In brief: Decentralized identity management with W3C standards replaces error-prone synchronization of federated IAM systems in multi-supplier networks.
Self-Sovereign Identity (SSI) and digital wallets make it possible to shift the management of external identities from the enterprise to the responsibility of partner companies. This significantly reduces administrative burden and security risks such as orphaned accounts.
Classical management of external identities in supply chains operates through federated models based on SAML or OpenID Connect: the target enterprise trusts the partner’s IAM system and accepts its authentication at login. In practice, however, a critical problem emerges: many smaller suppliers, craft businesses, and specialized agencies lack the necessary IT infrastructure for clean federated integration. Additionally, severe security gaps arise when employees leave — their account is deactivated at the partner, but authorization at the target enterprise often remains active for weeks or months. These orphaned accounts create a critical attack surface that cybercriminals can deliberately exploit to attack the supply chain.
Self-Sovereign Identity breaks with the concept of centralized data storage and direct system synchronization. The model is based on W3C standards for Decentralized Identifiers (DIDs) and Verifiable Credentials and follows a clear three-party schema: the issuer (the partner company) generates cryptographically signed digital credentials for its employees that confirm, for example, active employment relationships, security certifications, or authorized positions. The holder (the external employee) stores these credentials in a digital wallet on a mobile device or in a secure cloud wallet.
This decentralized model shifts administrative responsibility directly to the partner company: only the issuer can revoke the digital credential when the employee leaves the company. The target enterprise does not need to synchronize or monitor accounts — it only requires current verification by the digital wallet at the time of access. This not only eliminates time-consuming manual processes but also the systematic weaknesses that arise from outdated or incompatible system landscapes.
Source: www.it-daily.net · Published 20 June 2026
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