The Hidden Value of B2B IAM: Unlocking Security, Efficiency, and Cost Savings
Managing third-party identities is an increasingly pressing issue for most mid-to-large organizations. Not only does the rising number of external identities present a security risk—Gartner estimates that costs resulting from supply chain attacks will rise from $46 billion in 2023 to $138 billion by 2031—but they can also negatively impact operational efficiency, user experience, and, ultimately, revenue.
This is where B2B IAM (Business-to-Business Identity and Access Management) comes in. According to an analyst report from S&P Global, B2B IAM – the hidden value of third-party identities implementing a B2B IAM solution can protect against identity-based attacks, act as a pillar for managing third-party risks and establish a zero-trust foundation, streamline operations, reduce the costs of administering non-employee identities, and even drive new revenue streams. Although B2B IAM is technically a security solution, it is equally valuable for operational efficiency and business enablement. It should be at the forefront of any forward-thinking C-level executive’s mind.
What is B2B IAM?
Although the report notes no definition of B2B IAM, it has much in common with Workforce IAM (WIAM), Customer IAM (CIAM), and Identity Governance and Administration (IGA) and can even be considered a bridge that spans all three. In broad terms, B2B IAM is a comprehensive framework that enables organizations to securely manage and simplify access to applications and services for external business entities such as partners, suppliers, distributors, and enterprise customers.
Use cases for B2B IAM extend to any organization with a distributed business model, including, but not limited to, those in retail, financial services, manufacturing, or supply chain and logistics. The report gives the example of an insurance firm with many offices, websites, and apps, with privileged users that include direct employees, independent contractors, and brokers who conduct business with end customers through access to web or SaaS applications and data.
B2B IAM vendors offer an array of technical capabilities, including those shared with WIAM and CIAM vendors—such as authentication/multi-factor authentication (MFA), single sign-on (SSO), authorization, registration and onboarding, user journey orchestration, and user consent management—as well as those particularly important for B2B IAM, including user delegation, relationship-based access control (ReBAC), and self-service access requests.
The Importance of Managing External Identities
Contrary to what one might expect, the S&P Global report reveals that more external identities touch the average enterprise’s cloud, network, and devices than “traditional” employees. Although employees comprise the single largest group of users accessing corporate networks (29%), the groups comprising the non-employee external identities category customers, partners, vendors, contractors, etc., account for 64% of the total. Clearly, although managing employee identities is essential, managing external identities is the more pressing challenge.
Why Use a B2B IAM Solution?
As noted, supply chain attacks are becoming increasingly frequent. These attacks, by definition, involve third parties. Respondents are aware of external entities’ role in supply chain attacks: nearly one-quarter cited external identities as a top three target for cyberattacks.
Logically, one would assume that, as B2B IAM manages and protects external identities, respondents would allocate budgets to external identity tools like B2B IAM. Unfortunately, this is not the case, with only 28% of respondents citing external IAM as a security technology on which they are currently spending money. This must change to prevent future supply chain attacks.
Moreover, survey respondents view security as a key challenge when onboarding external identities, with 79% citing ensuring security consistency across workforce/non-workforce IDs as a top difficulty. B2B IAM can ensure this consistency by implementing a series of standardized security practices and policies.
Similarly, user delegation—a critical capability of B2B IAM—enables greater security by enabling timelier offboarding. When an organization needs to offboard a third-party identity, B2B IAM allows it to do so quickly without needing to wait for quarterly or semiannual access review, which can leave the organization exposed to threats for longer than necessary.
But B2B IAM isn’t just about security. User delegation can also lower costs by reducing the management overhead associated with external users compared to their existing IAM systems. The report gives the following example: “If a manufacturing firm grants access to a supplier or partner and that partner can administer its users, then the burden is lifted from the manufacturer’s own IT staff, helping to reduce overall operating costs in the process.”
B2B IAM can also help improve operational efficiency. All the top challenges to onboarding external identities cited by survey respondents – ensuring security consistency across workforce/non-workforce IDs (79%), developer enablement of standard AuthN/AuthZ (75%), regulations (64%), user friction (64%), alignment with journey orchestration (61%), and privacy (61%) can all be solved with B2B IAM.
Key Takeaways
Here’s what businesses need to remember: B2B IAM is a bridge that spans WIAM, CIAM, and IGA. It is increasingly essential for protecting third-party identities and preventing supply chain attacks and can facilitate cost-saving and efficiency benefits. Ultimately, purchasing a B2B IAM solution should be a no-brainer for any mid-to-large organization looking to secure and confidently scale operations.
