Directory Sync Explained: Key Benefits and Implementation for B2B SaaS

Directory Sync Explained: Key Benefits and Implementation for B2B SaaS

Managing user access across different systems can quickly become a nightmare for IT admins who manage users and their access across hundreds of SaaS application systems. Every time there’s a change in a user’s role, or when the user joins/leaves the organization, the admin needs to update their access manually. 

This is an error-prone and time-consuming process that leads to security gaps. For instance, not providing the correct access to employees to perform their jobs effectively can lead to loss of employee productivity and dissatisfaction, or not revoking access for employees who’ve left the organization leads to security and compliance issues because of insecure access to unauthorized ex-employees. This eventually leads to a frustrating user experience for the admins and the end users who rely on the system to perform seamlessly. 

That’s why most enterprise organizations and their IT admins want to automate the employee life cycle management of onboarding, access management, and offboarding across all the hundreds of SaaS applications in use. 

Directory Sync is one of the solutions at the disposal of a SaaS application to automate employee provisioning and deprovisioning between a SaaS application and their customer’s directory system. Automating the synchronization of user identities across multiple directories ensures accurate, up-to-date user access to the B2B application. 

This guide will explore directory sync, how it works, and its importance in modern IT systems. We’ll also cover essential topics like directory sync, why to use directory sync, and how to implement Directory Sync using SCIM 2.0 protocol and API-based mechanisms.

What is Directory Sync?

Directory Sync is the process of synchronizing users, groups, and other related information between the employee directory system (Source of truth) and a dependent SaaS application. 

Let us understand this with the help of a scenario: imagine a new employee, John Doe, joining the Acme Corp organization. As part of the employee onboarding process, the IT admin of Acme Corp:

• Adds John Doe to Acme Corp’s employee directory, including all the profile details like first name, last name, email, etc. 
• Also adds John Doe to the appropriate user groups within their directory system. 

As soon as IT Admins finishes onboarding John to Acme Corp, all the connected SaaS applications to AcmeCorp’s employee directory will be notified of John’s addition to the directory. These connected SaaS applications will synchronize John’s information as supplied by Acme Corp’s directory and automate the user provisioning within their application based on the preconfigured rules.

Similarly, when John leaves the organization, the IT Admin removes John from Acme Corp’s employee directory, and the connected SaaS applications automatically revoke John’s access because of directory Sync.

To summarize, directory sync connects a source directory (Eg: Azure AD) to a destination directory (Eg: Slack Workspace) and becomes a bridge between them. It does so without the need for human intervention, ensuring consistency and accuracy of user information. 

Key Components of Directory Sync

Before we understand how directory sync works, we must understand its various components.

• Source Directory: The original user data repository can be an on-prem or a cloud-based directory. 
• Destination Directory: The target system where user data needs to be replicated, mostly a cloud-based SaaS application. 
• Synchronization Protocols: These protocols facilitate the data transfer and ensure that updates in the source directory are reflected in the destination. Common protocols include SCIM. Apart from that, custom API driver synchronization can be developed as well.

How Directory Sync Works

Keep the same example of John joining Acme Corp and the IT admin adding him to the employee directory, let’s understand the detailed steps of what happens:

• When changes are made to the source directory (Eg.: John is added), this need to be reflected in Slack.
• The organization implements a SCIM tool, and a SCIM client is configured to interact with the Azure AD and Slack workspace. This tool queries Azure AD periodically for changes and uses SCIM to update these changes to the Slack workspace.
• SCIM ensures that the user data is correctly formatted and mapped between the source and the target directories. 
• The data is securely transmitted over the internet using protocols like HTTPS and other methods to protect sensitive data.
• Once Slack receives the data, it updates its records, ensuring the user information is up-to-date.

Common Use Cases

Employee Onboarding and Offboarding

When a new employee joins a company, their details are added to the organization's on-premises Active Directory. This information is automatically updated and synced to cloud-based applications like Office 365, Salesforce, and other SaaS tools through directory sync. Similarly, when employees leave, directory sync ensures access is revoked across all systems, enhancing security and reducing manual administrative tasks.

Single Sign-On Implementation

Organizations implement Single Sign-On (SSO) to streamline user access to multiple applications using a single set of credentials. While Directroy sync doesn’t enable SSO, it plays a vital role in SSO by ensuring that user identities are consistent across the source directory (e.g., Azure AD) and the SSO provider's directory (e.g., GitHub). This consistency allows users to authenticate once and gain access to all integrated applications, improving user experience and security.

Access Management For Contractors

Organizations often grants external contractors, partners, or vendors access for specific needs. Directory sync allows for creating and managing these external users in a centralized directory, ensuring their access is properly controlled and monitored. When the project ends, directory sync automatically revokes their access across all connected systems, reducing the risk of unauthorized access.

Why Use Directory Sync?

