The Customer Identity Experience: Problem or Opportunity?

Customer Identity and Access Management (CIAM) is capturing a lot of attention from IT leaders — what was once a niche pursuit for apps and online-first vendors has now become mandatory for any organization that serves customers, students, or even distributed independent workers like dealers, brokers, or providers.

But, as with any new demand on IT budgets, there is resistance. IT and business leadership is asking: we were doing fine without it, so why should we prioritize these new capabilities?

To answer, let’s start in an unexpected place: Cars.

What the automotive industry’s missteps in infotainment can teach us about user experience

The user experience of modern automotive infotainment systems is a huge problem. In some ways, they’re better than ever — Huge high-res displays! Slick 3D graphics! And yet, most infotainment systems are unpleasant to use. Clunky touchscreens, unpredictable lag, too-deep menus, and more can make the experience of even a good car unpleasant.

How do brands like Ford, GM, and Honda pour millions into development and still end up with bad user experience? We weren’t there for the development process, but let’s propose a theory: They treated the infotainment experience as a problem, not an opportunity.

This is an issue of attitude that starts with leadership and permeates the entire business. What are your company’s priorities, and how do you lead your personnel to address them? Most car companies seem to have treated their software experience as a cost center to be dealt with rather than as an opportunity to enhance the driver’s experience, or as an upsell that shows well in ads and showrooms, but isn’t sufficiently evaluated for day-to-day usability.

Car companies face a few key challenges when trying to design an infotainment system — creating a safe yet satisfying experience, matching the long time-to-market and product lifecycle of cars with the rapid pace of technological change, and controlling costs across millions of units.

Treating these important constraints purely as problems is a mistake. How could they, instead, be thought of as opportunities?

• Safe experience: many consumers buy on safety — opportunity for infotainment to be a differentiator in how easily it allows the driver to control their car without taking their eyes off the road.
• Lifecycle: consumers are sensitive to the longevity of the things they buy — opportunity to expand the value proposition of a vehicle by making sure customers know it will always be kept up to date with the latest software.
• Cost control: as part of a long-term plan, standardizing on leading technologies and flexible integrations creates an opportunity to reduce costs without compromising on the latest technology.

Too many car companies have failed to approach the challenge of modern infotainment this way, instead creating distracting, quickly obsoleted experiences with painful associated costs for consumers. Nothing says “this was treated as a cost center” like hardware and software that’s 10 years old — and performs like it — on release day of a new product.

By comparison, a company like Apple treats user experience as a top priority. It’s an opportunity for them to differentiate themselves, to be better than the competition and win vast market share. Google does the same, with different focus but similar positive UX outcomes.

The result? Customers prefer to go through the high-friction process of configuring Android CarPlay or Android Auto rather than use the user experience that came with the car. This should serve as a clear hint to manufacturers — the best experience will win out, even if it’s not the one you intended your customers to prefer.

The automotive industry’s stumbles in this area offer lessons for CIAM:

• Creating new user capabilities in-house comes with serious risks to user experience. A business that’s been making cars for 100 years will not suddenly be excellent at making tablets.
• Excellence in a capability depends not just on investment, but also on focus and the priorities of the company. GM can’t be Apple. Just as in any industry, companies specializing in infotainment hardware and software design have sprung up to bring focused expertise to the table.
• Treating user experience in one area as a side issue or a cost center will always result in bad UX.

Let’s apply these lessons to customer identity.

Managing customer identities with a homegrown stack is a serious long-term investment

None of this is to imply that managing customer identities in-house is impossible; it can be done, and it can be done well. However, there are things to consider about such a program before committing to one:

• Growing your own software in-house means you now have a software function; worse, paying a third-party vendor can lock your company into a long-term relationship that adds not just cost, but the risk of losing access to the talent you need to maintain and update that software.
• It’s much harder to respond to emerging threats and use cases with a unique, independent software stack than it is to apply a software patch produced by a company whose entire business is designed around responsiveness to those changing needs

Three things are typically lost in a homegrown stack:

• Flexibility  —  with software built to fit a specific need, it can be much harder to adapt to changes in the identity ecosystem such as new products and platforms.
• Scalability  —  for businesses that experience seasonal or year-to-year variability in utilization, the ability to scale CIAM services to meet the need can keep services up at critical times, while saving hundreds of thousands or even millions of dollars.
• Features  —  while dedicated CIAM vendors compete on features, in-house solutions rarely have the luxury of assigning resources to spend time making administrators’ lives easier or adding lower-priority user-facing features.

