Peter, a senior IT manager, needed to conduct an urgent online meeting with his team, but his laptop was not working properly. To save time, he connected with his colleagues over a WhatsApp call, fully knowing that using WhatsApp for work-related communications is not what his organization’s IT recommends.
In another instance, Sania, a trainee software developer working at a multinational organization, uses her personal accounts to back up work-related data.
In the same organization, Farhan, a senior UX designer, received an urgent task for which the relevant tool was not yet approved by the IT department. So, to save time, he purchased the application using his personal credentials and completed the project.
All these are examples of Shadow IT practice, a widespread concern in modern IT-driven companies.
What is Shadow IT?
Shadow IT is the use of any IT resource, including software, hardware or human resources, without the approval or beyond the scope of the IT department of your organization.
Notably, malware such as viruses and trojans are not examples of shadow IT. Those are software that enter your architecture by accident or from lack of security.
Shadow IT, on the contrary, is a conscious practice taken upon by IT end-users, where they don’t have to wait for the approval.
Usually, shadow IT can enter your organization in the following ways.
- Use of unauthorized tools to store, access, or share confidential data: Consider, your organization uses Microsoft 365 to store, access or share data. Now, one employee decided to use their personal Google Workplace credentials. That can lead to severe breach of data security.
- Use of authorized tools without the official credentials: In such scenarios, the employee uses Microsoft 365 only, but it is their personal account, not the official one. As a result, the data security is compromised here too.
- Unawareness of IT processes among project/delivery leadership team: Often organizations have great project or delivery leaders who are not from IT, so they may not know the essential IT processes. As a result, they may allow shadow IT considering its immediate benefits, without focussing on the long-term consequences.
- Pressure on project timelines over delivery team: However, in situations where project or delivery managers are well aware about the IT processes but have oganizationa requirements for early delivery, they often resort to shadow IT too.
Additional Read: What is Elastic Licensing: 5 Top FAQs Answered
What are the usual reasons for using shadow IT?
Though the practice of shadow IT is not something organzations should encourage, end-users may resort to this for the following reasons:
- Lack of knowledge: Often, users install applications without IT approval just because they don’t know it could lead to compliance issues and security risks.
- Business benefits: There can be situations when the best tool for a particular business resolution is not approved by the IT. In such scenarios, opting for shadow IT practices for more efficient collaboration or to gain competitive advantages is quite common.
- Quick resolution: Usually, getting an application approved by the IT takes some time, as IT teams conduct all the necessary checks to ensure compliance before purchasing the software. To save this additional time, end-users may use a third-party tool.
- Malicious intentions: Though this is the least common reason of shadow IT, disgruntled employees may install malware and steal confidential data of the organization to cause damages.
- BYOD policy: With the rise of remote work, more and more organizations are okay with letting employees work from their own system. However, this method has an inherent vulnerability as the software an individual uses can be threatening for confidential organizational data with which they have to deal with.
- Management decision: Often, using shadow IT is not what individuals prefer, but it comes as an order from the management. A Gartner study from 2017 showed that 38% of the IT procurements are decided and managed by the organizational leadership, where the IT department is not kept in loop.
A 2024 article on Forbes.com covers how shadow IT is helping individual employees advance in their careers but harming organizations at the same time.
What are the risks of shadow IT?
Though shadow IT on a small scale may seem harmless, its drawbacks can be dangerous for your organization. Here’re the major risks of shadow IT.
- Overall IT asset and data management gets affected: If shadow IT becomes a norm in a company, their IT department loses track of the software assets in the ecosystem, and how they are being used.
- Measuring the extent of the harm caused by shadow IT becomes difficult: If your organization practices shadow IT, it gets too hard to determine how far it has penetrated your IT ecosystem.
- Violation of data compliance laws: Usually, IT organizations need to abide by data protection regulations such as GDPR, and use of shadow IT can make your data compromised-thereby violating the data protection regulations.
- Exposure of sensitive data: Non-compliant IT practices may expose your organization to potential data breaches as employees may resort to using unapproved tools that are easy targets of cyber attackers.
How to detect and stay clear of shadow IT: Components of a shadow IT policy
It is important for IT organizations to implement a plan of action to ensure zero tolerance towards shadow IT practices. The best way out in this regard is formulating a shadow IT policy. Here’s what organizations must consider including in their shadow IT policy.
- Using a shadow IT detection solution: Leveraging a shadow IT tracking tool can help organizations identify unauthorized apps or unauthorized users of authorized apps. Thus, it enables them to minimize shadow IT practices within the organization.
- Encouraging employees to be open about the tools they require: To prevent shadow IT practices, it is important to understand what type of tools employees may require to meet their KRAs. So, an open culture where employees are upfront about their IT requirements is always recommended. Accordingly, IT department can audit tools requested and approve or block them.
- Spread awareness about IT risk management: Conducting training sessions to inform employees about the security risk of shadow IT can be a game changer for your organization’s IT health. It can include safety practices such as not using personal devices or drives for official tasks, reporting any suspected data breach, and more.
Additional Read: Switch to SaaS Licensing Model: How It Can Impact Businesses
How can OpenLM SAM Annapurna help to prevent shadow IT practices?
The legacy version of OpenLM SLM didn’t have any functionality to detect shadow IT. However, with our OpenLM SAM Annapurna upgrade, we now have new functionalities for SaaS monitoring, which will enable IT managers to restrict shadow IT practices by tracking SaaS usage (without identifying users).
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