouldn’t be.
In this guide, we’ll define IAM and why it’s important, then dive into the nuts and bolts of how it works. We’ll also discuss cloud-based IAM solutions, their key components and benefits, the challenges of IAM and six best practices for building an effective IAM strategy.
Identity access management (IAM) is how companies ensure that only authorized users can access certain networks, data and resources at the right times. These systems are critical for addressing the wide array of security vulnerabilities that businesses face today as a result of increasing cyber threats, employing remote and distributed workforces and regulatory pressures.
IAM goes beyond just authenticating human users — it manages and protects software-based, non-human identities, like bots, AI agents, devices, and automated processes that access systems and data. IAM has a two-fold purpose: to maximize security and enhance user productivity by correctly and efficiently mediating every access request within an IT environment. It accomplishes this through both identity management and access management:
IAM is an absolutely critical component of modern business, the foundation of an organization’s IT security infrastructure and the first line of defense against cyberattacks. It’s necessary to gatekeep who has access to what to mitigate risk and recognize and detect unusual behavior. And as more companies adopt cloud services and automation, it’s vital that they secure their non-human identities, which often have high privileges and are prime targets for attacks.
While we tend to think of the security benefits of IAM before anything else, it also streamlines business processes and improves productivity. Single-sign on (SSO) is a great example of this, as it allows all users to authenticate once and gain secure access to all authorized services and applications. It helps eliminate password fatigue (and the risk of notes scribbled with passwords floating around the office), reduces the number of password reset requests for the IT team, and enables employees to work faster. IAM also automates the provisioning and deprovisioning of the ILM, reducing a significant workload for IT and helping ensure that accounts get closed as soon as someone departs from the company. Put simply, IAM protects both organizations and employees.
IAM works by employing a structured process to govern every attempt to access a company’s resources. IAM management solutions authenticate credentials against a database and then authorize the entity’s permissions, only granting them the appropriate levels of access. The four pillars of IAM include:
This process is also referred to as either “identity management” or “Identity Lifecycle Management (ILM)” (as we mentioned earlier), and is how user identities are created, maintained and deleted. Human and non-human users are assigned distinct digital identities, which are made up of a collection of distinguishing attributes like the user’s name, job title, login credentials and access rights. These identities are stored in a central database; the IAM system then pulls info from the database to validate users and their permissions. Typically, IT and Cybersecurity teams handle manually creating and deleting users (provisioning and deprovisioning), but the process can also be automated with some IAM systems by providing it with organizationally defined rules for user creation.
This is how user identities are verified. When a user logs into a system or requests access to a resource, they input some form of credentials to verify their identity. These credentials are called authentication factors, and include passwords, MFA, two-factor authentication (2FA) or fingerprint scans for humans, or digital certificates for non-human entities. The IAM system then checks the credentials against the database and grants access if there’s a match.
Authorization and authentication are linked processes, and authorization can’t happen without authentication happening first. After a user proves their identity, the IAM system again refers back to the database to check which privileges are assigned to the user and authorizes them with exactly the privileges they should have — no more, no less.
This is an important step because it ensures two things: that the IAM system is working as it should, and that users aren’t abusing their privileges (and don’t have access to resources that they shouldn’t). It’s also important for regulatory compliance, as mandates like General Data Protection Regulation (GDPR) require organizations to restrict user access rights in some ways.
Working together, the four pillars of IAM prevent unauthorized access by bad actors while also enabling users to do everything they need to do with access to the right resources and information at the right time.
Traditional IAM tools and solutions are generally managed by a server on the physical premises of an organization, which is referred to as on-prem. But most businesses have turned to cloud-based IAM solutions for their scalability, cost effectiveness and enhanced security thanks to features like SSO and MFA. They’re also particularly good solutions for organizations with a remote workforce or multi-cloud environment because they simplify user access, and improve compliance and operational efficiency with centralized management and automated processes. Here are a few examples of cloud-based IAM tools and solutions that businesses are embracing today:
Identity-as-a-service (IDaaS) solutions offer flexible identity management, especially compared to on-prem solutions. IDaaS solutions are ideal for complex networks where users are logging in from Windows, Mac, Linux and mobile devices from across public and private clouds. They eliminate the need for distinct systems for remote users, contractors and customers, and ensure access control across all systems.
