Shadow IT definition: Understanding its impact on enterprise security

SaaS Management

Understand the shadow IT definition and its impact on enterprise security. Learn how to manage risks and embrace an enlightened IT mindset for a secure work environment.

What is Shadow IT? | Vendr
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Vendr Team
Published on
May 23, 2023
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Shadow IT is a term used to describe the use of technology, software, and services within an organization without the IT department’s knowledge or approval. This can include cloud storage, messaging apps, and other software that employees adopt to meet their needs without going through formal procurement or approval processes.

While shadow IT can provide some benefits, such as improved productivity and flexibility, it can also introduce significant risks to an organization's security posture.


Defining shadow IT

To fully grasp the concept of shadow IT, it's essential to understand why it exists and how it has become prevalent in today's organizations. Shadow IT is typically born out of the need for employees to find solutions to their business problems without waiting for the IT department's approval or assistance. Often, this is driven by the desire for increased efficiency, collaboration, and innovation.

As workplace tech has become more accessible and user-friendly, employees are more likely to adopt new tools and applications on their own. Cloud-based services, in particular, have played a significant role in the growth of shadow IT, as they often require little to no technical expertise to set up and use. These services can be easily accessed and adopted by employees without the need for IT involvement, resulting in an environment where unapproved and unmanaged applications proliferate.

Some of the places shadow IT can be found include:

  1. Hardware: Unauthorized devices like personal computers, smartphones, tablets, or USB drives that are connected to the corporate network or used to access company data without the knowledge or approval of the IT department.
  2. Software: Unsanctioned applications or tools installed on company-owned devices or used on personal devices to perform work-related tasks. Examples include productivity tools, messaging apps, and file-sharing services.
  3. Cloud services: Unapproved cloud-based applications and services, such as file storage, collaboration tools, or SaaS solutions, that are used by employees without the IT department's knowledge or consent.

The rise of shadow IT can be attributed to various factors, such as the increasing availability of user-friendly applications and services, the growing popularity of remote work and bring-your-own-device (BYOD) policies, and employees' desire for convenience and efficiency. While shadow IT may help employees complete tasks more efficiently and collaborate more effectively, it can also lead to significant security risks and compliance challenges for organizations.


The impact of shadow IT on enterprise security

While shadow IT can offer some advantages, it also presents significant security risks for organizations. These risks can be broadly categorized into three main areas: data security, compliance, and network security.

Data security

One of the most significant risks associated with shadow IT is the potential for data leakage and loss. When employees use unauthorized applications and services to store and share sensitive information, this data is outside the control of the organization's IT department. This lack of oversight makes it difficult to ensure that data is protected and stored securely, increasing the likelihood of unauthorized access, data breaches, and leaks.

Additionally, shadow IT can lead to the proliferation of sensitive data across multiple unsecured locations. As employees use various applications to store and share information, it becomes challenging to track and manage where this data resides. This fragmentation of data storage can make it difficult to implement effective data protection measures and can leave sensitive information exposed to potential threats.


Shadow IT can also introduce compliance risks for organizations, particularly those subject to strict data protection and privacy regulations. When employees use unauthorized applications and services to store and process sensitive information, it can be difficult to ensure that these tools comply with the necessary legal and regulatory requirements.

Organizations may also struggle to demonstrate compliance to auditors and regulators when they can’t provide a complete and accurate inventory of the applications being used to store and process data. This lack of visibility can lead to non-compliance, resulting in potential fines, penalties, and reputational damage.

Network security

Another significant security risk associated with shadow IT is the potential for unauthorized applications to introduce vulnerabilities into the organization's network. When IT departments are unaware of the tools being used by employees, they can’t effectively manage and secure these applications. This lack of oversight can leave the organization exposed to potential attacks, such as malware infections and other cyber threats.

Moreover, the use of shadow IT can strain the organization's network resources and bandwidth, potentially leading to performance issues and increased costs. As employees use unauthorized applications and services, they may be consuming more bandwidth than anticipated, impacting the performance of other critical systems and applications.

Strategies for managing and mitigating shadow IT risks

While it may not be possible to eliminate shadow IT entirely, organizations can take several steps to manage and mitigate its risks effectively. These strategies include increasing visibility, establishing clear policies and guidelines, and fostering a culture of collaboration and communication between IT and business units.

Increase visibility

The first step in managing shadow IT risks is to gain visibility into the applications and services being used across the organization. IT departments can use various tools and techniques to identify and monitor unauthorized applications, including network traffic analysis, log analysis, and cloud access security brokers (CASBs). By gaining insight into the extent of shadow IT within the organization, IT teams can better understand the associated risks and take appropriate action to mitigate them.

Embrace Enlightened IT

A progressive method to address shadow IT challenges is to adopt an "Enlightened IT" mindset. This approach acknowledges that employees may have legitimate reasons for using unauthorized technology resources and aims to strike a balance between the potential benefits and risks associated with shadow IT.

The Enlightened IT mindset consists of the following:

  1. Open dialogue between departments: Encourage transparent communication between the IT department and other teams, allowing employees to discuss their technology preferences and any unsanctioned tools they might be using. This dialogue helps IT teams better understand the underlying reasons for shadow IT and find officially-sanctioned alternatives or integrate preferred tools into the company's approved technology offerings.
  2. Adaptable IT guidelines: Instead of implementing strict policies, Enlightened IT promotes the development of adaptable guidelines that can accommodate employees' evolving requirements and the organization as a whole. This approach could include creating policies that permit the use of certain low-risk, unauthorized tools or establishing a process for employees to request and obtain approval for specific applications and services.
  3. Ongoing training: Offer continuous education programs for employees to help them grasp the potential risks associated with shadow IT and the significance of adhering to the organization's security policies. By informing employees about the potential consequences of using unauthorized technology resources, organizations can encourage more responsible behavior with security in mind.
  4. Regular monitoring and evaluation: Carry out consistent monitoring and evaluation of the organization's technology environment to detect and address instances of shadow IT. This process may involve using specialized tools that can identify unauthorized devices, applications, and services, as well as conducting periodic audits and risk assessments.

By adopting an Enlightened IT mindset, organizations can reap the benefits of shadow IT while minimizing the associated risks. This approach creates a more collaborative and flexible environment that caters to the changing needs of the organization and its workforce, ultimately fostering a more secure and productive work environment.

Protect your organization from the dangers of shadow IT

Shadow IT presents a complex challenge for organizations, as it offers both potential benefits and significant risks. By understanding its impact on enterprise security and implementing strategies to manage and mitigate its risks, organizations can strike a balance between enabling innovation and maintaining a secure and compliant technology environment.

By increasing visibility and considering an Enlightened IT mindset, organizations can effectively address the risks associated with shadow IT and protect their valuable data and network resources.


Vendr Team
Vendr Team
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Vendr's team of SaaS and negotiation experts provide their curated insights into the latest trends in software, tool capabilities, and modern procurement strategies.

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