Managing Shadow IT: Risks, Challenges and Best Practices

Have you ever needed to get something done at work, but felt limited by the technology and processes at your disposal? Maybe there’s a software you really like using at home, and you want to use it at work, too. If this sounds familiar, it’s likely you may have participated in what IT pros refer to as Shadow IT—a practice that keeps over 69% of IT executives up at night.

What is Shadow IT? 

Shadow IT refers to an employee’s use of information technology—whether it be a device, software or application—without your IT team’s approval. This typically occurs when an employee has a job to get done, and they either have a preferred way of doing so, or they’re looking for a workaround that makes things more efficient. Shadow IT is also commonly found in non-work related apps that employees use for other purposes such as entertainment (think Netflix, or social media apps). 

Recent studies show that 79% of IT pros believe Shadow IT puts company data at risk. While Shadow IT can feel harmless to the end user, it comes with several risks and challenges that IT leaders should plan to manage. 

The Risks and Challenges of Shadow IT

The use of Shadow IT creates numerous challenges for IT departments. Here are some of the risks and challenges that organizations face:

1) Security risks

Shadow IT applications are typically not vetted for security compliance, which can create a security risk for your organization. When unsanctioned apps are used, especially on devices like smartphones or laptops, it increases the risk of incidents related to software vulnerabilities, malware, and potential data loss. Just how prevalent is the security risk? A Gartner report estimates that one-third of successful cyber attacks are the result of Shadow IT. 

2) Compliance risks

Many industries have regulations around the types of technology used to manage sensitive data, and the use of Shadow IT can put organizations at risk of noncompliance. When unsanctioned apps are used, it increases the risk of sensitive information migrating to environments that IT can’t access or keep secure—putting your organization at risk for potential compliance-related fines and reputational damage. 

3) Integration issues

Shadow IT applications may not be compatible with existing systems, leading to integration issues that can disrupt business operations. With an average of 65% of all SaaS apps in an organization’s environment being unapproved by IT, the prevalence of this issue is staggering. 

Let’s use the Marketing department for example. Perhaps they’ve decided to purchase a subscription for a new project management software to manage major campaigns. Over time, more and more valuable data and information are stored in the software. When there’s turnover on the team, or when someone from a different department becomes involved in a marketing project, there’s no way for them to access that information—creating inefficiency and loss of productivity that’s out of the IT team’s control.

How to Manage Shadow IT

Now that we understand the potential risks of Shadow IT, let’s discuss ways to mitigate them and tips for managing it effectively: 

  • Educate employees — Educate employees on the risks of Shadow IT and why it is important to use approved technology to manage company data.
  • Create a policy — Develop a policy around the use of technology within the organization, outlining which software, hardware, and technology services are approved for use.
  • Monitor usage — Use monitoring tools to identify instances of Shadow IT within the organization and take corrective action.
  • Provide alternatives — Provide employees with approved alternatives to unapproved software and applications to discourage the use of Shadow IT.
  • Collaborate with business units — Work with business units to understand their needs and provide approved technology solutions that meet those needs.
  • Consider a BYOD policy — If employees are using personal devices for work, consider implementing a Bring Your Own Device (BYOD) policy that outlines approved software and applications.

Need Some Advice for Managing Shadow IT? 

There’s no one-size-fits-all approach to effectively tackling Shadow IT. Get a grasp on your organization’s true technology ecosystem, and plan a way forward with the help of our team. 

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