Companies deploy identity and access management systems for a variety of reasons, and each of these can be tied directly to a real financial benefit. Whether it’s increasing security (and thereby avoiding costly security breaches or data loss), automating application provisioning (thereby saving IT staff’s time) or providing SSO across all devices (reducing employees’ wasted time managing forgotten passwords), IAM contributes to the bottom line in meaningful ways. For example, during Enterasys Networks’ three year-deployment of Okta, the network infrastructure and security provider was able to achieve a 652% 3-year risk-adjusted ROI with a payback of two months. (Read the full October 2012 commissioned case study conducted by Forrester Consulting on behalf of Okta here.)

Given such strong results, we thought it might be worth digging deeper to compare the financial benefits of different types of IAM. Luckily, Forrester Research, Inc., recently did exactly that in a detailed report (“Use Commercial IAM Solutions to Achieve More than 100% ROI Over Manual Processes, Forrester Research, Inc.”) comparing four different scenarios for identity and access management. The full Forrester Research report is available to Okta partners and customers (current and future), and I’ve included a synopsis below of the four methods of identity and access management Forrester cites — and why cloud IAM is the clear winner:

  1. Manual identity management processes
  2. Build-your-own on-premises solution
  3. Buy commercial on-premises IAM solution
  4. Deploy an IAM solution that is delivered from the cloud

Using a comprehensive analysis, Forrester found that of these four scenarios, a cloud-based IAM service “offers the greatest benefits for SMBs.” That may seem obvious, but given all of the claims made by various vendors, it’s helpful to have a clear analysis to guide the discussion. From the report:

Key Takeaways

Using Manual IAM Processes Will “Burn Lots of Money”
Forrester found, without looking at net present values and just looking at IAM costs for three years, that a sample company will “spend nearly twice as much on manual processes for security and attestation as on automated ones. As the end user population increases, manual processes simply become less efficient and less tenable.”

Using Cloud IAM Offers Rightsizing and Low Maintenance and Development Labor Costs
Unless you have significantly more than 10,000 users, and assuming that the cloud IAM solution meets all your requirements, cloud IAM might be the best option, providing 310% ROI over manual processes. Don’t try to build your own IAM solutions — they are 29% more expensive than COTS IAM and 85% more expensive than cloud IAM.

Forrester provides helpful advice to build a business case for IAM, based on three key points:

  • How much your company currently spends on manual processes
  • How you stack up compared with other companies
  • How decentralized security functions undermines security

To download the full report, please visit Okta.