Cyber criminals are becoming more prevalent and sophisticated each year, targeting businesses across all industries and causing severe financial damage. But what if the threat isn't from external attackers? What if it's from your own team through seemingly harmless or routine business activities? This is the hidden danger of shadow IT.
In this blog, we’ll explore what shadow IT is, how it can affect organizations, and ways to mitigate potential risks. By following the guidelines in this blog, businesses can better secure their IT systems and ensure compliance with industry standards.
What is Shadow IT?
Shadow IT refers to the use of IT systems, software, applications, IT services, or devices without permission from the organization. Employees may engage in shadow IT for a number of reasons. For example, if employees find their approved technology resources to be slow, inadequate, or difficult to use, they may look to other applications or software to carry out their work duties.
Let’s explore a scenario where an organization’s marketing manager engages in shadow IT. Her organization has set up a file-sharing system for her team to collaborate and access files. However, she finds this system to be confusing and slow when uploading large files. To improve her workflow and collaborate more efficiently, she creates a Dropbox account and invites her team members without the organization’s approval.
As another example, let’s look at a staff member who works in a medical practice and dislikes his workplace laptop. Without permission, he decides to bring in his personal iPad and log in to his company’s electronic health records system. From this device, he accesses patients’ private health information, enters CPT codes for the billing department, and sends emails to patients and other staff members.
Risks of Shadow IT
While shadow IT may seem harmless, it can introduce a range of vulnerabilities that put businesses at risk. In the following sections, we’ll explore the most common shadow IT risks that businesses should be aware of.
Security Breaches
Companies often choose specific devices, software platforms, applications, and tools that have the latest security features and provide ongoing IT support. While not all IT solutions used without permission are harmful, others may have vulnerabilities that can make organizations more prone to security breaches and unauthorized access. If employees want to use a tool or software platform different from what is approved, it's important for them to speak with their IT manager and make sure it's safe for use.
Data Loss
Data is critical for today’s businesses to carry out daily operations, make informed decisions, improve customer service, and identify areas for growth. When data is lost, organizations may face operational downtime, legal fines, and loss of customer trust. To prevent this, organizations must use IT solutions that have backup and recovery features, data security measures, and strict access controls. If your employees are not using devices or software platforms with these features, you risk losing sensitive information that is critical to your business.
Compliance Issues
Many of today’s organizations must adhere to strict compliance regulations and industry standards to protect sensitive data. However, when employees use devices or software programs without permission, they open businesses up to compliance violations. For example, certain software programs that are not approved may not use encryption or the latest security features to safeguard data. Using personal devices from home that have not been updated or lack strong passcodes can also make it easier for online criminals to gain access. Unaddressed, compliance issues from shadow IT can lead to costly fines, legal fees, and compensation to customers who are affected.
Inefficiency
Using devices and applications that are not approved can lead to data and important files being stored across multiple platforms. While this may seem harmless, it can cause major inefficiencies. For example, team members may be confused about where to find or store information. Also, if the organization is unaware of where the data is, IT departments cannot effectively plan for capacity, system architecture, security, and performance. Analysis and reporting can also become skewed.
Lack of Visibility and Control
You can’t control what you’re unaware of. If employees are using devices and applications without their company’s knowledge, IT managers can’t perform regular updates, install security measures, and monitor these systems for online threats. This lack of visibility can make these devices, software systems, and services more vulnerable to unauthorized access, security breaches, cyber vandalism, and a number of other online threats.
Increased Costs
Shadow IT doesn’t just put an organization’s data at risk; it can lead to hidden expenses. According to Gartner, shadow IT accounts for roughly 30-40% of IT spending in large companies. One common scenario is when employees choose applications and software that are initially free but later transition into subscriptions. These can create ongoing expenses for the organization if not caught early. In addition, approved services, software, and devices that are not used by employees can sit idle and waste the organization's money over time.
Reputational Damage
Your customers count on you to provide a seamless experience and keep their private information safe. When their data is compromised due to employees not following instructions and using unauthorized tools, it shows your company is irresponsible and lacks control over its workforce. Facing compliance violations and lawsuits from compromised data can also damage your organization’s reputation. Unfortunately, repairing your reputation can be time-consuming and costly, often requiring significant resources and effort to regain customer trust and restore your brand's integrity.
Ways to Mitigate Shadow IT
Now that we’ve covered what shadow IT is and how it can affect your business, let’s explore some ways to mitigate these risks and maintain control over your technology ecosystem. By following the strategies in the following sections, businesses can effectively manage shadow IT and safeguard their data and systems.
Regular Audits
The first step in addressing shadow IT is to perform regular audits. These audits should take place annually or semiannually and evaluate an organization’s IT infrastructure and software usage to identify unauthorized programs, devices, or noncompliance with IT policies. Talk with staff members, department heads, and IT administrators to gather insights into usage patterns, workflow requirements, and potential gaps in IT governance.
Create a Clear IT Policy
After you have taken stock of your organization's IT infrastructure and identified weaknesses during your audit, create an IT policy that clearly defines what technology can be used, what activities are prohibited, and procedures for requesting new software, services, and devices. Make sure you regularly review and update your IT policy to evolve with changing business needs, compliance requirements, and advancements in technology.
Strict Access Controls
Access controls dictate which individuals or devices can access and interact with company resources. Strict access controls help mitigate security risks and ensure compliance with IT policies. To prevent risks associated with shadow IT, organizations should ensure that only approved devices and programs can connect to the network. This allows for better monitoring of network activity and reduces the risks of unauthorized data access and breaches.
Employee Training
Do your employees know your IT policy? Chances are, they may not even know what shadow IT is or that it can open their business up to risks. Employee training can bridge this knowledge gap and reduce the likelihood of security threats. In your next training, educate your employees on your IT policy, explain which devices or software programs are prohibited, educate them on possible risks, and emphasize the importance of sticking to approved IT solutions. Hold employee training sessions regularly to update staff on any changes.
Offer Employees Better Tools
One of the main reasons shadow IT occurs is due to frustrated employees seeking better alternatives. Talk to your employees about their workflow and pinpoint areas that need improvement. Are there applications or devices that are slow or make it difficult for staff to complete their job? If so, research other options in the market. Look for platforms that are easy to learn, have user-friendly interfaces, are scalable to change with your evolving needs, have customizable features, and, most importantly, provide strong security features.
Conclusion
Shadow IT can open organizations up to a number of risks, including data breaches, compliance violations, and inefficiencies. Fortunately, these risks can be mitigated with proper awareness and management. By following the strategies outlined in this blog, businesses can better protect their data and maintain compliance with IT policies.
Working with a reputable managed service provider can also help organizations manage shadow IT and reduce the risks associated with it. At Prescient Solutions, we take a comprehensive approach to IT. From networking monitoring and regular audits to IT planning and employee training, we provide the guidance and tools to keep your business safe and thriving in today’s competitive marketplace.
Contact us today to learn more about our IT services!
