Corporate directory projects easily can top $4 million and are rife with peril, but companies that successfully deploy the technology can unify user identities and build new security services, according to a new report.

Creating, maintaining and using digital identities, known as identity management, is such a critical issue that it is sparking conversations right up to the highest levels in organizations, says Gerry Gebel, an analyst with Burton Group and author of the report, titled Directory Strategy Survey: Organizations Share Their Real-Life Experiences

"To begin building federated identity services, single sign-on, and attribute sharing between partners and different security domains, you need to get a directory established that is an authoritative source of data," Gebel says.

But that's not easy. The survey, which details the trials and tribulations of nearly a dozen directory projects at large, unnamed global companies, found that the average directory project cost between $2 million and $4 million last year. Those figures included software, hardware, staffing and professional services. The projects lasted from 12 to 18 months.

And that may be the easy part. Like any large project, building a directory requires approval across an organization. The survey found that successful directory projects began with building a strong business case, lining up supporters within the organization and establishing a directory governance model that stays in place from implementation through operation of the directory. Also important was developing a set of guiding principles and detailed documentation.