Businesses thrive today thanks to technology’s efficiency, but this increasing reliance also poses new blind spots. Understanding shadow IT is crucial for brand leaders, especially when it puts their enterprises at risk.

What Is Shadow IT?

Shadow IT is when employees turn to unauthorized software, devices or cloud services without the IT department’s knowledge. Examples include employees using personal cloud storage to access corporate data from anywhere or unauthorized collaboration tools to transfer documents. 

Among the online services used by central IT staff does not know, personal email ranks first at 42%, file storage services at 35%, and sharing applications at 21%. Although shadow IT provides immediate solutions to workers’ needs, it goes against the work policy, as there’s no approval from the regulation and security group. Companies usually do not know the scope to which shadow IT lurks in their operations. This puts organizations at risk regarding security, productivity and compliance efforts.

Why Shadow IT Is a Risk

Approximately 71% of employees use unapproved software or applications at work. When workers turn to tools they feel will help their productivity and efficiency, it introduces a host of vulnerabilities, including:

• Security breaches: Unapproved tools may acquire access to sensitive company information. These apps often lack the regulation measures necessary to safeguard data, which may lead to leaks, hacking attempts and possible exposure to malware.
• Sharing corporate data: Workers could input sensitive corporate information into unvetted resources, which leaves data unprotected.
• Compliance violations: Breaches usually result from employee carelessness, which leads to shadow IT violating data privacy laws such as the General Data Protection Regulation or the Health Insurance Portability and Accountability Act. Highly regulated businesses may suffer hefty fines and damage to their reputations.
• Reduced IT oversight: The sheer amount of unapproved tools leads IT departments to lose track of which applications or devices are in use across the organization, creating blind spots in their security infrastructure.
• Collaboration inefficiencies: Work may be duplicated due to the lack of integration.

How to Combat Shadow IT in Your Organization

The key to managing shadow IT is knowing it exists. Companies can then take these practical steps to reduce risks and create a more secure digital environment.

1. Create a Comprehensive IT Policy

When employees turn to unregistered tools, they mainly want to improve their efficiency. Rather than framing a tools policy as restrictive, organizations must clarify that it’s for safety. Ensure it highlights what shadow IT is, what risks it can pose and what steps staff can take when requesting approval for new tools.

2. Utilize Tools to Identify Shadow IT

Visibility is key to managing shadow IT effectively. Brands should use best practices and automated tools to detect unauthorized apps, devices or services operating within their networks. Options include:

• Continuous monitoring: Automated network scans can reveal where there may be hidden devices, unregistered applications or cloud services.
• Risk assessments: Gauge the vulnerabilities and risks of using specific unapproved tools.
• Cloud security audits: Identify gaps such as misconfigurations and potential compliance issues. Make sure workers only use approved cloud services instead of personal storage.

3. Empower Employees With Approved Tools

Shadow IT often emerges because employees feel the existing tech stack doesn’t meet their needs — hence, they innovate. The more tech-savvy the employee is, the stronger the tendency to resolve issues independently or navigate around roadblocks through unregistered apps.

There are a few reasons why workers dabble in shadow IT. First, the IT department may be out of touch with the organization and not meeting the team’s needs. Another is familiarity — employees may opt to use software they are more experienced in, ignoring those recommended.

Communicate with your workforce regularly to see which tools they require. Their feedback is crucial for improving workflows and reducing the temptation to go with unapproved options. By meeting people where they are, enterprises can simultaneously boost productivity and minimize shadow IT.

4. Strengthen Security Measures

A strong security foundation must be in place to reduce the risks associated with shadow IT. Consider implementing these measures:

• VPNs and encryption
• Multifactor authentication
• Zero trust model
• Backup and patch management

5. Educate and Train the Workforce

Often, employees are unaware they’re contributing to the threat shadow IT causes. Educating them about its risks is among the most effective measures against it. Cybersecurity training should cover real-world examples of data breaches caused by lax compliance, followed by actionable recommendations on safe technology practices.

To be effective, the program should be interactive. If it's fun, people are more likely to remember what they learn and be more willing to train. The sessions should also happen regularly so they can stay up to date with new best practices and incorporate testing to see who might need a refresher.

Extend this training to remote work setups, as personal devices and home networks are common culprits in shadow IT. Encourage staff to think critically about the tools they use and to seek IT approval before introducing new solutions into their workflow.

Shedding Light on Shadow IT

By taking proactive measures against shadow IT, entrepreneurs and companies more than reduce their susceptibility to risk. They also welcome a more efficient and innovative workplace that listens to employees' needs. A well-managed IT ecosystem is the best defense against threats like shadow IT.

Addressing it is not a one-time task — it’s an ongoing process that requires constant identification of shadow-IT-contributing decisions. By following the highlighted steps above, organizations can balance innovation and security.