What Is Shadow IT?

Businesses constantly seek innovative solutions to improve efficiency and stay competitive in today’s fast-paced digital landscape. However, as employees adopt new technologies to enhance their productivity, a growing challenge known as “shadow IT” has emerged.

Let’s explore what shadow IT is, why it occurs and how companies can address it.

Read: Cybersecurity Best Practices for Your Employees

Understanding Shadow IT

Shadow IT, or “rogue IT,” is the use of technology – systems, devices, applications, software, hardware or services – within an organization without explicit knowledge, approval or oversight from the IT department. This can include anything from using personal email accounts for work-related communication to adopting third-party cloud storage solutions like Dropbox or Google Drive for file sharing. With the increasing availability of easily accessible software and services, employees often bypass traditional IT approval processes to find tools that better meet their needs.

Shadow IT may seem harmless, but it can pose significant risks to a company’s security, compliance and overall efficiency.

The Risks of Shadow IT

Although shadow IT may be driven by the best intentions to provide short-term benefits, such as convenience and productivity, it poses significant risks to an organization, including:

• Security vulnerabilities: Unapproved and unauthorized software or devices may not comply with the organization’s security protocols, leading to potential data breaches. Sensitive company data stored on personal devices or third-party cloud services can also increase the attack surface and leave the data more exposed to cyber attacks. One-third of successful cyber attacks are predicted to come from shadow IT.
• Data loss: When employees use unapproved tools, IT has no visibility or control over the stored, accessed or shared data. This can lead to data loss or unauthorized access, especially if employees leave the company before properly transferring their work-related data. Failure to properly backup data can also result in data loss.
• Compliance issues: Many industries have strict regulations governing the handling and storage of sensitive data, including HIPAA and CCPA. Shadow IT can lead to non-compliance with these regulations, resulting in legal and financial repercussions for the company.
• Operational inefficiencies: Shadow IT can create silos within an organization, where different departments use different tools that are not compatible with one another. This can lead to inefficiencies, obstructed workflows, duplicated efforts and communication breakdowns.
• Increased IT costs: Managing and mitigating the risks associated with shadow IT, like non-compliance fines and penalties, can be costly. IT departments may need to invest in additional resources to monitor and secure unapproved technologies, leading to increased operational costs. Duplicate subscriptions and tools can also increase spending.

Why Does Shadow IT Occur?

The rise of shadow IT is primarily driven by the following factors:

• Need for speed and convenience: Employees often find that the tools provided by their IT department are either too slow or do not fully meet their needs. To maintain productivity, they seek alternative solutions that offer faster and more convenient ways to accomplish their tasks.
• Lack of awareness: In some cases, employees may not be fully aware of the potential risk associated with using unapproved technology. They might also be unaware of the company’s IT policies. Either way, staff might believe they are simply helping the company by using tools that enhance their efficiency.
• Innovation and flexibility: Certain roles within a company, such as marketing or product development, require innovative solutions that standard IT-approved tools may not offer. Employees in these roles may adopt new technology to stay ahead of the curve.
• BYOD culture: The trend of employees using their personal devices for work has contributed significantly to the rise of shadow IT. Personal devices often come preloaded with apps and software that employees are accustomed to using, leading them to bypass corporate IT controls. In fact, 32% of remote and hybrid workers use apps or software their IT departments do not approve.
• Cost-effectiveness: Some employees may believe using free or low-cost cloud services is more economical than purchasing approved software, especially if they have a limited IT budget.

Read: Reduce IT Costs without Sacrificing Quality

How to Manage Shadow IT

To effectively manage shadow IT, organizations should take a multi-layered proactive approach:

• Establish clear policies: Create and communicate clear policies regarding the use of technology within the company. Inform employees about the risks associated with shadow IT and the importance of following IT policies. When staff understand the potential consequences, they are more likely to comply with established guidelines.
• Foster a culture of collaboration: Encourage open communication between employees and the IT department so staff can share their technology needs. When staff feel that their needs are being heard, they are more likely to seek IT support for their IT needs rather than turn to unapproved solutions. Encourage staff to seek IT approval before adopting new tools or using personal devices.
• Provide adequate tools and support: Ensure that the IT department provides tools that meet the diverse needs of employees. Regularly assess the effectiveness of current technologies and be open to adopting new solutions that can improve productivity while maintaining security.
• Implement strong security measures: Use monitoring tools to detect unauthorized software and devices on the network. Robust security controls can also help protect the company’s network and data. This allows the IT department to quickly identify and address potential risks associated with shadow IT.

Protect Your Business with Thriveon

Shadow IT is a growing concern that businesses must address to maintain security, compliance and operational efficiency. One way to combat the dangers of shadow IT is to partner with a managed service provider like Thriveon. We offer robust cybersecurity services that can protect your company’s sensitive data and minimize risks. Schedule a meeting today for more information.