Shadow IT: Major Data Security Risk or Overhyped Threat?

What is Shadow IT?

Shadow IT refers to information technology systems and solutions built and used inside organizations without explicit approval from the IT department. It involves employees using unauthorized apps, software, and devices to access company data and systems outside the purview of the IT department.

Some examples of shadow IT include:

• Employees using unauthorized collaboration apps like Slack or Dropbox to share company files
• Departments deploying software-as-a-service apps without IT approval
• Individuals using unauthorized devices like personal laptops and smartphones to access company networks

The term “shadow IT” stems from the fact that these technologies operate in the shadows outside the control and visibility of the IT department.

The Rise of Shadow IT

Several factors have contributed to the rise of shadow IT in organizations:

• Increasingly tech-savvy workforce – Employees are more knowledgeable about technologies and apps and can easily procure them.

• Consumerization of IT – The proliferation of user-friendly collaboration, cloud and mobile apps has enabled shadow IT.

• Faster procurement – Cloud apps can be easily procured without long procurement and approval processes.

• Frustration with IT – Lengthy IT approval processes and perceived lack of innovation prompts business units to implement rogue IT solutions.

• Remote/mobile workforce – Remote workers rely on unauthorized tools to collaborate and access data.

• Business agility – Business units turn to shadow IT to rapidly meet evolving business needs.

Potential Benefits of Shadow IT

While shadow IT is seen as a risk, some practitioners argue it can also provide certain benefits:

• Business agility – Faster deployment of new IT solutions unhindered by bureaucratic IT processes.

• Innovation – Allows exploration of new technologies and solutions to address evolving business challenges.

• Cost savings – Less expensive options compared to solutions offered by the IT department.

• Productivity – Access to user-friendly apps and collaboration tools improves productivity.

• Competitive advantage – Early adoption of emerging technologies without waiting for IT approval.

Risks and Challenges of Shadow IT

However, the disadvantages and risks posed by uncontrolled shadow IT are considerable:

• Security risks – Increased vulnerability with data accessed from unapproved apps and devices.

• Compliance issues – Violations of regulations around data security and privacy.

• Visible attack surface – Rogue apps and devices represent new entry points for cyberattacks.

• Data silos – Information fragmentation when employees use separate unauthorized systems.

• IT governance failure – Lack of oversight into IT environment due to proliferation of unsanctioned apps and tools.

• Cost overruns – Unbudgeted costs from shadow IT reducing IT’s bargaining power.

• Support issues – No IT support for employees using unauthorized technologies.

• Vendor lock-in – Lack of integration and inability to switch tools if required.

Is Shadow IT Overhyped? Differing Perspectives

There are differing viewpoints on whether the risks of shadow IT are overblown:

IT professionals tend to see uncontrolled shadow IT as a major threat:

• IT loses visibility and control over data, systems and budgets.
• Expanded digital attack surfaces could lead to breaches.
• Non-compliance with regulations around security and privacy.

Business managers often downplay the risks:

• Many shadow IT apps have enterprise-grade security.
• The benefits of agility and productivity outweigh the risks.
• IT depts are slow; shadow IT enables innovation and agility.

The reality lies somewhere in between:

• Shadow IT carries undeniable risks around security, compliance and costs.
• An outright ban on shadow IT is next to impossible today.
• The answer lies in IT shifting from playing defense to offense.

How Should Organizations Address Shadow IT?

Here are some recommended strategies and best practices for organizations to manage shadow IT:

• Identify shadow IT – The first step is to gain visibility into shadow IT apps and devices used by employees.

• Strengthen security – Implement solutions like data loss prevention and multi-factor authentication to secure company data.

• Review shadow apps – Instead of outright banning apps, review them for security, compliance, and integration.

• Embrace innovation – Encourage innovation but require some oversight and risk vs. return analysis for new solutions.

• Revamp IT processes – Streamline IT request-and-approval processes to offer agile solutions.

• Foster collaboration – Work together with business units as partners rather than barriers.

• Leverage the cloud – The cloud offers many easy-to-use, yet secure options to address needs met by shadow IT solutions.

• Build a shadow IT policy – Create clear policies and guidelines for employees around provisioning of new IT solutions.

Conclusion

Shadow IT provides undeniable benefits around agility and innovation but also poses significant security, compliance and governance risks. Organizations can strike the right balance by taking a pragmatic approach – neither banning shadow IT outright nor ignoring its risks. The optimal approach is to identify shadow IT, strengthen security, streamline IT processes, leverage secure cloud options, and build a collaborate relationship with business units.