With billions being poured into leading CIAM products over the next several years, these gaps in between dedicated products and in-house alternatives will only continue to grow.

Excellence requires investment, focus, and prioritization.

How to think about budget

Investing in customer identity management is not just a cost center; it’s an investment in your company’s future. Budget allocation should reflect the importance of customer identity in the digital landscape. This includes considering not only the initial setup costs, but also the ongoing expenses for maintenance, updates, and security enhancements.

ROI Consideration: Assess the potential return on investment. Effective customer identity management can lead to improved customer experiences, higher retention rates, and better data security, all of which contribute positively to the bottom line.

Long-Term Financial Planning: Budgeting for customer identity management should be a part of long-term financial planning. This includes anticipating future needs and scaling requirements.

Treat Customer Identity as a key focus of your business strategy

Customer identity is not merely a technical issue; it’s a crucial aspect of customer experience and business operations. Treating it as a key focus means integrating it into the core business strategy.

Cross-Functional Involvement: Involve various departments such as IT, marketing, and customer service in the development and maintenance of the customer identity strategy.

Customer Experience Enhancement: Recognize that a seamless and secure identity management process enhances the overall customer experience.

Leadership priorities and alignment with overall business strategy

Leadership plays a pivotal role in prioritizing customer identity management. It’s essential for leadership to align customer identity strategies with the overall business goals.

• Top-Down Support: Ensure top management understands and supports the importance of investing in customer identity management.
• Strategic Alignment: Customer identity management strategies should align with broader business objectives, such as enhancing customer engagement, ensuring data security, and driving innovation.

Customer Identity is an opportunity

Treat CIAM as a Business Driver

Customer identity management should be seen as a strategic business driver rather than a back-office function. By leveraging customer identity data, businesses can unlock new opportunities for growth and engagement.

• Data-Driven Insights: Utilize customer identity data to gain insights into customer behavior, preferences, and trends.
• Personalization and Marketing Strategies: Leverage identity data to personalize marketing efforts, enhancing customer engagement and loyalty.

• Enhanced Security as a Value Proposition: Use robust customer identity management as a selling point, showcasing your commitment to protecting customer data. Give your marketing team the ability to advertise how easy and safe you are to work with, and deliver on that promise. Show your customers that you really care about their privacy and respect how important it is to them.
• Operational Efficiency: Streamline processes and reduce costs by efficiently managing customer identities, leading to a more agile and responsive business. If customer data is hard to get, it loses value, and many teams simply won’t use it. If it’s easy to get, it unlocks not only known opportunities for things like marketing, but also surprising opportunities that arise when your staff has access to this valuable information.
• Cross-functional Value: Make your user experience work for the needs of your entire business - not just identity management and marketing, but also physical locations, franchisees, manufacturing, and planning. What can a surge in signups tell your manufacturing function about expected capacity? What can the geographic locations in which you see the most activity tell you about where to place new stores?

Make It a Value for the Business

Transform customer identity management from a necessary operational expenditure into a valuable asset for the business.

Conclusion

The lesson from automotive infotainment isn't just about avoiding mistakes – it's about seizing opportunities. When you treat customer identity as a strategic asset rather than a cost center, you unlock possibilities that extend far beyond simple access management. The question isn't whether to invest in CIAM, but rather: How much longer can you afford to treat it as just another IT problem?

The organizations that win in today's digital landscape aren't the ones checking boxes – they're the ones turning customer identity into a competitive advantage. They're creating experiences that customers prefer, generating insights that drive growth, and building trust that lasts.

Author:  Nick Slaubaugh, IDMWORKS, Dir of Technology Solutions