Why Do Password Management Systems Matter for Companies?

By: | November 3rd, 2021

Image by Pete Linforth from Pixabay

Password management is becoming an ever-more critical aspect of IT security. Organizations must manage passwords for users across multiple applications, provide two-factor authentication and manage access rights.

With the number of social media sites breached in recent years, along with email and financial institution accounts, passwords have become a critical attack vector for cybercriminals who aim to access high-value systems, personal information, or data.

The following are reasons why password management systems matter for companies:


Password management systems provide a secure method of storing user passwords, preventing unauthorized personnel within the organization. Implementing a company password management system can prevent a company from storing passwords in spreadsheets or other formats, which may be less secure. 

Password management systems also provide an authentication layer; an attempt to login against a password management system is required prior to authentication, providing additional security against unauthorized access.

Security is an essential aspect of password management systems as an organization can implement policies around login attempts, lockouts after a certain number of incorrect attempts and prevent brute force attacks through complex requirements for passwords. 

Users are typically forced to change their passwords regularly, reducing the risk of passwords being compromised in the event of a company system breach. Password management systems can also be configured to enforce compliance with policies around password strength, complexity, and frequency of change.

Reduce Costs

With password management systems, organizations can reduce help desk costs associated with resetting or creating new passwords for users when they forget their passwords or lose access to their accounts.

Implementing a password management system enables organizations to provide self-service password reset and delegated administration where designated employees can reset passwords for users.

Enable Compliance

Password management systems enable organizations to meet compliance requirements around access rights for users and allow self-service by users where they can reset their password as required.

Password management systems can also be configured to support applications such as access control for collaboration and portal solutions and single sign-on (SSO) capabilities. Users are not prompted to log in to each application individually but instead enter their credentials once.

Several regulatory requirements exist around the disclosure of breaches involving personal information, including notification to affected individuals, the provision of credit monitoring services for a while, and the identity of anyone that may have accessed information. 

As new regulations around data protection and breach notification continue to be introduced, organizations should ensure that they review their IT security policies and procedures in advance to determine how password management systems can assist with meeting these regulatory requirements.

Gain Better Visibility into Password Activity

Organizations should ensure that they have visibility of overall activities within their organization around passwords, including the creation, resetting, and changing passwords.

Password activity should be logged to be audited in the event of a security breach, compliance violation, or any cybercrime activity to determine who was involved with what activities around passwords.

Unauthorized access to systems is still something organizations need to address even with password management systems enabled, as users can leave their systems unlocked or share their passwords. 

Organizations need to ensure that they have additional layers of security in place, including physical security, encryption of data at rest and in transit as well as protecting systems with antivirus software.

Implementing a password management system in organizations enables users to reset their passwords when they forget them and helps employees in their day-to-day activities.

Password management systems allow the delegation of administration capabilities to designated employees across an organization to reset passwords when required.

Implementing a password management system can also help organizations achieve compliance requirements around user password management and access rights.


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