Written by Bob Bentley, Director, IAM Product Marketing, WSO2
Customer experience is the primary battleground for today’s digital enterprises. Consumer expectations have risen to match the offerings of giants, such as Amazon and Uber, meaning every consumer-facing business needs to step up its efforts accordingly. Central to the proposition of exceptional customer experience are knowledge, trust, and integrity. Customers expect businesses to know them intimately very early in the engagement; they want companies to anticipate their needs ahead of time. Crucially, they expect that their personal data will be handled with the greatest respect and that they will have full control over it over the course of the relationship. Achieving this against a backdrop of constant cyberthreats and escalating data protection regulations is a significant challenge that enterprises must solve if they are to stay competitive.
The result of this conundrum is that interest in customer identity and access management (CIAM) solutions has never been higher. The market is predicted to grow rapidly between now and 2026, more than doubling from $8.6bn in 2021 to $17.6bn. Despite this, however, analysts have pointed to budgetary constraints as a blocker for organisations adopting advanced CIAM solutions. Clearly, enterprises need to better understand the return on investment (ROI) that CIAM solutions can deliver across a diverse range of pain points in the business.
The big numbers and bigger wins
In order to give businesses a more complete understanding of where a CIAM investment will deliver benefits, we commissioned Forrester Consulting to quantify the scale and split of benefits a business should expect to see in terms of direct economic impact. At a high level, the study, The Total Economic Impact™ of WSO2 Identity Server revealed that a composite organisation, which, for the purposes of the study, is a $3bn turnover business with 20,000 employees and a user base growing from $800k in year one to two million by year three, saw a $4.51m benefit over three years from deploying an advanced CIAM platform at the beginning, along with a 332% return on the investment needed to deploy and run the solution over that period.
That is a significant number, so it is worth looking at how it breaks down and where the specific benefits accrue.
Lifting administrative burden and accelerating time to market for new solutions
Managing and supporting large volumes of customer identities is a major administrative burden, especially when the business starts to scale. A CIAM platform that enables consumer self-service can dramatically reduce the customer support burden on a company’s staff. Having a central platform for identity management that sits across the entire systems development life cycle (SDLC) also accelerates software development – the research found that it reduced software development time by an average of 20% for applications requiring log-in functionality. This reduces time to market for new features and applications. It also ensures that identity and access management is standardised across the organisation, rather than varying at the application level. This delivers a consistent customer experience and removes the risk of individual developers taking key CIAM knowledge with them when they leave the organisation. The effect of these two benefits in combination is so pronounced that it accounts for 67% of the savings made.
A further 13% of the benefit accrues from a reduction in integration complexity. A platform that provides developers with the tools to create pre-built integrations reduces the amount of time and effort required (by 60% according to the study findings) and allows them to focus on higher value tasks. That’s an especially valuable saving in a landscape where identity specialist developers are in limited supply and releases cycles get ever-shorter in pursuit of competitive advantage.
Using an advanced CIAM platform accelerated time to market for new applications by around 12 weeks, contributing 5% of the NPV.
Finally, in monetary terms, the study found that increased uptime was a key benefit. The solution lifted uptime beyond 99.9% as a result of moving identity functionality away from applications and centralising it on the identity server. The resulting reduction in lost revenue and the improved customer experience accounted for 15% of the net present value of the deployment.
To summarise, the study concluded that the composite organisation achieved full payback on its investment within a year.
Enhanced security posture, scalability, and better customer experience
Outside the direct economic impacts, a CIAM platform delivers a host of other benefits that while they may be unquantifiable – are also critical if businesses are the win the customer experience battle.
First is the improvement in security posture gained by using a single, central approach to CIAM. It enables the uniform application of security and data protection policies, so there are no inconsistencies in outlying applications that could result in a data breach. It is also easier for security teams to keep pace with emerging threats, understand how they could affect the IAM system, and apply fixes and protection. This is particularly valuable for stretched security teams in an environment where security skills are in short supply.
Scalability is another core benefit. A central approach to managing identity and access makes it easy to scale up adding new users, regions and integrations as the business grows and diversifies into new markets. And every new customer gets a frictionless experience from the start, creating that all-important first impression that is the foundation of customer loyalty and, ultimately, lifetime value.
Finally, deploying an advanced, technology-agnostic CIAM platform like WSO2 helps future-proof the business as it can integrate with new third-party apps and technologies with ease, helping to keep the organisation ahead of the competitive curve and ensuring that ROI continues to accrue after the initial payback period.
