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docs/sql-server/azure-arc/managed-identity.md

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## Grant application permissions to the identity
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> [!IMPORTANT]
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> Only a [Privileged Role Administrator](/entra/identity/role-based-access-control/permissions-reference#privileged-role-administrator) or higher role can grant these permissions.
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You can use PowerShell to grant required permissions to the managed identity. Alternatively, you can [create a role-assignable group](/entra/identity/role-based-access-control/groups-create-eligible). After the group is created, assign the **Directory readers** role or `User.Read.All`, `GroupMember.Read.All`, and `Application.Read.All` to the group, and [add all system-assigned managed identities for your Arc-enabled machines to the group](https://learn.microsoft.com/en-us/azure/azure-sql/database/authentication-aad-directory-readers-role-tutorial?view=azuresql). We do not recommend using Directory reader in the production.
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The following PowerShell script grants the required permissions to the managed identity. Make sure this script is run on PowerShell 7.5 or a later version, and has the `Microsoft.Graph` module 2.28 or later installed.
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```powershell

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