Investment in Customer Identity and Access Management (CIAM), as with any IT project, requires a degree of research into what the best solution is for your individual business. And when you’ve found it, you’re faced with the task of demonstrating the specific return on investment of CIAM to the budget holder in order to get approval for the project. You both want the same overall result – a successful, growing business – but a CFO is purely focused on the financials, whether that’s in the form of cost savings or increased revenue.

Particularly in 2020 when the purse strings may be tighter for many organisations, reliably predicting the return on investment for any new project is essential. The good news is that CIAM is high priority for budget allocation right now, given that becoming digital-first is essential to adapting to the ‘new norm’.

So what does the CFO need to see to be convinced that you need your CIAM investment? This article provides an introduction to the ROI of CIAM. More detail and financial statistics are available in our free white paper, written directly for the budget holders (download here – Customer Identity and Access Management: Investment and ROI).


Cost savings enabled by CIAM

Let’s start with a financial incentive that will immediately get your CFO’s attention – operational efficiency. CIAM is a fantastic way to remove clunky business processes by digitising workflows, thus reducing wasted employee time (and therefore money) carrying out manual tasks.

For example, Delegated Authority – a CIAM capability that enables users to delegate the right to use digital services on their behalf. This reduces the need for internal admin-heavy workflows by enabling your external users to delegate authority themselves, within your defined parameters.

Another avoidable cost on the CFO’s radar is the possibility of data breach and regulatory non-compliance fines, with the average cost of a data breach to an organisation now totalling $3.92 million. So the fact that CIAM helps to significantly mitigate against this risk will be a motivation for investment.

For example, multi-factor authentication (MFA) – i.e. requiring more than one identifying form factor to log into a service. This is very important as 80% of data breaches are caused by stolen, weak or default passwords. While the use of passwords is still commonplace, a second factor (such as biometrics, mobile phone authenticator apps, time-based one time passwords, bank IDs etc.) significantly reduces successful breaches as hackers are far less likely to be able to reproduce both identifying factors and gain unauthorised access.

(See more ways that CIAM enables cost savings in our free white paper – Customer Identity and Access Management: Investment and ROI)


Revenue enabled by CIAM

CIAM connects users to a business at a critical point in their customer journey – signing up and logging into a service. A key principle of your new CIAM solution will likely be to streamline these processes and make them more customer-centric, which has the potential to drastically increase registrations and loyalty – and therefore revenue.

For example, CIAM offers support for third party identity providers, like Google, Facebook, bank IDs and other federated digital identities. This ability for customers to use their existing digital identity to sign into your service makes it very easy for new customers to simply click to register, reducing form filling fatigue and abandonment. It’s estimated that 45% of users give up if the registration process is too hard, so streamlining the registration process will significantly increase your customer conversion rate.

CIAM also leads to more efficient Sales and Marketing processes by linking your service’s identity data with your CRM. This increases the accuracy of data across your systems, so better data-led sales and marketing decisions can be made based and greater personalisation of services is enabled.

For these revenue-enabling reasons, CIAM should not just be an IT priority and expense, but should form part of the wider business strategy and share the budget with Sales and Marketing.

(See more ways that CIAM enables increased revenue in our free white paper – Customer Identity and Access Management: Investment and ROI)


Financial impact of selected CIAM capabilities

Here are a few examples of cost-saving and revenue-generating implications of common Customer IAM capabilities.


CIAM capability Cost saving Revenue enabling
Self-service account management Drastically reduce Support Desk calls by empowering customers to make account changes (like password resets) themselves.

According to Forrester, large organisations spend up to $1 million each year in staffing and infrastructure expenses just to handle password resets.

User data is kept current by the user themselves, making it far more accurate than Sales/Marketing-led CRMs. Avoid identity silos and leverage the ongoing accuracy of CIAM data for progressive profiling.
Single sign-on (SSO) Also reduces Support burden by requiring only one set of credentials per user across multiple services – leading to far fewer issues needing to be dealt with. Ease of customer journey through services results in greater engagement with your services and loyalty to your brand.
Multi-factor authentication (MFA) Effective measure against costly data breaches and regulatory non-compliance fines. Correct balance of user experience and security with MFA builds consumer trust.
Identity providers (IdP) No need to store and protect credentials yourself for users that opt to ‘Sign up with X’ – reduces the burden and risk of data breach with you trying to mitigate these risks in house.


Makes it very easy for new customers to simply click to register – reducing form filling fatigue and abandonment, resulting in higher customer conversion.


Delegated Authority Reduces the need for internal admin-heavy workflows by enabling your external users to delegate authority themselves. Yet another customer experience win!


Secure that CIAM funding!

CIAM for CFO page 1I hope that this brief overview has given you a few useful pointers when demonstrating the ROI of CIAM.

I recommend downloading this free ultimate guide to the value of CIAM projects: Customer Identity and Access Management: Investment and ROI. It includes information on lots more ways that CIAM saves costs and enables revenue, and includes sections on whether to build or buy your CIAM solution and deployment options (IDaaS, cloud or on-premises).

Get in touch if you have any questions, or for help with your own CIAM project financials.