Some user accounts are high-value targets to cybercriminals, who can gain access to sensitive information and cause significant damage to organizations if they manage to hack them. To protect businesses from external (and possibly internal) attacks, these users, who are typically in roles like system admins, are assigned higher permission levels via privileged access management (PAM) solutions. These solutions isolate privileged identities from the others and use credential vaults and just-in-time protocols for added security.
While IAM and customer identity and access management (CIAM) both manage who can access certain systems and resources using authentication measures (passwords, MFA, etc.), IAM and CIAM aren’t the same. For the most part, IAM systems present fewer obstacles for users to meet in order to gain access to systems or resources. They may just need some combination of a username, password, and biometric credential and typically don’t need to store much, if any, personal information inside the system. But for customers, it’s different. They often have all sorts of sensitive information stored in a system, like credit card or social security numbers. So CIAM systems typically have more stringent measures in place to access those accounts, including limiting who within the organization can see customer data.
Federated identity management (FIM) systems link a user’s identity across multiple, separate identity management systems to enable authorized users to access multiple domains and applications using a single set of credentials. It allows users to move quickly between systems without having to log in separately every time, while still maintaining security. It supports SSO but takes the concept a bit further. FIMs rely on strong understandings between identity providers and service providers of what attributes (location, phone number, etc.) will represent a user while online. The user is authenticated across multiple platforms once those credentials are verified.
API tools are the primary gateway to an organization’s data and business logic in cloud-centric environments, so it’s crucial that organizations have tools to manage them. API access tools are specialized software solutions and platforms that help organizations manage, secure, monitor and enforce rules about how applications, developers and other services interact with their APIs. API access is generally governed by API management platforms (i.e. Google Apigee, Azure API management), dedicated API security solutions (i.e. Salt Security, Traceable) and IAM platforms (i.e. Okta Auth0, WSO2 Identity Server).
Identity governance and administration (IGA) focuses on the administrative and compliance aspects of IAM, ensuring that access policies are correctly designed and followed over time. This involves access and certification review to regularly verify that users still need the permissions they have; automated ILM for provisioning and deprovisioning; and segregation of duties (SoD) enforcement to split critical functions among different users to prevent fraud and errors by ensuring no single person has total control over a complete process.
While there are many different types of IAM solutions and tools, they all must contain certain key components to work together and create a cohesive framework that secures resources and manages identities. Those components include the following (some of which we’ve discussed above):
As we mentioned earlier, this is another name for the administration process of IAM, which focuses on the creation, maintenance and secure storage of digital identities, including all associated identifying attributes (names, roles, departments, etc.). It ensures every person and non-human entity has a single, unique digital identity within the system.
This is the process of verifying that a person or entity is who they claim to be, and is the first gate in the access process. It challenges the user to provide proof of their identity, whether that’s a password, biometric, MFA, etc. If it’s correct, the user is granted temporary trust to move on to authorization.
During this process, the IAM system determines what an authenticated identity is allowed to do and what resources they can access.The identity is checked against the requested resource (i.e. the user attempted to open a file) and the appropriate permissions are granted (i.e. they’re allowed to open the file if they’ve been given access to it).
In general, access control tools allow organizations to define and enforce authorization policies on both human and non-human users. Two common frameworks include:
Role-based access control (RBAC): Access is granted based on the user’s job function or role. It helps streamline setting user permissions and reduces the risk of giving users more privileges than they need.
Attribute-based access control (ABAC): Access is based on a combination of attributes tied to the user (i.e. is a “Developer” AND is in “Engineering Department” AND is accessing from “Corporate Network”). It’s a much more granular control than RBAC.
PAM is a critical subset of IAM focused entirely on securing privileged accounts with high levels of access. It requires credential vaulting and session monitoring and enforces just-in-time privileges.
Identity federation establishes a relationship of trust between two different organizations or systems to allow a user’s identity to be trusted and accepted by the external service provider. SSO enables a user to authenticate once with their primary identity provider, which then authorizes them across all other applications or services without re-entering credentials.
This is the accountability pillar of IAM, which involves the continuous tracking and recording of all identity-related events within the system — every login attempt (successful or not), every access request, every admin change to user permissions. IAM systems generate audit logs that are important for detecting suspicious activity and for compliance. They provide the detailed evidence required by regulations like GDPR and HIPAA, demonstrating that access controls are enforced and regularly reviewed.
