When using a distributed system, you need to be sure that your data and processes support your business needs without allowing unauthorized access to critical information. Learn more about the security guidelines that apply to SAP NetWeaver Identity Management.
Links to Security Guide (SMP login required):
The password, for IC-authentication is stored in a attribute MX_PASSWORD, which is MD5-hashed. If you want to use two-ways-encryption, the attribute MX_ENCRYPTED_PASSWORD is used. The password here is 3DES-Encrypted. This attribute is used to store passwords which should be provisioned to target systems.
Secure SSL Communication Between IDM and LDAP Directory:
Read the blog "Securing the transport layer between SAP IDM and LDAP".
Securing Connections to the ABAP AS with SNC
See the wiki entry here