Understanding the Importance of IAM (Identity and Access Management)

Understanding the Importance of IAM (Identity and Access Management)

Does your organization manage remote employees who need access to company resources through the cloud? Or does your business enable customers to create accounts that streamline their payment and order information? Whenever you manage users who need to access multiple types of data in order to do their job or purchase a product, you will need a strong set of standards to help you implement access controls and protect your information systems from cybersecurity threats. Identity and Access Management (IAM) systems are designed to do just that. Read on to learn more about the importance of IAM for your organization. 

What Is IAM? 

Identity Access Management (IAM) is a growing field focused on ensuring that data shared across your organization is accessible to the right people, and remains inaccessible to those who should not have access to it. Gartner sums it up by saying that a good IAM program “enables the right individuals to access the right resources at the right times for the right reasons.” 

What Is the Importance of IAM? 

IAM is important for ensuring that the right employees can access the data they need and have the property security clearances for the job they need to accomplish. As the cybersecurity industry became aware that user login credentials were a significant factor in data breaches, the importance of IAM solutions related to user credentials and access privileges grew. IAM systems use standards and protocols to protect individually identifiable information and ensure that user credentials remain secure and uncompromised. 

Why Do We Need Identity and Access Management? 

As cybersecurity threats increase and the complexity of data analysis and risk management expand across the organization, as does the need for robust systems that protect different types of user information and the data it is designed to access. In the wake of a growing remote workforce, because of the pandemic, the importance of IAM solutions has surged. 

What Are the Important Components of IAM?

IAM standards and protocols are plentiful, but the Identity Management Institute breaks IAM down into a simple triad called the AAA model. AAA stands for authentication, authorization, and accounting, and these three protocols work together to create a full IAM system. Here’s more detail: 


Authentication tools ensure that the person signing on is who they say they are. There are three basic types of authentication: 1) information the user knows, like a password or answer to a security question, 2) an object in the user’s possession, like a badge or key fob, and 3) a unique biometric, like a fingerprint. IAM authentication tools also include two-factor (2FA) or multi-factor authentication (MFA), which employs a combination of the aforementioned categories to strengthen security – for example, your password and your smartphone. IAM tools also include single sign-on (SSO) services, which enable the user to access all applications through one central login. 


Authorization includes identity governance; the system administrators manage users’ access privileges and the IAM system will ensure that users are only accessing data they absolutely need to perform their jobs. In a strong IAM system, data access is informed by central administrative decisions about employee roles and user needs. 


Finally, accounting includes record keeping, user activity logs, and continuous monitoring to keep a close watch for anomalous behavior indicative of potential cybercrime. Accounting allows your IT administrators to implement access controls as quickly as possible in the event of a breach.  

What Are the Benefits of Using IAM?

There are numerous benefits to implementing an IAM system, from preventing breaches to lowering your IT overhead: 

1. Prevent Breaches 

When users are required to sign-on to multiple apps and input passwords numerous times to access different information, they tend to create passwords that are easier to input and remember. With authentication tools like SSO and MFA, users no longer need to make multiple login attempts or remember multiple passwords. These tools take the burden off of the user to come up with “difficult” passwords to prevent breaches and information security incidents. Instead, login will require information that the user has readily available, like their fingerprint or the answer to a simple security question that targets information only they would know. Most SSO and MFA tools also encrypt data and may use hashes to protect your password databases.

2. Integrate Identity Governance and Authentication Tools

IAM makes it easier to keep track of user roles and prior authorizations, and to change those roles as employees are promoted or terminated. IAM also integrates your authentication infrastructure with identity governance, so that your data security policies are informed by top-level decisions about employee roles and are more likely to be implemented consistently across your organization. A 2016 EURASIP Journal on Information Security article suggests that IAM could also potentially employ “dynamic policy management processes” to automate policy changes based on authentication data. IAM continues to evolve, freeing up IT personnel to focus on higher-order issues instead of manually inputting user information. 

3. Improve Compliance

Whether you have to stay compliant with GDPR or NIST password guidelines, organizations typically have multiple overlapping compliance requirements. Moreover, these requirements are constantly changing. However, most of them require strict access controls. Having a central IAM system helps you to keep all user credentials, login information, and passwords in one place to streamline your monitoring efforts; this allows you to manage and export your records for multiple regulatory needs at once. 

4. Streamline Provisioning and Deprovisioning

When an employee is terminated or a customer leaves their account idle for a long time, their login credentials become potential risks for your organization’s data. A strong IAM system will make deactivating and deprovisioning accounts quick and easy, especially in the case of an employee leaving the company. When a user has access to a variety of different applications, there can be a lag time between the employee’s last day and the deactivation of their account. IAM makes it easier to deactivate everything in one fell swoop, reducing the risk of a security breach.

Implementing IAM in Your Organization 

The bottom line? Don’t underestimate the importance of IAM. IAM systems can help your organization maintain compliance with multiple standards; from NIST’s password requirements to SOX compliance. A good IAM system evolves with your company’s data security needs, keeps your user information in one place, and makes it easier to implement central IT governance. The right compliance management software can help you to automate and keep track of the various components of your IAM program, tightening your security, and freeing your IT management up to respond to cybersecurity threats quickly.