What is Shadow IT: Benefits, Risks, and How To Control It
What is shadow IT?
According to Gartner: Shadow IT refers to IT devices, software, and services outside the ownership or control of IT organizations.
It is important to note that shadow IT comes in many different types. Hardware devices can be shadow IT. SaaS software can be shadow IT. Third-party service providers can be shadow IT. If it is inside of your IT environment and you don’t know it’s there, it’s shadow IT.
So, now that we know what shadow IT is, the obvious next question is ‘Why does shadow IT exist’? For that, we’ll look at the advantages of shadow IT.
What are the benefits of shadow IT?
Shadow IT, despite its potential risks, offers several advantages to business units and individual employees. These advantages are why shadow IT tends to proliferate despite security and IT policies that seek to curb its use.
Quicker and easier business innovation
Shadow IT allows departments to quickly adopt new technologies or tools without going through formal IT processes. This is especially true in cases where IT processes are considered to be a lengthy and cumbersome roadblock to change rather than a productive partnership between IT and business units. The agility shadow IT provides fosters innovation and experimentation within the organization, leading to transformative solutions. In these cases, the reward is considered to be more than the potential risk to the organization.
Enhanced productivity
Shadow IT enables teams and individuals to select the tools that best meet their specific needs and preferences, rather than relying on the one-size-fits-all solutions provided by the IT department. This flexibility enhances productivity and efficiency by aligning technology more closely with business goals, allowing employees to generate better results.
Time and cost savings
By bypassing formal IT and purchasing channels, teams can acquire and implement solutions more rapidly and at a lower cost. This can be particularly advantageous for small projects or temporary needs where the overhead of formal IT processes may be prohibitive.
Increased employee satisfaction
Deciding to use shadow IT puts technology decisions into the hands of end users, empowering them to take ownership of their tools and workflows. This leads to greater satisfaction and engagement among employees, as they have a greater sense of control over their work environment.
Source of digital transformation
Experimentation at the grassroots level allows teams to discover and experiment with new technologies or approaches in a controlled manner. These shadow IT initiatives can lead to the development of innovative solutions or processes that are an improvement on existing IT practices. In that case, shadow IT may be integrated into official IT systems and even drive broader digital transformation efforts.
Even given these advantages, however, it's important to balance these advantages with the risks presented by shadow IT, such as security vulnerabilities, compliance issues, and fragmented technology landscapes.
What are the risks created by shadow IT?
Despite the advantages that shadow IT provides organizations, it is important to remember that shadow IT also poses several disadvantages as well.
Lack of standard security protection
If the security team doesn't know it exists, it likely isn’t covered by the organization’s existing security structure. Since shadow IT involves the use of unauthorized or unapproved software and services, they may lack the baseline security features or updates that users take for granted with IT-approved technology. This can expose the organization to cybersecurity threats such as data breaches, malware infections, or unauthorized access to sensitive information.
Compliance and regulatory problems
Unapproved technology solutions may not meet regulatory requirements or industry standards, leading to potential legal and financial consequences. Even organizations outside of traditionally highly regulated industries such as healthcare or finance may face severe penalties for non-compliance considering the recent proliferation of data protection laws and privacy regulations such as GDPR and CCPA.
Increased chance of data breaches
Shadow IT can result in the proliferation of data across various unauthorized platforms and devices, making it challenging for the security team to manage and protect sensitive information effectively. This increases the risk of data loss, leakage, or unauthorized exposure, especially if employees use consumer-grade cloud storage or file-sharing services.
Technology silos inhibit productivity
Shadow IT can create a fragmented technology landscape within an organization, with different departments or teams using disparate tools and platforms. This lack of integration and standardization can hinder collaboration, productivity, and visibility across the organization.
Lack of IT support and maintenance
IT departments lack visibility and control over unauthorized shadow IT technologies. This means that teams, both IT and end users, will struggle to support and maintain shadow IT solutions effectively. This can result in increased workload, higher support costs, and difficulties in ensuring the reliability and performance of critical business systems.
Increased cyber resilience risk
Shadow IT introduces additional layers of complexity to your IT environment, which has a significant impact on cyber resilience. During a disaster or cybersecurity incident, the presence of shadow IT complicates incident response efforts as security teams struggle to identify and mitigate threats across unauthorized assets, exacerbating the impact of the disaster on business operations.
Since shadow IT assets are not centrally managed or documented, they become blind spots during disaster recovery efforts, hindering your ability to quickly restore critical services and functions. This fragmentation also complicates data backup and recovery processes, as critical business information may be scattered across disparate locations or stored on unapproved cloud services. In the event of a disaster, recovering this fragmented data and systems can be time-consuming and resource-intensive, delaying the restoration of normal business operations.
