You’ve probably encountered a case where an employee downloads software or purchases hardware for work without the IT department’s knowledge or approval. This is known as shadow IT, and it’s common in most organisations.
While some organisations report long-term benefits like increased employee satisfaction and time savings, shadow IT can present unique challenges to your business. For instance, up to 76% of small businesses report shadow IT poses a cybersecurity risk to their operations.
Employees can use unauthorised tools with the best intentions, but their actions can result in significant risks to your organisation. Here, learn more about shadow IT and how it’s a silent threat to your company’s security.
What is Shadow IT?
As noted, Shadow IT involves using unauthorised tools without going through official IT channels. These can include everything from cloud storage platforms like Google Drive or Dropbox to messaging apps like WhatsApp and unsanctioned software installed on company devices.
For example, an employee might use a personal cloud account to store work-related files, because it’s quicker and more familiar than the company’s approved cloud system. Another might download a project management app to streamline their tasks. These actions, though often well-intentioned, can open the door to vulnerabilities.
The Prevalence of Shadow IT
Shadow IT is more common than many might think—a study by Productiv revealed that nearly 43% of a company’s apps are byproducts of shadow IT.[1] With the availability of free or low-cost cloud services, employees no longer need IT’s approval to adopt a new tool. They can sign up for a service within minutes, without realising the security implications.
The problem is even more pronounced in remote work environments. Employees working from home or on the go are more likely to rely on personal devices or applications to complete their work. The convenience of these tools often blinds them to the security risks they bring into the company’s infrastructure.
Why Do Employees Turn to Shadow IT?
Employees turn to Shadow IT for various reasons, often driven by frustration with existing systems or the desire for faster, more user-friendly solutions. Common motivators include:
● Inefficiency in current tools: When employees find the official tools cumbersome, they may seek alternatives that allow them to work more efficiently. For instance, if the company’s approved file-sharing system is slow or unintuitive, employees might use personal cloud storage.
● Lack of awareness: Many employees aren’t aware of shadow IT security risks. They may not know that using unvetted tools can expose sensitive company data to cyber threats or cause compliance violations.
● Urgency and deadlines: Sometimes, employees need to meet tight deadlines and don’t have time to wait for IT approval. In their rush to complete tasks, they may bypass IT protocols and use whatever tools they have available.
Education is the first line of defence against shadow IT. Employees need to understand the security risks of using unauthorised tools and apps. Regular training and clear communication around IT policies can reduce Shadow IT activity.
The Risks of Shadow IT
While Shadow IT might seem harmless, its risks can be profound, posing serious challenges to both security and compliance.
Data Breaches
Unauthorised apps and services create invisible and serious security risks for organisations. The tools lack the same security as approved enterprise systems. For instance, a study showed that up to 68% of organisations had exposed shadow APIs. If sensitive company data is stored on such apps, it could lead to data breaches and other security risks.
Lack of Visibility
One of the biggest dangers of Shadow IT is that the IT team has no visibility into the tools. About 41% of employees use technology that the IT team can’t see. This lack of oversight makes detecting vulnerabilities, enforcing security policies, or tracking potential threats difficult for IT. As such, IT can’t protect what it doesn’t know exists, exposing the company to risks.
Compliance Violations
Many industries, such as finance and healthcare, have strict regulations for data security and privacy, such as the Telecommunications Act 1997 (Cth) and the Health Records (Privacy and Access) Act 1997 (ACT). When employees use unauthorised tools to store or transmit data, the company may violate compliance standards, leading to hefty fines and legal penalties.
Inconsistent Security Measures
Officially sanctioned tools undergo vetting processes to ensure they meet security standards. Shadow IT, on the other hand, often lacks the encryption, authentication, and data protection measures crucial for safeguarding company information. This inconsistency can create gaps in the company’s security framework, making systems vulnerable to attacks.
How to Combat Shadow IT
While eliminating Shadow IT may not be realistic, companies can take proactive steps to minimise its risks and manage it effectively.
Encourage Collaboration with IT
Instead of creating an adversarial relationship between employees and the IT department, foster a culture of collaboration. If employees feel that IT is approachable and responsive to their needs, they’re more likely to seek approval for new tools. This will allow the IT team to work with employees to find solutions that meet security requirements and productivity goals.
Implement Cloud Access Security Brokers (CASBs)
CASBs are security tools that give organisations visibility into cloud-based applications. They help identify Shadow IT, enforce security policies, and ensure regulatory compliance. CASBs provide a layer of control over third-party apps, making it easier for IT teams to monitor and manage Shadow IT.
Offer Approved Alternatives
Sometimes, Shadow IT arises because the tools employees need aren’t available through official channels. By offering a variety of sanctioned tools that cater to different workstyles and needs, companies can reduce the likelihood that employees will turn to unauthorised apps.
Regular Audits and Monitoring
Regular IT audits across the company can help identify unauthorised tools. Monitoring network traffic and cloud usage helps detect Shadow IT, allowing the IT team to address issues before they become security threats. For instance, you can use composable solutions to deploy security auditing and monitoring tools to track user activities and system events.
Deliver Effective IT Solutions with April9
Shadow IT might seem like a small issue, but its impact on a company’s security can be catastrophic. With up to 75% of employees expected to use shadow IT by 2027, organisations must take a proactive approach through education, monitoring, and collaboration to reduce risks and strengthen their overall security posture.
At April9, we offer technology that supports your business security and growth. With our composable software platform, Stack9, you can build custom solutions for your business to reduce reliance on shadow IT. Plus, you get a unified platform for all the essential business tools to enable effortless monitoring and collaboration.
Get in touch today and discover how our Stack9 technology can help you mitigate shadow IT.