This component of an IAM system ensures that it remains compliant, efficient and accurate over time. Lifecycle management automates the management of identities, from provisioning to deprovisioning to eliminate security gaps. This is also the process in which the tracking and audit reports that we mentioned above happen.
The robust authentication methods that are used in IAM systems, like MFA, 2FA and biometrics, make it significantly harder for external attackers to succeed with common tactics like phishing or credential stuffing. Enforcing strong credential management limits the ways malicious actors can gain unauthorized access, mitigating the risk of a breach caused by stolen passwords.
Features like SSO help to streamline the user journey for both customers and employees by eliminating the friction that comes with logging in and authenticating their identities. It also eliminates password fatigue, increases productivity and encourages users to adhere to security policies rather than seeking risky workarounds to avoid having to log in repeatedly.
Various legal mandates around data privacy and security are automated in IAM systems, such as limiting access to sensitive data based on roles and locations. And the audit logs that IAM systems generate enable organizations to quickly produce the documentation and audit trails required to demonstrate compliance to regulators, avoiding costly fines and penalties.
IAM boosts IT and business efficiency by automating the entire ILM process of provisioning and deprovisioning identities. New employees instantly receive the correct accounts and access rights based on their roles, and access is immediately revoked when an employee leaves. This automation reduces admin burdens on IT teams, frees them up to focus on strategic work, and reduces error in assigning user permissions.
IAM systems minimize the risk posed by both negligent and malicious internal users by enforcing PoLP to ensure users are granted only the minimum access necessary for their roles. In the event that a user either goes rogue or has an oversight that causes an issue, the reach of their actions is significantly reduced. PAM solutions also help by monitoring and restricting high-level accounts, recording their actions to deter malicious activity and provide forensic accountability.
As vital as IAM systems are to the security and operations of an organization, implementation and maintenance are far from simple. The goals of IAM are clear, but the road to achieving them is peppered with complex technical and operational hurdles. From integrating legacy systems with new cloud platforms to managing the sheer number of identities, businesses often find themselves grappling with issues that can lead to security gaps, bottlenecks and frustration for staff and end-users. Here are some of the more common challenges — and how to address them.
The technical hurdles of integrating cloud-based IAM systems with legacy solutions are significant, in large part because many legacy applications and databases weren’t built to communicate using IAM protocols (SAML, OAuth, SCIM). Integration usually requires extensive workarounds, and even the smallest change runs the risk of causing unexpected failures or audit red flags. But middleware and identity brokers bridge the gap between modern and legacy, enabling your organization to apply modern authentication policies to legacy apps without rewriting old code. You can also update high-value legacy apps to interact with IAM via SAML, OAuth or custom APIs.
Rolling out a comprehensive, modern IAM solution involves more than just software licensing fees. Between hiring specialists proficient in complex IAM architecture, replacing components of the old system that are incompatible with the new one, and the costs of customization and integration services, the expenses can be sky high. But a phased deployment can help control spending rather than going with a large-scale rollout. It may also be better to prioritize the modernization of legacy applications that are expensive to maintain and secure rather than paying to integrate all old systems. Cloud-based IAM systems have the advantage of operating on pay-as-you-go models, which are more scalable and cost effective compared to traditional solutions.
Making things too complicated and adding too much friction to the user experience can sabotage your IAM efforts. Overly frequent password changes and poorly implemented MFA could lead to users writing down passwords, which leaves them extremely vulnerable to loss or theft, or unauthorized account sharing. Make the secure path the easiest path: implement SSO across all frequently-used applications, adopt biometrics to eliminate the need for passwords, or use adaptive MFA to prompt the user for a second factor only when the login seems risky (i.e. logging in from a different country).
It’s rare for modern IT infrastructure to be housed in one location. Typically, organizations either manage identities across a hybrid environment of on-premises and cloud or a multi-cloud environment. But because every cloud has its own native IAM framework, it can be really difficult to enforce consistent policies and manage the massive volume of identities (especially non-human ones). Centralize authentication with identity federation, secure non-human identities with the same rigor as you would human identities, and standardize policies. Do the latter by establishing policy-as-code (PaC), and use tools that sit above native IAMs to translate your policy definition into the required technical rules for every platform.
