The Complexities of Managing External Identities in Organizations

FROM TECH TALK TO BUSINESS IMPACT

The Complexities of Managing External Identities in Organizations

 

Introduction

Managing external identities within an organization’s Identity Governance & Administration (IGA) framework is inherently complex due to the diverse roles, varied access needs, and lack of centralized authoritative sources for these users. Unlike full-time employees or students, external users such as volunteers, vendors, contractors, visiting scholars, and board members sometimes exist outside the traditional HR or Student Information Systems (SIS) that drive identity lifecycle management.

Additionally, these external identities often hold multiple roles within large organizations, or have held a role in the past, further complicating identity management. A contractor may later become a vendor, a visiting scholar may later become an employee, or a volunteer may also be a staff member. Without strong identity matching processes, these scenarios can result in duplicate identities, orphaned accounts, and mismanaged access rights, increasing security risks and compliance challenges.

Without a structured approach, external identity management can lead to security vulnerabilities, compliance challenges, excessive access risks, and inefficiencies in provisioning and deprovisioning access. Below, we explore the complications and best practices for managing external identities effectively.

 

Why External Identities Are Challenging

1. No Single Source of Authority

Unlike employees who are typically managed through an HR system, external users often come from multiple, disconnected sources—procurement, research departments, security offices, or manual processes.

→ Example: A contractor may be onboarded via Procurement, a volunteer through a program coordinator, and a visiting professor through Academic Affairs—none of which may be integrated into an IAM system.

Moreover, many organizations lack a formalized source system for tracking external identities, meaning the Identity Management system itself must fully manage this population—from provisioning to deprovisioning, just like any other defined role.

 

2. Undefined Identity Lifecycle, Role Transitions & Ownership

External users may not have a clear start and end date for their engagement, leading to:

• Access lingering beyond necessity (security risk).
• No clear ownership over managing updates or deprovisioning.
• Multiple roles over time, increasing identity reconciliation challenges.

→ Example: A visiting professor may later become an unpaid UVA faculty member, requiring seamless role transitions without creating duplicate identities.

Each of these populations could require different policies, including:

• Separate password policies for vendors versus unpaid faculty.
• Distinct provisioning workflows based on role type.
• Unique grace periods for access revocation (e.g., vendors may lose access immediately upon contract end, while visiting faculty may have a 90-day grace period).

 

3. Role Ambiguity and Dynamic Access Needs

Unlike internal employees who follow structured role-based access models, external identities often:

• Have short-term, project-based, or conditional access.
• Need cross-functional access (e.g., a vendor accessing both HR and IT systems).
• Require badge-only access to physical spaces but not digital environments.

→ Example: A contractor working on-site may require a badge for facility access, but only temporary VPN credentials for specific IT systems.

This dynamic nature demands a strong IAM system capable of managing multiple roles for a single identity without creating duplicate accounts or conflicting access assignments.

 

4. Compliance and Security Risks

Organizations must ensure external identity access aligns with compliance mandates such as HIPAA, FERPA, PCI-DSS, and NIST 800-53 while also preventing unauthorized access.

→ Example: Academic visiting residents handling patient data must comply with HIPAA, while external search committee members reviewing confidential hiring decisions must follow GDPR or privacy aligned data access policies.

Without a well-defined IAM process, external identities can:

• Retain excessive access rights beyond their contract terms.
• Bypass access reviews due to inconsistent tracking.
• Introduce compliance violations and audit failures.

A robust IGA solution ensures automated provisioning, role-based access controls, and strict deprovisioning policies for all external users.

 

5. Manual Processes Leading to Errors & Inconsistencies

Without automated onboarding and deprovisioning, organizations rely on:

• Manual onboarding processes in which data is aggregated through emails, Excel files, etc. introducing delays, errors, and security risks.
• Email or paper-based approvals that delay access.
• Inconsistent verification procedures (some may require ID proofing, others may not).
• Lack of periodic access reviews, increasing security risks.

→ Example: A vendor’s contract ends, but their access remains active indefinitely, leaving security gaps.

A strong IAM solution like Fischer Identity eliminates manual errors and ensures real-time visibility into external user access.

 

Best Practices for Managing External Identities 

1. Establish a Centralized External Identity Source

• • Implement a designated system (within IAM) to serve as a Source of Authority for external users.

• • Require sponsorship from an internal stakeholder for each external identity.

• • Automate identity record creation with expiration dates based on contractual or role terms.

• • Automate identity renewal processes
     

2. Implement Strong Identity Matching & Role Management

• • Ensure advanced identity reconciliation to prevent duplicates when users transition between roles.

• • Enable multi-role assignments while maintaining a single identity record.

• • Enforce dynamic access policies based on user attributes rather than fixed role mappings.
     

3. Automate Onboarding & Deprovisioning Workflows

• • Use IAM automation to provision access upon approval and revoke access when no longer needed.

• • Require recurrent access recertifications for external identities.

• • Ensure robust notification processes to both the account holder and internal stakeholder
     

4. Strengthen Identity Verification & Authentication Controls

• • Require identity proofing for high-risk external users.

• • Enforce Multi-Factor Authentication (MFA) for all non-employee accounts.

• • Implement passwordless authentication (FIDO2/WebAuthn) for privileged external roles.
     

5. Establish Clear Governance & Accountability

• • Assign business owners responsible for external identity lifecycles.

• • Implement regular access audits to prevent account sprawl.

• • Require periodic access reviews by the sponsor before renewal. 

 

Fischer Identity: The Ultimate Solution for External Identity Governance 

Managing external identities is complex, but Fischer Identity provides a seamless, automated solution to:

✔ Create a single source of truth for external identities.

✔ Enforce strong identity matching to prevent duplicates.

✔ Enable flexible multi-role identity management.

✔ Automate access provisioning and deprovisioning based on policies.

✔ Customize password policies, grace periods, and security controls for each external identity type.

Whether your organization lacks a formal external identity source or requires full IAM lifecycle management for non-traditional users, Fischer Identity delivers a comprehensive and scalable approach.

Ensure security, compliance, and efficiency with Fischer Identity’s external identity governance today!