Top 5 IAM Challenges for Growing Organizations

Chad Gerstensang
May 19, 2025

Introduction

Identity and access management (IAM) solutions are a staple of corporate cybersecurity. Adoption is at 95%, with the IAM market expected to reach $45 billion by 2032. The reasons for IAM’s success are easy to understand. The technology provides a foundational control over access, authentication, and authorization. IAM presents its share of challenges, however. This article looks at the top 5 IAM challenges that growing organizations face. They include enforcing identity governance while scaling the organization, dealing with role changes and de-provisioning, password issues, compliance, and third-party integrations.

A Brief Overview of IAM

IAM is a security discipline comprising a set of frameworks, standards, and technologies. Its goal is to ensure that users can access digital resources they have permission to use. In practice, realizing IAM involves an IAM solution such as OKTA. These solutions manage user identities and handle authentication and authorization tasks, often acting in concert with related, specialized tools for functions like multi-factor authentication.
For example, if you’re entitled to use your company’s email system, the IAM solution will be able to authenticate you, e.g., confirm that you are who you say you are and that you are authorized to access the email system. If the IAM solution cannot authenticate you and confirm your authorization, you will not be granted access.

The Top 5 IAM Challenges

IAM can be challenging to implement and maintain. The breadth of its purview is part of the problem. Identity-related controls are at once critically important for security and highly complex to manage. Overseeing even the simplest IAM deployment is a big job. Here are the top five challenges you run into with IAM.

#1 – Enforcing identity governance while scaling the organization

Identity governance gets progressively more difficult as an organization scales up and grows horizontally. For example, if access privileges go according to location, then a company that adds branch offices will have to adapt its IAM and IGA solutions to enforce location-based access. At the same time, cloud computing and software-as-a-service (SaaS) applications can complicate IAM because SaaS apps don’t always federate with access controls from centralized IAM solutions. And, in certain cases, it’s not a human user who needs to be authenticated, but rather a device or a piece of software. IAM has to adapt and keep up.

#2 – Keeping up with role changes and de-provisioning

Users often change roles, a reality that can make it hard for IAM to keep up with their access privileges. Ideally, as soon as a user leaves one role and takes another, an admin will instantly de-provision access rights from the old role and add those allowed in the new role. For example, if you join the sales team, you get access to the sales operations system, but you should lose access to whatever system you used in your old department. In reality, this process can lag, and users may retain access rights they no longer merit. In the worst-case scenario, users retain access rights even after they leave their jobs. This can be a risk with cloud and SaaS solutions that manage identity outside of the main IAM solution.

#3 – Weak passwords and password sharing

Weak passwords, such as those that are short and use common words, along with shared passwords, are a source of risk. A manager’s admin password, for example, may be common knowledge among department employees. This can lead to abuses of administrative access and, in a few notorious cases, massive frauds and internal data breaches. IAM solutions are not generally set up to prevent or detect this kind of behavior. Security managers should configure IAM solutions to require strong passwords, e.g., with numbers and special characters.

#4 – Managing third-party integrations

IAM solutions seldom operate on their own. They invariably connect to many other systems, such as security operations tools, MFA solutions, SSO solutions, and more. Plus, they may need to integrate with enterprise applications and systems for device management. Implementing and managing third-party integrations can be stressful responsibilities, especially if an outage will make it impossible for employees to get their work done.

#5 – Managing compliance

Regulatory compliance frequently requires strong identity management controls, along with audits to verify that such controls are in place. IAM admins may be on the hook for reporting and audits that attest to the existence and efficacy of identity-based controls. This can be challenging, especially considering the problems of role changes, bring your own device (BYOD) policies, and the like.

Conclusion

IAM is an essential technology for security and compliance. It’s essential to keep track of users and what they can access. It’s a demanding field, however, one that presents several challenges to IT managers and security teams. IAM must constantly adapt to changes in organizational shape and size, as well as shifting user roles. Deficient password settings can lead to disaster, while third-party integrations consume time and resources. This situation favors solutions that can ease these burdens, such as by automating IAM processes and leveraging artificial intelligence (AI) to expedite complex workloads.

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FAQs

How does IAM differ from Identity Governance and Administration (IGA)?

While IAM is often used as a broad term, it is helpful to distinguish between the operational and governance layers. IAM focuses on the day-to-day mechanics of access—authentication (verifying identity) and authorization (granting permissions). IGA provides the oversight layer, managing the lifecycle of identities, conducting access reviews, and ensuring compliance with policies like Segregation of Duties. Integrating both ensures that as an organization scales, access is not just granted, but also audited.

Why is manual de-provisioning considered such a high security risk?

Manual processes are prone to human error and administrative lag. When an employee leaves or changes roles, orphaned accounts, active accounts with no owner - often remain. Attackers target these dormant accounts because they are rarely monitored. Automated de-provisioning ensures that access is revoked across all SaaS and on-premise systems the moment a status change is recorded in the HR system, eliminating this attack surface.

How can AI help solve the problem of role creep as a company grows?

Role creep occurs when employees accumulate access privileges over time without losing old ones. Modern IAM solutions leverage artificial intelligence and machine learning to perform peer group analysis. The AI compares a user's access to that of their peers in the same department; if it detects an outlier, such as a sales representative with access to engineering source code, it can automatically flag this for review or revoke the unnecessary access to maintain a least privilege posture.

What is the impact of shadow IT on identity governance?

Shadow IT refers to software-as-a-service (SaaS) applications used by employees without the knowledge or approval of the IT department. Because these apps do not always federate with the central IAM solution, they create identity silos. This means that even if IT disables a user's primary corporate account, they may still have access to sensitive data stored within unmanaged applications. Centralizing visibility is the only way to ensure 100% de-provisioning success.

Can IAM solutions effectively prevent password sharing?

Traditional IAM solutions cannot physically stop a user from telling a colleague their password, but they mitigate the risk through multi-factor authentication (MFA) and adaptive authentication. Even if a password is shared or stolen, the system will trigger a secondary verification, such as a biometric check or hardware token, if it detects a login from a new device or an unusual location. Moving toward passwordless authentication is the ultimate solution to eliminate password sharing risks entirely.