Directory sync is not merely a need but a strategic tool to manage user identities across different systems to enhance security, streamline user management, and boost productivity. Let us understand why you should consider implementing directory sync. 

Enhanced Security

Directory sync ensures that security policies, such as password requirements and multi-factor authentication, are uniformly applied across all systems. This consistency reduces vulnerabilities and minimizes the risk of unauthorized access. Further, by automating user sync, permissions are dynamically updated to ensure users have the correct access permissions. 

Streamlined User Management

By centralizing the user management process through directory sync, you simplify the user onboarding and offboarding process. Administrators can focus on managing user identities only on one centralized system, and the changes will automatically be reflected across all the connected systems, thus reducing manual errors and saving time.

Improved Productivity

Directory sync automates the synchronization of user data across multiple platforms, thus reducing the administrative overhead associated with manually managing users. This automation allows IT administrators to focus more on strategic initiatives while end users experience fewer disruptions in accessing the necessary tools.

Compliance And Audit Requirements

Directory sync helps organizations meet various regulatory and compliance requirements by ensuring that user data is accurate and up-to-date across all systems. It also keeps track of all the changes and facilitates audit trails, making demonstrating compliance with industry standards and regulations easier.

Directory Sync With SCIM

Now that we understand what Directory Sync is, how Directory Sync works, and the benefits of implementing Directory Sync, let us dive into how directory sync works.

Different business applications and directory systems could have completely different user schemas and authentication protocols, making the whole directory sync implementation complex. The System for Cross-domain Identity Management (SCIM) is designed to simplify managing and synchronizing user identities across different applications and services.

SCIM Protocols define a standardized way to send and receive user and group information across two connected parties, including creating, updating, and deleting users across multiple systems and services, thus simplifying user management. This is a push-based model where the source directory “pushes” changes to various destination applications as soon as the changes are done, leading to real-time sync between the source directory and the destination application. 

Refer to our detailed SCIM guide to learn more about SCIM.

How Directory Sync Works with SCIM

Directory sync using SCIM involves the following key steps to ensure consistent and secure user data across systems:

• The source directory stores the user identities that need to be synchronized, which is integrated with a SCIM tool. SCIM is a synchronization protocol between the source directory (Eg: Azure AD) and the destination systems (Eg: Slack)
• The SCIM client monitors the source directory for user creation, updation, and deletion changes. These changes are formatted according to the destination system following the SCIM standard.
• The SCIM client also ensures that user attributes, such as usernames, email IDs, and roles, are correctly mapped between the source and destination directories. 
• The SCIM client sends this formatted data to the SCIM server, which then pushes this to the destination systems, where it is automatically applied. This ensures that the data is consistently updated across connected services.

Uses Cases and Examples

Automated User Provisioning

SCIM is widely used to automate the provisioning of user accounts in SaaS applications. For example, when a new employee is added to the company’s HR system, SCIM can automatically create the corresponding user accounts in tools like Salesforce, Slack, or Office 365. This ensures that the employee has immediate access to essential applications. Similarly, when a user is offboarded, SCIM can automatically update the information across various systems, which can revoke the concerned user's access.

Multi-Tenant Environments

In multi-tenant SaaS platforms, SCIM can manage user identities across different tenants or customers. This allows each tenant to sync their user data securely and efficiently, ensuring only authorized users can access their specific resources.

Challenges and Considerations

Protocol Compatibility

SCIM is a standardized protocol, and different systems may implement it with slight variations to meet their needs. Thus, ensuring that the SCIM client and server are fully compatible can be challenging and may require custom configurations.

Security and Compliance

Synchronizing sensitive user data across systems using SCIM introduces security concerns. To protect data during the synchronization process, it is crucial to use secure transmission methods (e.g., HTTPS) and enforce strict access controls to prevent any security breach.

Scalability

In large organizations with thousands of users, ensuring that SCIM synchronization processes scale efficiently is vital. Properly configuring the SCIM client to handle large volumes of data and frequent updates can help mitigate potential performance bottlenecks.

Customization and Extensions

Some organizations may require custom attributes or extensions that are not covered by the standard SCIM schema. In such cases, it's important to ensure that both the SCIM client and server can handle these custom elements without compromising the integrity of the synchronization process.

Directory Sync With API

While SCIM has defined the standardized way to synchronize the information between two interested parties, not every directory system has implemented SCIM. This leaves the business applications to connect with these Directory Systems via their REST or SOAP-based APIs and keep the user and group information synchronized. 

So, in this API-based directory sync method, the destination system (or the B2B application) constantly polls the Directory System to check for any updates on users and groups. This approach differs from the SCIM-based model (push-based sync), where the source system automatically pushes the updates. 

Because of the pull-based synchronization, API-based Directory Sync will not offer real-time synchronization of users and groups between the Source System and Destination System. 

