With an enterprise identity management system, rather than having separate credentials for each system, a user will have a single digital identity to access all resources to which the user is entitled. Federated identity management extends this approach beyond the enterprise level, creating a trusted authority for digital identities across multiple organizations. In a federated system, participating organizations share identity attributes based on agreed-upon standards, facilitating authentication from other members of the federation and granting appropriate access to resources.
Modern enterprise security uses a layered identity approach for access to more sensitive networks, systems, applications and information. Sensitive data is normally protected using multi-factor authentication where, as well as user-id and password, a user is required to swipe a security badge into a reader. The security badge is a smart card that is likely to contain a digital certificate issued to the user by the enterprise.