Centralized credential management is a model where an organization stores employee secrets, such as passwords, recovery codes, and shared account credentials, in one admin-controlled system. Administrators define who can create, view, share, rotate, and revoke access. Strong deployments combine encryption, role-based access control, multi-factor authentication, audit logs, and recovery procedures.
It matters because credential sprawl is a common security weakness: people reuse passwords, share them informally, or keep them after offboarding. A centralized system reduces that exposure and makes monitoring possible. In attacks, compromising the vault or an admin account can be high impact because many secrets are reachable from one place. In defense, the same centralization helps teams enforce policy, detect risky sharing, and remove access quickly when an account is suspected or a user leaves.