What Is Single Sign-On (SSO) and Should Your Business Use It?

Count the logins your team juggles: email, chat, accounting, CRM, payroll, file storage, project tools, a few industry apps. Each one has its own password, its own reset flow and its own list of users that someone has to keep up to date. When an employee leaves, you hope you remember every account.

Single sign-on, or SSO, replaces that sprawl with one company login. Employees sign in once and the rest of their apps open without another password. For IT, it means one place to add people, enforce security rules and cut access off.

This guide explains how SSO works, what it does and does not protect against, how it is priced and how a small team can roll it out without disrupting work.

What single sign-on is

SSO is a setup where one trusted system, called the identity provider (IdP), handles sign-in for many other apps, called service providers. Instead of each app checking its own password, the app asks the identity provider, “Is this person who they say they are?” The identity provider confirms it and the app lets them in.

Common identity providers include Microsoft Entra ID, Google Workspace, Okta and JumpCloud. If your company already uses Microsoft 365 or Google Workspace, you probably have an identity provider today, even if you have not connected other apps to it yet.

SSO is different from a password manager. A password manager stores a separate password for each app and fills it in for you. SSO removes the separate password altogether for apps that support it. Many businesses use both: SSO for apps that support it, and a password manager for everything else.

How SSO works behind the scenes

When an employee opens a connected app, a short handshake happens in a second or two:

1. The employee goes to the app, for example a CRM.
2. The app sees they are not signed in and redirects them to the company identity provider.
3. The identity provider checks their credentials and MFA, or recognizes they already signed in today.
4. The identity provider sends the app a signed message, called an assertion or token, confirming who the user is.
5. The app trusts that signed message and opens the employee’s account.

These handshakes use open standards, so most business apps can connect to most identity providers:

The OpenID Foundation describes OpenID Connect as a simple identity layer on top of OAuth 2.0. SCIM, defined by the IETF in RFC 7643 and RFC 7644, is the piece many small businesses overlook. SSO controls who can sign in, while SCIM keeps the user lists inside each app in sync, so accounts are created on hire and disabled on exit without manual work.

The security trade-offs of SSO

SSO puts all your eggs in one basket. That sounds risky, but in practice a well-guarded basket usually beats dozens of poorly guarded ones.

Where SSO improves security

• Fewer passwords to steal or reuse. Staff have one strong credential instead of many weak or repeated ones.
• MFA everywhere at once. You enforce multi-factor authentication at the identity provider, and every connected app inherits it.
• Fast offboarding. Disable one account and access to every connected app stops. That closes one of the most common gaps when people leave.
• One audit trail. Sign-in logs for connected apps live in one place, which makes odd logins easier to spot.
• Conditional access. Many identity providers can block sign-ins from unmanaged devices or unusual locations.

Where SSO adds risk

• A single point of compromise. If an attacker takes over an employee’s SSO account, they reach everything that account can reach. Strong, ideally phishing-resistant, MFA is not optional.
• A single point of failure. If the identity provider has an outage, people may not be able to sign in to anything. Ask about uptime and plan an emergency access method.
• Admin accounts become crown jewels. Whoever administers the identity provider can grant themselves access to every app. Limit these accounts and protect them with hardware keys.
• Gaps for apps that do not support SSO. Local accounts and shared logins still need a password manager and manual offboarding.

Key takeaway: SSO is only as strong as the sign-in that protects it. Pair it with phishing-resistant MFA for admins, number-matched or app-based MFA for everyone else, and a tested emergency access plan.

Read our guide to multi-factor authentication types to choose the right method, and see how SSO fits a wider zero trust security approach.

What SSO costs and the “SSO tax”

SSO pricing has 2 parts: the identity provider and the apps you connect.

• Identity provider. Some productivity suites include basic SSO for their own apps and limited third-party apps. Standalone identity platforms usually charge per user per month, with higher tiers adding features such as conditional access, provisioning and device checks.
• The apps themselves. Many software vendors only offer SAML or OIDC sign-in on their business or enterprise plans, which can cost noticeably more per user than the standard plan.

That second cost is often called the “SSO tax.” In a June 2024 blog post on barriers to SSO for small and medium businesses, CISA said customers should not have to bear an onerous SSO tax and urged vendors to include SSO in base offerings. Prices vary widely by vendor and change often, so check each app’s current plan page before you budget.

Before upgrading every app, ask a few questions:

• Which apps hold sensitive data or payment access? Prioritize those.
• Does the vendor support SCIM on the plan you are considering, or only SAML sign-in?
• Can you consolidate overlapping tools to offset the upgrade cost?

Should your business use SSO?

A simple rule of thumb: the more apps and people you have, and the more often people join or leave, the more SSO pays off.

If you are working toward a security certification, see our SOC 2 compliance guide.

How to roll out SSO in a small team

You can roll out SSO in stages over a few weeks without a big-bang cutover.

1. Inventory your apps. List every app, who uses it, what data it holds and whether it supports SAML, OIDC or SCIM. Your card statements and expense reports are a good starting point.
2. Pick your identity provider. If you already run Microsoft 365 or Google Workspace, start there. Choose a standalone IdP if you need broader app coverage or advanced policies.
3. Clean up identities first. Remove stale accounts, fix duplicate names and agree on one email format. SSO will copy any mess you start with.
4. Lock down the IdP. Turn on MFA for everyone, use security keys for admins, and create 2 emergency “break-glass” admin accounts stored securely offline.
5. Pilot with 2 or 3 apps. Choose high-value apps with good SSO support and a small group of willing users. Fix confusing steps before going wider.
6. Turn on provisioning. Where SCIM is available, connect it so new hires get accounts automatically and leavers lose them automatically.
7. Disable old passwords. Once SSO works for an app, turn off direct password login if the app allows it, so people cannot bypass the identity provider.
8. Expand and review. Add apps in waves, and review admin roles, unused accounts and sign-in alerts every quarter.

Tie your SSO rollout to your HR process so every hire and exit triggers the right steps. Our employee offboarding IT security checklist covers what to do on someone’s last day.

Conclusion

SSO turns a pile of separate logins into one strong, well-monitored front door. It reduces password risk, makes MFA universal and makes offboarding fast. The trade-off is concentration of risk, which you manage with strong MFA, tight admin controls and an emergency access plan. Start with the identity provider you already have, connect your most important apps, and expand from there.

Sources

• CISA: Why SMBs Don’t Deploy Single Sign On (SSO) — barriers to SSO adoption and the “SSO tax”
• OpenID Foundation: OpenID Connect Core 1.0 — OIDC as an identity layer on top of OAuth 2.0
• IETF RFC 7644: SCIM Protocol — standard for provisioning and managing user accounts across systems
• IETF RFC 7643: SCIM Core Schema — common user and group schema used for provisioning