Shadow IT: Why It Exists and How to Deal With It

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What Is Shadow IT?

Shadow IT is the use of information technology systems, software, devices, services and applications outside of, or without the explicit approval of, the IT department. With the increasing prevalence of cloud adoption in recent years, shadow IT has grown exponentially given the ease of download and use of cloud-based applications and services.

IT departments are typically unaware of the existence of such applications being used by individual employees or entire business units, hence the term “shadow IT.”

What Is Another Name for Shadow IT? 

Alternatively, shadow IT is also often referred to as rogue IT, feral IT, stealth IT, fake IT, embedded IT or client IT. 

Why Does Shadow IT Exist?

A survey by Stratecast and Frost & Sullivan highlights that 80% of employees say they use applications on the job that aren’t approved by IT.  

As mentioned earlier, the increase in cloud adoption has provided the impetus for the growth of shadow IT in today’s IT environments. Operating from the shadows, these rogue IT applications bridge the gaps left by company-approved applications to ensure that your employees have the right tools they need to perform their jobs as efficiently as possible.  

Nearly 80% of workers admit to using SaaS applications at work without getting approval from the IT department. In general, these shadow solutions are adopted by an employee or a team with the intention to improve the effectiveness of their role and boost productivity. For instance, if an employee discovers a better and more efficient file-sharing solution than the officially permitted one, they might download and start using it as shadow IT.  

What Technology Falls Under Shadow IT?

Shadow IT comprises of all types of IT-related activities as well as purchases that the IT department of a company isn’t involved in. It typically falls under four categories: 

  • Hardware – Laptops, desktops, tablets, smartphones and servers  
  • Software – Off-the-shelf, packaged software solutions
  • Applications – Third-party applications such as productivity tools, collaboration tools, messaging tools and more
  • Services – Cloud services such as infrastructure-as-a-service (IaaS), software-as-a-service (SaaS) and platform-as-a-service (PaaS)  

What Are Some Examples of Shadow IT?

Now that we understand what shadow IT is, let’s take a look at how shadow IT commonly comes into play: 

  • Personal email accounts used by employees to conduct business
  • Third-party SaaS applications not under the control of the IT department being used for business operations
  • Unsanctioned devices that do not come under the auspices of bring your own device (BYOD) policies issued by the IT department 

Is Shadow IT Good or Bad?

Although, in the majority of cases, employees use shadow IT with the intention of improving their task effectiveness, efficiency and productivity, shadow IT still poses a major challenge for businesses to deal with. However, while shadow IT may have a negative connotation, it is worth noting that it does offer some potential benefits as well. Let’s discuss the benefits and drawbacks of shadow IT. 

What Are the Benefits of Shadow IT?

To help you better understand shadow IT, we’ve put together a list of benefits it offers organizations. 

  • Reduced Internal Costs – The BYOD culture means less overheads and costs for IT departments. 
  • Employee Satisfaction – When people feel they have control, they are often happier than when they are forced to use unfamiliar technology. 
  • Individual Productivity – Employees are often more productive using technology they are familiar with. 
  • Potential for Discovery – When employees use an array of tools, there’s a greater likelihood of better tools and technology emerging or being discovered. 

What Are the Risks of Shadow IT? 

Employees may not fully understand that organizations take suitable and necessary measures to ensure safety during the device selection and application approval process. In the absence of adequate vetting of new technologies, shadow IT can prove to be a major cybersecurity hazard for organizations. Some of the downsides of shadow IT include: 

  • Security Gaps and Data Loss – The greater the types of technology being used, the more prone an organization is to security errors or data loss incidents. 
  • Compliance and Regulatory Concerns – The implementation of multiple different applications and solutions leads to tougher audits and a greater chance of the technology not meeting necessary requirements. 
  • Inefficiencies in Collaboration – When employees use different technologies and applications, the fluidity of collaboration is often compromised. 
  • Innovation Barriers – The chances of innovating with a certain technology are reduced if organizations don’t fully embrace it. 
  • Reduced Visibility and Control – Non-sanctioned tech is tougher to follow and monitor. 
  • Wasted Time and Investment – Time spent on implementing technology is wasted and ROI on investment is limited without sufficient buy-in. 
  • Configuration Management – Creating a configuration management database (CMDB) and defining how systems work together gets messier. 

How to Deal With Shadow IT?

While shadow IT is an inherent part of any IT infrastructure, IT admins can take certain measures to not only identify and manage it, but also mitigate the potential risks it poses to the integrity of business-critical data and systems. Here are some useful strategies to effectively deal with the problem of shadow IT: 

  • Monitor your IT environment – One of the best ways to curb the problem of shadow IT is to constantly monitor all on- and off-network devices to help you identify exactly where all the company data resides. Continuous monitoring of the network helps IT admins compare lists in between scans and determine when any new or unknown devices appear on the network.  
  • Maintain an inventory – Apart from monitoring your networks, you must also focus on maintaining an inventory of all known and unknown resources within your IT environment, and regularly update it using a network inventory solution. 
  • Implement regulatory guidelines – To cater to the unique needs of different business units, the IT department can create and share with their employees a list of approved applications/software that they can use apart from the standard issued software. 
  • Restrict usage of third-party applications – Additionally, you might want to restrict user access to certain applications that you don’t want your employees to use. Make sure your employees are well aware of the company policy and that they are not permitted to use any restricted applications for business purposes. 

What Is Shadow IT Discovery?

Shadow IT discovery is the process of using relevant solutions to analyze network traffic for the purpose of identifying any unmanaged and unknown applications that employees might be using. In addition to discovering these applications, the solution should help provide a risk assessment of the discovered applications. The solution should also help identify any data leakage paths that could be a potential gateway for hackers to access your business-critical data. 

What Is a Shadow IT Policy? 

While shadow IT can help promote self-reliance, technological familiarity and user productivity, it can also prove to be a major risk to corporate compliance and data security. As such, companies often put together a shadow IT policy that establishes a set of guidelines for the appropriate use of shadow IT. A shadow IT policy also highlights the restrictions that apply to the usage of unapproved third-party applications and defines the responsibilities of employees and the IT department. 

Combat the Risks of Shadow IT With Kaseya 

Kaseya VSA is constantly improving and will soon feature a module to monitor your Azure and AWS cloud infrastructure to ensure that you are always aware of the known and unknown devices on your network. Additionally, data backup is a very important aspect of ensuring the safety of your business-critical data.

Any business units using unapproved third-party shadow IT applications may inadvertently fail to back up their SaaS data on these apps. Kaseya VSA’s seamless integration with Spanning offers the capability of cloud-to-cloud SaaS backup that will help you back up your data on shadow IT applications as well. 

Want to know more about combating shadow IT? Request a demo of Kaseya VSA now!