Demystifying Shadow IT How to Manage Unsanctioned Technology

Shadow IT, you’ve probably heard the term thrown around in tech circles and IT departments. It likely conjures images of something from a spy novel. However, it is real, affecting businesses across all industries. Shadow IT refers to IT applications, solutions, services or other technology used within a company without explicit organizational approval. This unauthorized use could include a team opting for a file-sharing app or an individual downloading software not supported by the IT department.

Today, the upswing of Shadow IT stems both from the pursuit of convenience as well as the rise of generative AI. As this innovative technology becomes more accessible and widespread, employees may be tempted to utilize AI tools and applications without official approval, adding another level to the Shadow IT landscape. Ultimately, Shadow IT is a concern that most companies must address, with a recent report showing that 77% of IT Professionals believe that shadow IT is a major issue.  Managing it effectively is key to organizational success.

Understanding the Appeal of Shadow IT

To effectively manage Shadow IT, it is vital to grasp why it appeals to employees in the first place. Shadow IT often emerges when employees perceive the officially approved tools and processes as cumbersome, slow or inefficient. A recent study from Beezy shows that 58% of employees aren’t satisfied with their company’s technologies. The allure of a more user-friendly tool or a platform offering greater functionality, such as generative AI tools, can be a strong incentive to bypass official channels. As these AI tools become more sophisticated and intuitive, they can seem attractive alternatives to traditional systems, further fueling their appeal.

Understanding the allure of Shadow IT also means acknowledging the resourcefulness of your employees. Faced with challenges or roadblocks, they seek solutions that enable them to do their job effectively. In the era of artificial intelligence, this might mean turning to advanced AI models like Chat GPT to streamline workflows or improve productivity. While this can pose risks when it leads to the use of unauthorized tools, it also indicates a proactive workforce. Recognizing this mindset can help channel innovative thinking toward safer, more compliant solutions.

In some cases, Shadow IT can highlight gaps or inefficiencies in current IT offerings. If a significant number of employees are turning to the same Shadow IT solution, this may indicate that existing tools aren’t fully meeting their needs. Rather than seeing this as a problem, consider it a source of important user feedback. It provides an opportunity to understand how IT offerings could be improved or expanded, thus fostering an environment of continuous improvement. By seeing Shadow IT as not just a risk but also a signal, you can better align IT strategy with employees’ actual needs, turning a potential threat into a tool for improvement.

The Risks

In many cases, Shadow IT may seem benign or, as mentioned above, a potential productivity booster, but it is critical to acknowledge its substantial risks. The most glaring risk is the potential for security breaches. Unsanctioned apps and services frequently do not adhere to the same stringent security protocols as officially approved tools. This discrepancy creates weak points in the security framework, leaving businesses vulnerable to data breaches.

Shadow IT solutions’ lack of stringent security protocols has real-world implications, the most notable being the loss of critical data. Unauthorized platforms may not be backed up properly or incorporated into an organization’s data recovery plan. Companies may suffer damages if these platforms experience a system failure or a cyber-attack, leading to significant setbacks, as lost data could include client information, sensitive employee details or even proprietary business data.

Furthermore, using Shadow IT raises serious compliance issues, especially in heavily regulated industries. Industries like healthcare, finance and education have strict security, privacy and data handling protocols. If employees are using non-approved software or services, it can inadvertently lead to compliance violations. Non-compliance can result in substantial fines, litigation costs or severe reputation damage. Shadow IT, thus, poses risks that extend far beyond immediate IT concerns, potentially impacting a business’ entire operation.

Managing Shadow IT: A Balancing Act

Managing Shadow IT isn’t about allowing a free-for-all or enforcing a strict ban; instead, it’s striking an appropriate balance:

  • Discover Existing Shadow IT– Recognize existing Shadow IT within your organization. Utilize tools designed for this purpose, which can help you detect and catalog unauthorized software and services used by your employees.
  • Assess Risks and Benefits– After identifying Shadow IT, thoroughly assess the associated risks and benefits. Consider conducting a security review for some tools categorized as Shadow IT, as they may benefit your organization’s workflow and could potentially be officially adopted.
  • Formulate Clear IT Policies– Develop and implement a comprehensive policy that governs the use of IT resources within your organization. This policy should outline what is allowed and what isn’t. Once created, ensure these policies are effectively communicated across the organization to maintain clarity and transparency.
  • Educate and Train Your Employees– It’s crucial to ensure all employees know the risks associated with Shadow IT and the importance of adhering to the set IT policies. This is not a one-off effort. Continuously incorporate this process into your regular training schedule to keep pace with changes in policy or technology.
  • Block Questionable Applications– For any apps or services deemed a possible threat, block their usage and require employees to justify potential approval before granting the ability to download or install.
  • Monitor Regularly– Implement a regular monitoring process to check for occurrences of Shadow IT within your organization. This continuous vigilance will help enforce your IT policies and help you stay aware of the use of new tools or applications outside approved channels.

How OneNeck Can Help

When appropriately managed, Shadow IT can spark growth and innovation while simultaneously mitigating risks and potential compliance issues. It’s about striking an equilibrium between security, flexibility and adapting to your employees’ needs.

Navigating the Shadow IT landscape can be challenging, but you don’t have to face this task alone. OneNeck offers services to secure, manage and transform your organization’s apps effectively. By viewing Shadow IT as an opportunity for continuous improvement and strategic advantage, we can help make sure your IT infrastructure is safe, efficient and tailored to your organization’s needs.

Contact us today to bring Shadow IT into the light and turn it from a cause for concern into a pathway toward innovation and growth.

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