How Directory Sync with API Works

Directory sync using API based mechanism involves the following steps:

• The target application authenticates (Slack) itself with the source application (Azure AD) using tokens or other authentication means.
• The target application sends an API request to the source application for updated data.
• The source application responds with user data, which may include new user details, updated attributes, or role changes.
• The target application receives this data, processes it, and updates its user database with the updated information. 
• The process repeats as and when the target application requires new data.

Use Cases and Examples

Custom Event-Driven Sync

Some systems, such as dashboards, don’t need continuous updates. In such cases, an API-based pull mechanism can trigger a pull on specific events (like a user login or policy change), ensuring data is fresh only when required.

Custom Transformation Requirements

There are situations when you must apply some transformations on the incoming data before inserting it into your database. The API-based pull model allows the target system to pull raw data and apply some logic before pushing it to the user database. 

Challenges and Considerations

Rate Limiting

API-based mechanisms often encounter rate limits. Most API providers enforce rate limits and restrict the number of allowed requests at certain time intervals, which can impact systems' efficiency when dealing with a multitude of user data. 

Data Freshness

Since this is a more on-demand model that operates on pre-defined intervals, there’s a risk of the data being slightly outdated by the time it’s retrieved, especially if the interval between syncs is long.

API Availability and Latency

The availability and performance of the source system’s API are critical to the target application's performance. If the API experiences downtime or high latency, the directory sync process can be delayed or fail altogether.

Comparing Directory Sync with API and SCIM

Both SCIM and API-based directory sync mechanisms offer distinct advantages suitable for different scenarios. Understanding the differences between both approaches will help you make an informed decision.

Choosing the Right Solution

Depending on your organization's needs and infrastructure, you can choose between using directory sync using an SCIM-based push mechanism or an API-based pull mechanism. Below are a few scenarios that illustrate when to use which one.

Real-time Provisioning

Use SCIM in environments where user updates or deactivations must happen immediately, as this approach guarantees timely changes across all the systems. This approach is ideal for large organizations where real-time access and security updates are critical, preventing delays in access or potential security risks due to outdated permissions.

Scheduled Updates

An API-based pull model works best for applications without necessary real-time updates. It allows you to control the frequency of data requests. For example, an e-commerce platform can pull customer loyalty data from its external CRM system via an API-based pull mechanism and share it with its sales team daily.

Cloud Native Applications

A SCIM-based push mechanism is helpful for SaaS platforms with many users across different tenants. It helps synchronize data across different directories quickly and efficiently without constant polling, ensuring the data is always current.

Best Practices for Implementing Directory Sync

Implementing directory sync involves multiple steps and configurations at each stage, from planning to compliance. Below are a few best practices for implementing directory sync.

Planning and Assessment

Start by assessing your current directory structure, including the systems, user data, and various integration options. Then, define the objectives you want to achieve by implementing directory sync and consider its impact on other systems.

Selecting The Right Tool

Choosing the right tool and associated protocol is critical. Evaluate and select the tools compatible with your existing infrastructure and directory system, including features, scalability, and ease of integration.

Integration and Implementation

Ensure your directory sync solution integrates seamlessly and easily with your existing systems, including on-prem directories, cloud services, and third-party apps. Plan and establish clear processes for syncing user data across systems and conduct a pilot to validate that.

Security

Implement security protocols and techniques for sensitive user data at rest and in transit. Employ strong authentication mechanisms for better security and access control. Regularly review the access control permissions to ensure only authorized people can modify the directory settings and sync processes.

Testing

Before going live, it’s always a good practice to thoroughly test the directory sync process for various scenarios, such as user addition, deletion, etc. Validate data integrity post-synchronization to ensure accuracy and consistency between source and target directories.

Monitoring and Alerting

Implement continuous monitoring techniques to monitor the directory sync process. Use automated alerts to detect and respond to issues like failed sync attempts or security threats like unauthorized access. 

Compliance

Follow industry regulations relevant to your industry, such as GDPR, HIPAA, etc., and align your directory sync process accordingly. Perform regular audits to ensure your processes comply with the latest regulations, and you can tweak them to meet changing requirements.

Conclusion

In this post, we examined the role of directory sync in modern B2B environments. We discussed what it is and how it facilitates seamless user management across various platforms, guaranteeing data consistency, security, and accuracy. Based on the requirements, we also examined SCIM and API-based mechanisms for directory sync.

It’s fair to say that directory sync is not just a technical implementation but a strategic necessity for organizations looking to streamline user management and meet compliance requirements. Whether working with on-prem directories or cloud-based services, implementing directory sync with the proper protocols and tools can improve your overall business efficiency.

Explore these additional authoritative resources to deepen your understanding of directory synchronization:

Additional Resources

• SCIM and Directory Sync - https://datatracker.ietf.org/doc/html/rfc7642#section-3 
• Directory Sync using Microsoft Entra - https://learn.microsoft.com/en-us/entra/architecture/sync-directory 
• Directory Sync using Google - https://support.google.com/a/answer/10616183?hl=en