Can Identity Management really be outsourced?

I wrote about this a year ago (almost to the day). At the time, I said outsourcing Identity Management (IDM) and its related activities was "a hard sell". Although I was pretty negative on the idea, I didn't say it would never work or that it wasn't a good idea. I just felt like the market wasn't ready for it yet. That said, I still don't think the market is ready for it in an absolute sense, but we're making some baby steps forward.

To summarise that post for those that don't want to read the whole thing:

• Outsourcing IDM is like giving away the front door key to your house and letting someone else decide who to let in and what they can do. Something I didn't say at the time was that this implies you are relying on them to tell you what happened while you were out and they can also give out your back door keys without you knowing.
• IDM is not about technology. It's about people and business processes. Outsourcing works best when trying to solve technology pains. Not only that, IDM lies at the core of your organisation. Because of this, your organisation NEEDS to own it.
• The day when you can comfortably outsource ALL of your IDM-related functions is the day where you are able to hire a bunch of business analysts to model and maintain your internal identity , access, security, audit and compliance related processes in an industry ratified and standardised fashion that can be sent straight to the IDM service while being automated and enforced with immediate effect. And this is ONLY after you can be assured that the sensitive data you are letting out of your environment is adequately protected.

Matt Pollicove, Matt Flynn, Ash Motiwala and Mark MacAuley have been talking about this lately (timeline of posts - Matt P, Matt F, Ash, Matt P, Mark). Ash even quotes my post from last year, specifically where I used a "bake a cake and eat your dog food" analogy (it'll make sense when you read it...I hope).

I'm also reminded about earlier this year when Mark MacAuley, Ian Glazer and Matt Flynn talked about compliance as a service and Dave Rowe added his thoughts on the issue (timeline of posts - Mark, Matt F, Ian G, Ian G, Dave).

I tried to summarise everyone's thoughts but it just got very confusing, so you'll have to read them at your own leisure. Everyone was talking about very similar things but with slight variances on their interpretations of terms and concepts. I think people (myself included) would agree with each other about certain aspects if they could just set a baseline and have a glossary of terms and definitions...and write their posts based on this glossary. That takes time though...and we are writing blogs after all, not whitepapers :-)

There are a bunch of different things in play when we talk about IDM as a discipline and Outsourcing/Managed Services. I won't over-complicate things but at the risk of over-simplifying, I will point out the following:

• There is the business, people, process and compliance side of things in IDM.
• There is also the IT/technology side of things in IDM.
• Managed Services can be on-site or off-site.
• Software as a Service (SaaS) is becoming a real option.
  

I don't think there's going to be much argument when I say that the technology to outsource IDM is there today, whether you want to have an on/off-site model or SaaS (although the SaaS model is not as mature).

If an organisation decides today that they want to do it, there are service providers that have the experience and will give you all the assurances in the world that your data will be protected, all security measures have been taken care of and that they can meet the Service Level Agreements (SLAs) you set for them. Large organisations like IBM, EDS (acquired by HP), Wipro and Infosys (there are others, but I won't bother listing them all) can do it. Smaller ones like Ash's company Identropy can do it. If it's SaaS that you want, the choices are more limited, but Fischer and Symplified come to mind.

The key here is IF an organisation wants to do it. Ash said it himself:

"In my opinion, the reason is more emotional that rational. The market just isn't ready, emotionally, to completely outsource the management of their IdM systems. The whole thing seems so tied to their environment, to their business processes, that handing the management over to a third party just feels wrong."

The first hurdle is always emotional. Once you get beyond that, ask if it's the right thing to do. I still don't think an organisation should outsource it all. An organisation should ALWAYS own the business aspects of their IDM initiatives. Now let's take a look at the technology side of things.

Matt Flynn points out that:

"most companies are already outsourcing IdM – they just do it on a project basis"

He is of course absolutely correct. So from an emotional standpoint, you already have people looking at sensitive data that are not part of the organisation. What's the difference if you formally outsource it to a managed service provider? The difference is mostly psychological. People just don't look at bringing external people or companies in as "outsourcing" so they don't realise that external people already have visible access to their sensitive data (of course, this brings up the issue of data leakage, but let's not complicate the issue any further for now). I should also note that just because it's done today does not make it right. My main objection was to "giving away the keys". If you don't own the solution within the organisation, then that's exactly what you've done.

"Giving the keys away" aside, if the decision's been made to outsource IDM somewhat, the next question is going to be the location. Do you feel comfortable not owning the infrastructure and more importantly, are you comfortable knowing that all your sensitive information is sitting in an environment owned and controlled by another company? Many organisations would not be. That's why it's a hard sell.

Don't think it's a problem having your organisation's data outside of your infrastructure and not on your premises? Then perhaps you can also take the SaaS approach and outsource all of the other painful IT management aspects around trying to manage software deployments and infrastructure. If you're willing to accept the risks associated and "give away the keys", then why not get the SaaS benefits as part of the deal? There are pros and cons in going with SaaS over an off-site Managed Service, but I won't go into them as that's besides the point.

Ash may be onto something when he says:

"I think that the only solution is a pragmatic one, where there is shared management. The customer can still feel "in control", but hand over day to day ops to a third party."

If you read my blog regularly, you'll hopefully get that I'm all for the pragmatic approach to anything. I would modify that statement somewhat. They not only need to feel in control. They really need to be in control and the onus is on the service provider as the subject matter expert to make sure that happens.

He follows up by adding:

"(Customers) get to gradually let go, and initially lean on the service provider as a very knowledgeable augmentation to their staff. Once the comfort level sets in, customers can lean a bit harder, grant "persistent approvals" for break/fix scenarios, and reduce management staff for identity."

The decision to outsource your IDM (whether it's on-site, off-site, SaaS) should not be a big bang approach. It needs to be gradual, and what Ash suggests makes sense if the decision is made.

Ultimately, it boils down to the following:

• You must still own it. Never take your hands completely off because then you won't know what's going on if it all falls into a heap or when the auditors come knocking. Matt P's statement sums this up nicely:

  "If I were the person in charge of Compliance and Risk management, I'd want to be able to look at the auditors, police/FBI, Upper Management and lawyers after an incident and be able to say exactly what I did to protect my data and not say, "well the hosting company told me they were secure...""

  
  
• There's a difference between outsourcing the business aspects and the technological aspects. Keep the business aspects (people, process, compliance) internal. If you must outsource, only outsource the technical bits you don't want to have to deal with on a day-to-day basis that will not make any difference to the business no matter how it's done.
• The on-site/off-site debate is all about comfort level. How much do you trust your outsourcer with your data? What happens if something happens to the data? Who is accountable? Is this written anywhere in the contract? If you can't answer this question, don't do it.
  
• It's all about the risk you are willing to accept for the amount you have to spend. Perhaps an anonymous commenter to my original post said it best:

  "The level of security one intends to achieve would depend on the amount of money one is willing to spend. Some would rest on this judgment alone to give an IdM provider the keys to their gates. I am sitting in chair just like that right now. Security is business driven."

If you read my original post carefully, you'll realise I haven't really changed my stance too much. If anything, I'm perhaps a little less harsh today about why it's a "difficult sell" and have tried to address it from different points of view. I still don't think organisations in general are ready to outsource IDM completely, and they shouldn't. At least not until standards, processes and solutions mature to the point where most of the moving parts are commoditised and better understood. However, I do think the market is better placed to at least start to take a look at outsourced IDM and make informed decisions. The most dangerous thing to do with outsourcing IDM is to jump in the deep end. Take little baby steps, people.