06 Jun Business Case for Customer Identity and Access Management (CIAM)
A decade ago Identity and Access Management projects tended to spiral out of control both on deployment time and budget. These projects where Enterprise IAM were being deployed, aimed to increase internal efficiency, employee satisfaction (by simply reducing the number of passwords people needed to memorise) or increase security. The ROI was hard to calculate or numbers showed that it would take a few decades to recoup the investment. Internal IAM projects earned a bad reputation.
Internal, or Enterprise IAM is a different beast compared to Customer IAM. In a standardised and usually fairly homogenous (internal) environment it is easy to fix technologies down and create processes that do not change much over time. Internal IAM is driven by the Human Resources system. In the customer facing world change is constant and rigid processes will only get you in trouble with unhappy customers. In the customer-centric world it will be harder to lock down too many things as customers expect or demand flexibility and easy flowing journeys.
Fortunately, compared to the Enterprise IAM, the business case for the Customer IAM is easier to calculate, and should help you secure funding for making the lives of your customers easier and more secure. Customer IAM can increase revenue and decrease cost in ways that are easy to determine. Enterprise IAM has never been about increasing revenue.
What CIAM can do for you and what is measurable
- Direct Benefit: 20-30% more efficient marketing & sales
- Direct Benefit: Reduction of the abandonment rate (that can be as high as 70%)
- Indirect and direct benefit: Cost savings and e.g. GDPR compliance through self-services
- Direct benefit: Cost savings through simplified and unified infrastructure
New or Improved Revenue
Customer IAM is a tool for enablement and empowerment. The first thing any business needs, is to know their customers, in any digital process. The second is to create new digital processes that will improve customer experience and satisfaction thus improving the revenue, or creating completely new revenue streams through new digital services. Some of the targets can be harder to measure and contribute to Customer IAM alone (indirect), but there are places where the benefit of CIAM is undeniable (and measurable).
20-30% More Efficient Marketing and Sales
Customer IAM is not integrated to a HR system. Why would it? It’s about customers, not employees. It does not need to be integrated to the Active Directory. But integration to the CRM brings immediate benefits. Especially in B2B environments.
While CRM acts as the master database for contract information, the CIAM system becomes the master of (customer) identity information. On a yearly basis 20-30% of customer data in a CRM system becomes outdated due to the simple reason that sales managers or customer service desk persons do not have visibility to the customer organisation. People leave, change business units, new employees come, responsibilities change. When you deploy a CIAM solution, you can empower your own customers to maintain their own identity and authorisation information. This will reduce the amount of outdated customer information. With updated customer information your sales managers won’t have to track down contact persons who are properly authorised by their own supervisors to acquire your products / services. It will also help marketing as they can launch campaigns with pinpoint accuracy to the existing customer base.
Other benefits of the CRM integration are related to registration. With a proper CRM and CIAM integration, your sales manager can simply push a button on the CRM user interface called “Invite”. An invite is sent to the contact person of the new customer to register to the online service, and the registration form can be prefilled with relevant information. This new authorised contact person can then invite other people within his own organisation to become users. After these new users have registered, they can be assigned with proper roles (authorisations) by the contact person.
For your consumer users, the biggest conversion inhibitor will be a convoluted registration step. CIAM that allows your visitors to use something that they already have for registration can smooth out the wrinkles and increase your conversion rates. Social media identities will be a good starting point, but if you handle any confidential information you will need other sources of identity verification. A good CIAM solution can support both low level of assurance (“Donald Duck”) identities as well as properly vetted (bank, mobile network operator, government, healthcare, etc) identity information that can be used to further verify the identity of the visitor become customer.
Depending on the nature of your service, abandonment rate can be as high as 70%. A smooth conversion process that is both convenient and trustworthy (and consented) will reduce that percentage. Unfortunately, there are no fixed figures we can state for the reduction. It really depends on your services, but if you know that too many of your customers are leaving before completing the registration process and becoming paying customers, you can certainly benefit from CIAM.
There are measurable business benefits with CRM and CIAM integration and “Bring Your Own Identity”, and allowing your customers, both consumer and business, to manage their own identities and authorisation is also a big step towards GDPR compliance.
Digitalise an existing process or create a new one
One of the easiest ways to reduce cost in any organisation is to digitalise existing labour intensive processes and allow your customers conduct business with your organisation through self-services. The role of the Customer IAM is to enable this process (indirect benefit) in the first place as you usually need to know who you’re dealing with and if confidential information is involved, make really really sure who you’re dealing with. That requires authentication.
If you empower your existing customers accomplish tasks online instead of calling to the customer service desk, each online transaction will reduce your cost. An average customer service desk call costs €15. Depending on the nature of your business, each customer can make calls to the service desk once a year or quite frequently. Just with the knowledge of the cost of a call to your service desk, you should be able to estimate how much you could save annually if your customers would adopt online self-services. Even in medium sized online services only a small drop in the percentage of calls can create a ROI of over 100% for the first year for the CIAM investment.
The same simple logic applies to transactions involving traditional mail, or … gulp… faxes. Yeah, I know, in some parts of the world there are still functioning fax machines. I had to find out the hard way last year.
Can you measure contentment? If you empower your customers and reduce the need to call your service desk or deal with physical documents, you’ll be improving customer satisfaction. Satisfied customers tend to recommend a service they’re happy with to others.
Unify your customer identity data
Many, if not all, of our customers start with a single service and single user repository. Eventually our Identity Platform will be integrated to other user repositories, or the identity data will be migrated to the new one. This will create cost savings in two ways; you can reduce the license fees you pay for multiple repositories and the overhead in the administration side is reduced by simplifying your own processes and maintenance tasks.
Contact Ubisecure now and we will help you calculate the business case for CIAM. These examples are just icing on the cake. We have plenty more…