Wasted resources and opportunities
Shadow IT often occurs without proper oversight or alignment with organizational goals and priorities. This can lead to duplication of efforts, wasted resources, and missed opportunities for strategic technology investments that support long-term business objectives.
While shadow IT may offer short-term benefits in terms of agility and flexibility, its unmanaged and uncontrolled nature can create significant risks and challenges for your organization in the long run. You should strive to strike a balance between empowering users and maintaining appropriate oversight and governance over technology usage.
Two easy steps to handle shadow IT
“Security people should focus on finding where shadow IT exists, and where possible, bring it above-board by addressing the underlying user needs that shadow IT is seeking to address.”
Find shadow IT
It sounds deceptively simple, but gaining complete visibility into your IT infrastructure can be difficult for organizations to accomplish. In order to discover the shadow IT that exists in your organization you need to implement an asset discovery and inventory solution that is able to discover all digital assets within your IT environment and create a catalog of them.
Many IT and cybersecurity initiatives — such as cyber resilience, incident response, and digital transformation — rely on having an up-to-date inventory of all assets within an organization. An asset inventory solution with a strong asset discovery capability is able to scan your environment and uncover assets that are not included in your existing inventory, such as shadow IT resources. They are even able to discover formerly allowed assets that may have slipped through the cracks at some point and are no longer actively managed or documented.
An asset inventory is able to remain accurate by automatically updating its database with newly discovered devices and removing outdated or decommissioned assets, preventing gaps or inaccuracies in the inventory that could arise from manual entry errors, oversights, or changes in the IT environment.
This helps you discover unauthorized devices and software, but what about third-party services?
An asset discovery tool is able to identify if your IT environment is connected to, and communicating with, third-parties. This allows you to spot unauthorized connections and trace them back to the business unit that they are communicating with.
Address the root cause of the problem
Here are a couple of ways that you can engage with employees in a constructive way that seeks to control shadow IT by improving IT processes and policies.
Employee surveys and feedback
Use surveys, interviews, or other feedback mechanisms to understand employees’ technology needs and preferences. Encourage open communication and educate employees about the risks associated with shadow IT, encouraging them to report any unauthorized software or applications they encounter.
Collaborate with business units
Work closely with different business units or departments to understand their technology requirements and identify any shadow IT initiatives they may be using. Foster collaboration and provide approved alternatives or solutions that meet their needs while ensuring compliance and security. Be open to the possibility that the best solution for the organization may be to adopt the shadow IT solution and bring it under the IT team’s management.
What not to do
“It is important to re-iterate that most shadow IT is typically not the result of intentional rule-breaking, rather the result of staff trying to ‘get their job done’ where corporately-provided equipment and services are not adequate. In many cases, staff may not realise that they are placing the organisation at risk.”
Blindly enforce policies; place blame and punish employees
While having clear policies and guidelines regarding the use of technology resources within your organization is good for the organization and a best practice encouraged by many regulatory frameworks, it should not get in the way of what is best for the organization. Enforce policies through user awareness programs and regular audits, however, take a light hand with disciplinary measures for non-compliance. Being too harsh on offenders can drive shadow IT further underground. Turning shadow IT into a battleground between the business and IT teams is counterproductive and harmful.
Conclusion
Understanding shadow IT is crucial in today's rapidly evolving technological landscape. While shadow IT can promote agility, innovation, and productivity, it also introduces security vulnerabilities, compliance challenges, operational inefficiencies, and resilience risks. By implementing an asset inventory solution and fostering collaborative relationships with business units, organizations can gain visibility into shadow IT and mitigate its risks effectively. However, it's essential to approach shadow IT management with a balanced perspective, focusing on addressing underlying user needs while maintaining appropriate oversight and governance. By doing so, organizations can harness the advantages of shadow IT while minimizing its potential drawbacks, ultimately fostering a more secure, compliant, and productive technology environment.
The Redjack Asset Discovery and Inventory Solution
The Redjack cyber resilience platform includes an AI-powered asset discovery and categorization engine capable of not only giving you complete visibility into your connected infrastructure but also mapping how those assets connect to each other and to your critical business functions. Furthermore, Redjack helps you identify how resilient your assets are through asset resiliency scoring. This approach has a significant impact on the effectiveness of both IT and business, making cyber resilience a valuable asset.
The Redjack platform has been successfully implemented in some of the world's largest corporations and government agencies. Contact us to discover how Redjack has helped these organizations achieve genuine cyber resilience.
