What Is Shadow IT? Examples & Risks Explained

Ever feel like your company’s tech is stuck in the slow lane? We’ve all been there. Cumbersome software, outdated systems – it can be a real drag on productivity. This frustration can sometimes lead to employees taking matters into their own hands, using unauthorized apps, devices, or cloud services. That’s shadow IT, and it’s a growing concern for business leaders like you.

Sure, shadow IT can seem like a shortcut to getting things done faster. But here’s the catch: those unauthorized tools can create serious security headaches, data leaks, and compliance nightmares.

The key question becomes: how do you empower your teams with the right tools, without compromising security? In this article, we’ll explore real-world examples of shadow IT, understand why it happens and the potential risks involved, and most importantly, offer solutions to help you navigate this balancing act.

Understanding the Risks of Shadow IT

Shadow IT might seem like a harmless productivity shortcut, but it can pose a significant threat to your organization’s security. Here’s why:

1. Security Vulnerabilities

Unsanctioned applications and tools often lack the robust security features built into IT-approved solutions. This exposes your company data to malware attacks, data breaches, and unauthorized access, putting your sensitive information at risk.

2. Compliance Issues

Shadow IT can lead to non-compliance with industry regulations and data privacy laws, especially for highly regulated sectors like financial services and healthcare. These regulations often have strict data security requirements, and using unauthorized tools can leave you vulnerable to hefty fines and reputational damage.

3. Data Loss

Unsecured applications create a pathway for sensitive information to leak accidentally or intentionally. This could happen through data breaches or even employee negligence, leading to a loss of control over your valuable data.

4. Wasted Resources

Shadow IT can lead to duplicate subscriptions and wasted licensing costs. Employees might unknowingly subscribe to services that your company already pays for through approved channels, leading to unnecessary expenses.

5. Integration Challenges

Integrating disparate shadow IT applications with existing systems can be complex and expensive. This can create compatibility issues, hinder data flow, and disrupt your overall IT infrastructure.

Shadow IT Examples & Potential Impact

Cloud Storage & File Sharing:

• Using personal Dropbox or Google Drive accounts to store & share work files: This bypasses company-approved secure cloud storage solutions and creates data leakage risks.
• Sharing sensitive documents via public file-sharing platforms: This exposes confidential information, removes control over access permissions, and could violate industry data privacy regulations.

Unvetted Productivity Apps:

• Downloading free project management tools without IT approval: These tools might have vulnerabilities or limited functionality compared to approved solutions.
• Using personal scheduling apps for work meetings: This creates scheduling conflicts and disrupts team communication.
• Using “freemium” software with limited security features: Employees might use free versions of popular software for work purposes, unaware of potential security limitations or missing functionalities compared to approved solutions.
• Using unauthorized large language models (LLMs): This includes using free LLM services like ChatGPT or integrating any LLM with unauthorized software/hardware. These free services or unauthorized tools might have limited security features or data privacy controls, leading to potential data breaches, unauthorized access to sensitive information processed by the LLM, compatibility problems, and disrupted data flow.

Hardware Shadow IT:

• Using personal laptops or tablets for work tasks: This raises security concerns if these devices are not secured with company data encryption or haven’t received essential security patches.
• Connecting unauthorized external storage devices: This includes personal USB flash drives, external hard disk drives (HDDs), solid-state drives (SSDs), or any portable storage device used to store or transfer work data. These devices pose malware and data exfiltration risks if not properly scanned and monitored. They may also lack encryption or other security features present on approved company storage solutions.

Communication & Collaboration Tools:

• Relying on personal email accounts for work communication: This hinders centralized communication channels, makes it difficult to track or archive important emails, and can lead to missed communication or hinder crisis response efforts.
• Using unauthorized chat apps like WhatsApp or Telegram for business discussions: These platforms might lack security features, data residency compliance needed for your industry, and can create silos of information.
• Utilizing social media for internal communication: While some social media platforms offer collaboration features, they might not be suitable for sensitive work discussions due to privacy concerns and lack of control over information dissemination.

Control Shadow IT with MSSP Support

Whether you’re big or small, shadow IT is a complex challenge that your organization doesn’t have to tackle alone. Managed service providers (MSPs) and managed security service providers (MSSPs) can be valuable allies in your quest for a secure and productive IT environment. Here’s how:

• Visibility & Control: MSPs can help you gain visibility into your IT environment, including unauthorized devices and software. This can be achieved through data discovery audits and managed detection and response (MDR) solutions.
• Security Expertise: MSSPs offer a wealth of security expertise. They can conduct security assessments to identify vulnerabilities introduced by unauthorized tech tools and implement robust security measures to protect your data across all devices and applications.
• User-Friendly Solutions: MSPs understand the importance of user experience. They can help you implement secure, user-friendly alternatives to shadow IT applications. This reduces the appeal of unauthorized tools and encourages employee adoption of approved solutions.
• Education & Training: Both MSPs and MSSPs can provide educational resources and training programs to raise employee awareness about the risks of shadow IT and promote responsible technology use.
• Streamlined IT Management: MSPs can manage routine IT tasks like patching, updates, and user support, freeing up your internal IT team to focus on strategic initiatives and integrating secure solutions that address employee needs.