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Individual digital identities have always been necessary to access sites and applications, but back in the day, you had to log in every single time with your username and password. The website or app stored this info for the session, and once you left the site or logged off, you had to do it all over when you wanted access again.

Repeated logins are cumbersome for individuals and businesses as they waste time. But they were a necessity since users couldn’t stay logged in because that would be a risk to security and make the account vulnerable.

Hackers still find ingenious ways to access systems, causing billions of dollars in irrecoverable damage to companies – cybercrime damages are expected to reach a total of $6 trillion by 2021.


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Making it easier for hackers are employees who practice lousy password hygiene – 91% of employees understand that it’s risky to use the same passwords across business accounts, but 59% still do it. It’s not even their fault because 61% feel that they’ll forget the password easily if they set a new one.

That’s why it’s essential to have some measure of security in place. Organizations need to be quick and efficient with their security processes. At the same time, employees must learn to adhere to the given guidelines.


What Is Federated Identity Management (FIM)?

FIM is a system that allows users to share company applications by using the same credentials to log in across different domains.

Simply put, federated identity management allows authorized users access to information on different domains without mandating them to log into the domain every time.


Understanding Federated Identity

A federated identity links the user’s identity from one domain so they can access different networks, software, applications, and business ERP or SAP portals that they need for work. It signals mutual trust between two or more domains.

For instance, users from a company can access partner or subsidiary portals to access the information they need to fulfill their job responsibilities and roles.

All a user needs to do is authenticate their identity on one domain or network, and they get access to all other partner networks to get work done efficiently. This also removes the need for repetitive logins.


How Federated Identity Management works

To understand how it works, let’s say your business contracts with another company. Without federated identity, this would involve setting up an account on their website where you’d need a username and password to access their domain.

If an employee left you, they would have to cancel their account to remove access.

But if both companies use an FIM system, employees would only need to login once on your company SaaS portal with a provided username and password (biometric ID or smart card). Once in, they’d simply click on the partner company page on the portal, which would redirect them to a request page to authenticate access.

Once they say yes, they’re granted access and redirected to the partner company’s page, with a welcome screen displayed and authentication information attached.

The portal directly verified the employee’s data through Security Assertion Markup Language (SAML) or OpenID as both similar languages.

They didn’t have to provide the credentials again to log in separately. The next time when they login to your portal, they’ll get direct access to the partner company’s page with a simple authentication request.

Your partner company doesn’t maintain external accounts. Instead, managed identity providers are employed to deal with account management and costs. When a user leaves, the ID provider organization will no longer be able to verify their request, making it safer and more cost-efficient for all parties.


Advantages of deploying Federated Identity Management in the workplace

Partner organizations can share portals, business software, and networks with restricted access to protect sensitive data while enjoying faster and more flexible work, cost savings, and pooled resources.

On an individual user level, users only need to remember one username and password, taking care of their fear of forgetfulness, as mentioned in the beginning.

Companies can avoid their administrative costs by having a local identity provider to assign and manage digital identities in different domains and networks. It makes data management simple while decreasing storage costs.


Single Sign-On (SSO) Vs. Federated Identity Management (FIM)

Put simply, FIM allows SSO, not the other way around. SSO enables users to access different web apps at the same time with a username and password. They’re more like password managers that allow HR, payroll, communication, finance, and other internal apps to be accessed with the same password.

It sounds similar to federated identity management, but it isn’t. SSO is a tool that can be used in the FIM model. FIM is an arrangement between organizations to share user IDs for multiple organizations.

Think of it as a “Sign In With Facebook” button for your business. In essence, you’re already signed in to Facebook, but you’re using the same credentials to log into Instagram or Spotify.

On top of that, it includes a robust system for reviewing and authenticating those login credentials with the service provider.

In short, SSO authorizes a single sign-in to various systems in one organization. In contrast, federated identity allows access to different applications across different companies. That’s why FIM systems may offer SSO, but SSO will not give your FIM capabilities.


Use-Cases For Federated Identity Management

Federated identity management is useful in many access management cases. For instance, it can bring suppliers, distributors, and other stakeholders on the same network for better communication and expediting projects faster.

It can even let organizations onboard new employees after mergers and acquisitions. For research, education, or tech-based organizations, talented researchers and technologists can share access to systems and resources for better research without having to provide extra credentials.

For instance, researchers from different universities can share the same study data from a combined knowledge center for their research, preventing unauthorized access or non-compliance with regulations.

Single sign-on to social media sites for business purposes is also possible through Federated Identity management, where a single login allows access to multiple business social accounts.

For IT professionals implementing IAM systems, Federated Identity management eliminates redundant data and systems, while delivering a robust, powerful, and secure IAM. It also allows their partner companies to reduce IT-support costs, such as requests for password resets and more.


Sherweb chose to use federated identity management with its portal using Azure Active Directory and OpenID to provide our partners with a secure experience to a multitude of applications. Get in touch with us to learn more.

Written by The Sherweb Team Collaborators @ Sherweb