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Glossary: Identity and access management

Aug 27, 2021
2 min.
IAM – An important security factor in many companies. But its exact functions are not always clear: authorisation, authentication or both?
Michael Taller

Identity and access management – a popular buzzword in the digitech industry. But what exactly is behind the collective term and why is it so valuable for companies?

IAM stands for identity and access management, an umbrella term that comprises a number of functions. While identity management is based on the digital identities of users and is dedicated to the administration of user information necessary for identification, authentication and authorisation, access management covers the practical implementation of the three core areas. Any time a user wants to open an application, a system or a resource, a check of the existing information about the user as well as any associated access rights and the respective roles is initiated. In a nutshell: IAM describes the identity and access management of digital identities.

Digital identity as a prerequisite for the access life cycle

A digital identity is the starting point for IAM and is created for each individual user. It is updated, monitored and provided with new rights throughout the entire access life cycle. With the help of IAM systems and digital identities, administrators have the tools they need to grant employees, external visitors as well as partners from all over the world certain rights for their own systems, to change them if necessary or to regularly enforce security policies – without creating critical security gaps. This is done manually or on the basis of previously defined rules and user concepts such as the organisational structure of a company. The process uses one core piece of software which optionally works over several installations on dedicated hardware or on a virtual infrastructure set up for the IAM. It functions as a broker and can draw on information from various databases and directories.

Authentication versus authorisation

IAM’s most important function is authentication: the user verifies their digital identity to the system and thus proves that they are who they claim to be. This may involve a user name and password query as well as multi-factor procedures involving security tokens or biometric features. After the identity has been successfully verified, the next step is authorisation. As the second key function, it determines which systems or resources the user is allowed to access. To do this, it uses previously defined rules and role concepts and grants the user his or her individual access rights after the check.

In addition, IAM systems allow users to change passwords autonomously and thus accelerate access to multiple resources via a single sign-on service with a single identity. Companies, on the other hand, receive support for hybrid IT environments that include on-premise systems and SaaS applications. 

IT security: a key competitive advantage 

Nowadays, identity and access management is inextricably linked to any company’s IT security strategy – starting with access authorisations, which often serve hackers as a point of attack for sensitive corporate networks. A robust IAM system prevents this by consistently applying access rights for the entire company and complying with all in-house policies. As a result, users only receive the functions and authorisations they need for their everyday work. In this way, IAM can also function as an additional security layer. Not only that, the implementation of IAM systems also enables an increase in productivity and thus competitiveness in the market: companies can also grant external users such as customers, partners and suppliers access to their own network via targeted access rights and their extension to mobile apps and on-premise applications. This improves the way outsiders are integrated, makes collaboration more effective and boosts satisfaction for all parties. If applied consistently, this can have a positive impact on operating income. Another thing worth considering is the potential for cost savings: greater staff autonomy in IT-related issues such as changing passwords means fewer calls to the help desk, thus also lowering costs while at the same time making security more user-friendly for the staff and the entire company.

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