Identity is one of the primary attack targets, and hackers are adept at stealing user credentials to slip into systems undetected. And once they’re in, the damage they can do and the information they can gain access to can be catastrophic. However, moving beyond passwords to much stronger authentication methods, like MFA or biometrics, are a huge step forward in security improvements. Enforce PoLP and just-in-time access to protect critical systems, secure admin accounts with the highest levels of security and pay close attention to IAM logs to detect and flag anomalous behaviors.
Your organization needs to be ready to prove to auditors that you have control over user access. They will be asking for detailed logs showing who has access to sensitive data, why they do and evidence that your organization is conducting regular audits. Manually collecting this volume of data is nearly impossible. But if you leverage an IGA platform, you can automate the access review process to prompt managers to certify or revoke permissions, creating that paper trail that auditors want to see. Establishing RBAC or ABAC models simplifies compliance and makes auditing access at scale easier by grouping permissions based on roles or attributes.
Developing a robust and future-proof IAM strategy is the foundation of your organization’s cybersecurity plan, essential for protecting critical data and enabling business agility. As organizations navigate the complexities of cloud migration, hybrid work and the increasing volume of non-human identities, a successful IAM framework requires clear planning beyond just installing software. Here are six best practices that security leaders should adopt to build a centralized and scalable IAM strategy that minimizes risk while maximizing user productivity.
Passwords are simply not enough to protect user accounts anymore. MFA should be implemented everywhere that it can be because it’s the most critical defense against credential theft, which remains the leading cause of data breaches. And don’t just prioritize privileged or customer accounts — it should be used for every user across all applications and systems. Opt for more secure methods like certificate-based authentication over SMS-based codes.
Some of the most damaging breaches are the ones that gain access to privileged accounts with administrative control over critical systems. Grant these accounts just-in-time access so they have those high-level privileges only when they need them and then revoke them after a set time. Also implement credential vaulting and session monitoring to store and automatically rotate credentials and to record privileged sessions for auditing/forensic review.
IAM is not a set-it-and-forget-it task. It requires frequent monitoring and review to prevent issues like privilege creep, which is a major security risk. Use IGA tools to systematically examine who has access to what tools and why, and ensure all access strictly adheres to PoLP.
Identity federation establishes trust between your organization’s central identity store (the identity provider, or IdP) and external services (service providers, or SPs). Adopt a central IdP to configure all SaaS applications and public cloud consoles to rely on it for authentication. Identity federation enables SSO, which is critical for simplifying the user experience while centralizing security over the login process.
Manual provisioning and deprovisioning can introduce errors, security gaps and inefficiencies into your IAM strategy. But ILM automates these processes, whether a new employee joins, an employee leaves or they change roles.
For your IAM strategy to truly work, all of your employees need to be trained on all security processes and the importance of following those processes needs to be emphasized. Security is only as strong as its weakest link, which is often human error. Conduct mandatory security awareness training that doesn’t just settle on generic topics, but gets more granular and educates employees on the different types of threats to the organization, from phishing and social engineering to never approving an MFA request they didn’t make.
Identity and access management has evolved from being a simple gatekeeper into the absolute centerpiece of modern cybersecurity and business operations. That evolution is due in large part to the interweaving of AI, machine learning and Zero Trust security models into IAM strategies, and it will continue as emerging technologies like passwordless authentication, adaptive access controls and decentralized identity grow and mature. It’s critical that organizations keep up with developments in IAM technology to shield themselves and their customers from ever-developing cyberthreats, remain compliant, and make it easier to manage digital identities for humans and non-human users alike. The most effective IAM strategies will empower organizations to balance security and user experience, and to overcome the challenges of implementing IAM processes into their business for the safety of their employees and customers.
Examples of available identity and access management tools include comprehensive platforms like Okta, Microsoft Entra ID (Azure ID) and AWS IAM to specialized solutions like CyberArk (for PAM), SailPoint (for identity governance) and SSO/MFA services.
User lifecycle management is the process of automating an identity’s access rights from the moment they join an organization (provisioning), through any role changes (maintenance) to when they leave (deprovisioning). It aims to ensure access is always appropriate and revoked as soon as is necessary.
While definitions vary, the four essential pillars of a comprehensive IAM strategy are generally considered to be Authentication, Authorization, Administration (or Governance) and Audit (or Monitoring).
A common example is an employee using SSO: they enter one password and then use MFA once (Authentication), and the IAM system grants them access to all their work applications (Authorization), like cloud drives, email and CRM, without having to sign in again.
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