Managed IT Services

What Is Shadow IT?

Post by
Net Friends

With companies of all sizes recently authorizing permanent remote work flexibility, various sectors are starting to see the positive adoption of remote business models, such as Anywhere Operations. While employees lean into the freedom of working from anywhere, businesses must recognize and address the security risks associated with remote work, including an increased reliance on shadow IT.

What Is Shadow IT?

Shadow IT arises when employees or departments use software, applications, or hardware that are not known or approved by the IT department. As the name suggests, it is an “extra” yet unsanctioned set of tools that individuals use in the workplace (whether in-office, hybrid, or remote). The prevalence of shadow IT has grown over the years with the adoption of more cloud-based apps and services, and further increased with today's distributed workforces.

Notable factors that give rise to shadow technology include:

  • Any gaps in the organization’s IT systems that tempt employees to pursue their own solutions to get work done
  • An employee's preferred tools that make their job easier
  • BYOD policies that lead to more shadow technology and unmanaged tools/devices
  • The absence of IT security policies (or a lack of enforcement on existing policies)

Top 5 Shadow IT Risks to Consider

While employees may innocently use shadow technology, this approach comes with several risks:

1. Data Security Risks

While shadow technology may create more convenience to staff, they introduce significant security vulnerabilities to your operations. Shadow IT software, applications, and hardware do not undergo the same IT security procedures as supported technologies.

It's highly likely that shadow IT skips the Research & Development (R&D) process and has not been accessed for risks nor determined to the best solution for the business; even when it may feel like the best solution for the employee.

Shadow IT can increase malware and other cybersecurity issues within your company’s network. Even though some non-vetted SaaS applications may seem harmless, they may encourage confidential data sharing outside the company approved and secured channels. The best practice is for your IT department to know and evaluate all software, applications, and hardware in use. It’s far better to prevent a data breach than to recover from one.

2. Configuration Challenges

Your IT department should to create and maintain a configuration management database (CMDB) to identify and establish visibility into how IT systems work together. However, if someone introduces an unauthorized app or hardware, it's improbable that the tool or device will be supported or included in the CMDB. Shadow technology can disrupt the workflows that your IT experts have carefully configured for maximum productivity and security.

3. Insufficient IT Visibility

Shadow IT creates blindness when it comes to maintaining and managing your IT infrastructure. If a department relies on a shadow IT app that malfunctions, then your IT department may not have the knowledge or documentation to perform a fix.

Even when an app may appear to use little space or be relatively insignificant, it may still harm bandwidth and impact efficiency. When unauthorized tools update, they can also cause issues within your IT infrastructure. All of these disruptions become bottlenecks and can contribute to lost productivity for a department, the company, and your IT team.

4. Siloed Workflows Stunting Collaboration

Collaboration is more challenging if every department in your organization uses a different set of software and apps. For example, when a company has not issued a standard tool for file sharing and one department builds their team around DropBox, while another uses Google Drive, which tool will these teams choose for project collaboration?

When each department's IT is a law unto itself, inter-departmental cooperation is less effective, and you lose productive synergy. Deeper challenges may arise when a single document gets uploaded twice to different tools, creating multiple drafts to exist and track.

5. Inability to Meet Compliance Regulations

Shadow IT could compromise your network security and place your consumers and partners at risk. Your company will most likely have to meet regulatory requirements such as HIPAA or PCI-DSS. These unsanctioned software, applications, and hardware could place your company’s trust and reputation at risk. All regulatory audits will carefully check that your documentation guides your daily operations. Failure to comply could lead to hefty fines, license/credential loss, a public relations fallout, and loss of market share. 

How Do You Address Shadow IT?

Tip #1: Don't Dismiss Shadow Technology

While there are risks to shadow technology, not all unsanctioned tools have a negative impact. Employees may discover software, applications, and hardware with features that could benefit your company. Shadow IT derives from operational gaps and dysfunctions, yet it's essential to consider how you can leverage your employees' resourcefulness and creative inclinations.

Tip #2: Innovate by Leveraging Shadow IT

Shadow IT is a result of gap filling a problem with available solutions. Your IT department should identify and evaluate shadow technology to determine where they can be added into your approved IT infrastructure.

Here are a few ways that you can bring your company’s shadow IT into compliance with your security policies:

  1. Encourage Openness in Sharing Solutions: When employees know that their input is valued, they will be more likely to share their discoveries.
  1. Sensitize Stakeholders to Shadow IT Risks: While you want to encourage innovation, also teach employees about the potential cybersecurity risks of these technologies.
  1. Emphasize Data Security: Securing company data is not only management’s responsibility - it’s the responsibility of every person in your organization. 
  1. Advise Staff on Regulatory Requirements: Make these requirements known at all levels to get cooperative buy-in. Doing so will prompt everyone to take action to ensure your compliance.
  1. Choose Low- & No-Code Technologies: Employees may choose shadow IT options because they are easier to navigate. If your IT department prioritizes technologies with intuitive interfaces, it will reduce the incidence of shadow IT.

Tip #3: Be Firm When You Can't Adopt Shadow IT

There will be instances where you can’t officially adopt shadow IT into your operations. Some of these technologies may be incompatible with your environment — for example, if your organization uses MS Teams, then Zoom would not be an ideal solution to adopt as it would be a duplicate solution. Others may have significant cybersecurity risks.

Each shadow technology needs to be assessed on its own merits and against existing standardized solutions. If a standard solution does not exist yet, shadow IT creates a valuable opportunity to examine gaps and new opportunities.

Continuous Innovation for IT Systems

Net Friends is a Managed IT Services Provider committed to supporting today's distributed workforces. We work with businesses of all sizes to create security policies and implement the latest technologies to empower your teams. Contact us today to discuss how we can help you manage your infrastructure and assess your shadow IT risks to increase your productive synergy, profitability, and market competitiveness.

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Originally Published: May 3, 2022
Revised & Updated: August 1, 2023

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