To allow a service running on VM1 to manage resources in RG1 using the identity of VM1, the first step is to enable the Managed Service Identity (MSI) for VM1. This will create a service principal in Azure AD that represents VM1's identity and allows it to access Azure resources securely. Without enabling MSI, you cannot assign permissions or roles to VM1 for resource management.
To ensure users can use single sign-on (SSO) to access Azure resources, you should first add and verify the custom domain name in Azure AD. This action resolves the UPN (User Principal Name) mismatch between Azure AD and the on-premises Active Directory, which is causing the issue of users being prompted multiple times to sign in and using an onmicrosoft.com account name.
Staging mode in Azure AD Connect is designed for testing purposes. When staging mode is enabled, the server does not run export operations, including password sync and password writeback. As a result, synchronization jobs will not be completed. To ensure that synchronization completes successfully, staging mode must be disabled. Disabling staging mode allows the server to resume normal synchronization operations, including exports and password synchronization.