Weighing Up The Risks & Rewards Of Shadow IT

Shadow IT

These days, it seems like there’s an app for everything that you could possibly need. Want to track your time on projects? There’s an app for that. Want to consolidate your data from a wide range of different sources. There’s an app for it. Want to have AI generate your social media posts, or even generate full articles for your website or blog? There’s an app for those too (though we don’t tend to use them).

The rise in Software as a Service (SaaS) cloud solutions has seen apps popping up for anything and everything. And using them can hugely benefit your business. But when each of your team members starts using their own combination of apps to work in the way that is most productive for them, it introduces a new challenge for your company. That of Shadow IT.

What is Shadow IT?

Think back to the days before remote and hybrid working was commonplace. When everyone was working in one office, your IT team would often strictly regulate which pieces of software and hardware you could use, and for what purpose. The reason behind this is that it made managing upgrades, updates and hardware maintenance significantly easier for the team.

When everyone is working off their own devices, it is a lot more difficult to keep track of who is using which apps, which in turn makes it a lot more difficult to control those apps and ensure that the data being transferred to and from them is secure, and that your business is protected.

This use of multiple apps, software and services by different people outside of your IT department’s knowledge is known as Shadow IT. And while it can pose significant risk to your company if not carefully managed, there are also plenty of ways that it can be a boost to your business success.

How Can Shadow IT Work For Your Business  ?

When managed correctly, Shadow IT doesn’t have to put your business at risk. Instead, it can be a boost to employee morale, to workloads and workflows, and see your employees working smarter, rather than harder. With so many different apps out there that can make your humans lives easier, making shadow IT work for your business can have plenty of positive effects, such as:

  • Increased Productivity

The right apps can help your team members to spend their time better, focusing their minds and organising their days, which in turn will see a huge boost to your productivity. Because everyone works in different ways, and has different focuses during their working day, no single app assigned by your IT department is going to be best suited to everyone, and allowing your team members to choose the apps that work with them will see productivity soaring.

  • Enhanced Efficiency

Productivity and efficiency often go hand in hand, but while productivity means getting more work done, efficiency is all about getting it done as quickly and effectively as possible. You can be productive without being efficient, but when your teams are getting both right, that’s where your business is going to thrive. And shadow IT can help you do just that. There are project management apps and time management apps, apps that gamify the tasks that you need to complete making you feel like every box that is checked is an achievement, and apps that shout at you until you get things done. Whichever app (or apps) sees you and your teams spending your work time in the best way possible is going to be well worthwhile, even if your IT department doesn’t quite get it.

  • Reduced Overheads

Time is money, and apps that help you spend your time more productively and putting it to more efficient use will inevitably help you to get more bang from your buck. On top of that, you can factor in the fact that many apps are free to use for individuals, while charging license fees for multiple users. This means that individuals who find apps that meet their needs will be able to put them to best use, without costing your business a cent.

  • Improved Collaboration 

Each team will have their own unique needs from the apps and cloud services that they use, and these needs aren’t always understood by an IT department. When teams are able to choose the tools that add the most value to them and help them work in smarter (rather than harder) ways, the result is going to be better collaboration between your humans and better work resulting from it.

  • Reduced IT Workload

Between supporting your humans and their devices, putting out fires, and maintaining your network and systems, your IT team has a full workload to juggle. Without having to keep track of, manage, and maintain every app that your teams are using, your IT team will find themselves with more time to focus on furthering your business.

  • Improved Employee Satisfaction

Having the tools on hand to do their jobs and do it well will see your team members feeling more fulfilled in their positions. By showing your teams that you trust them to use and manage the tools that help them with their day-to-day work, you will see your humans becoming happier, proud in what they are achieving, and less likely to leave a job that they love doing.

What Are The Risks Of Shadow IT?

Though there are plenty of benefits for having your teams use their own apps, businesses also can’t ignore the security and management risks that Shadow IT presents:

1. Data Risks

One of the biggest risks that businesses face when their teams are accessing apps that the company has no control over is the security of their data. Data is critical to business operations, and keeping confidential or personal information secure is essential for business success. But with each new app your humans are using, more information is being shared across multiple platforms, increasing the risk to your data exponentially.

The data risks that businesses face from Shadow IT include:

  • Data Management
It’s more important than ever to control who has access to your information, and what they are able to do with it. But keeping track of what data is being stored on which app or cloud service becomes incredibly difficult when your team members are each using their own individual solutions.
  • Compromised Data And Breaches
 Every app has its own vulnerabilities that need to be addressed through updates and patches. But when each team member is responsible for maintaining their own devices, the risk of an attacker taking advantage of a vulnerability is even greater. Most people don’t install updates as soon as they become available, wanting to wait until a more convenient time, and even then often forgetting about them. This puts the data being stored in apps, and even information that is being stored elsewhere, at risk, as cybercriminals can gain access to specific data, login credentials and more, making it far more likely that your data will become compromised or that you’ll experience a data breach.
  • Unauthorised Transfers
Whether it’s your employees themselves transferring data that they shouldn’t, or an attacker who gains access to your systems through an app vulnerability and transfers your data, the result is the same. Unauthorised transfers of data compromise your security, and your reputation if the data ends up being leaked or compromised.
  • Compliance Risks

 There are strict regulations like the GDPR in the EU and the POPI Act in South Africa that govern the way your data can be managed, processed and stored. And the apps that your team members use may not always abide by these laws, particularly if they are based in the US, where these regulations don’t apply. If your business is found to go against these laws for the protection of personal data, the resulting fines can be crippling to a small business.

2. Loss Of Control & Visibility 

While many of the risks that Shadow IT poses are data-related, there are also further risks to your business outside of your data’s protection. The larger your team is and the more apps they use without the knowledge or consent of your IT department, the more difficult it will be to manage your teams effectively.

This is particularly the case for upper management, who may not have a handle on the day-to-day running of each department, but needs to ensure that the business as a whole is operating effectively and efficiently.

It also makes it more difficult for your IT department, whether internal or outsourced, to manage your systems effectively and protect them against a wide range of attacks.

3. System Inefficiencies

Not knowing which cloud solutions your teams are using can make it very difficult to understand where processes can be refined and efficiency can be increased. While Shadow IT can boost efficiency on an individual or single team level, it can reduce the overall efficiency of a business, particularly when it comes to knowing how much capacity is needed for your IT infrastructure to operate effectively, and where resources need to be upgraded.

4. Device & App Management

Every device and app that connects to your network and accesses your data needs to be carefully controlled, maintained and managed. But when your team members are using multiple devices with multiple apps on each of them, many of which your IT department aren’t even aware of, it makes it very difficult for them to make sure updates and patches are installed and that the network and your data are properly protected. The responsibility falls to each of your humans to update their own devices and manage their own apps, which is not always done as quickly or as efficiently as your IT team would like, resulting in weaknesses to your overall IT security.

5. Support Difficulties

When you have a specific set of software and apps being used throughout the company, your IT department can familiarise themselves with the solutions, making it easier for them to offer support to your team members. They can resolve issues quickly and efficiently, because they’ll come to know the systems inside and out. But when your team members are each using different apps, it makes it far more difficult for your IT team to offer support, since each issue that crops up needs to be researched and investigated before it can be resolved. Instead of freeing up time for your IT team, it can slow them down substantially if your Shadow IT isn’t managed effectively.

6. Goal Misalignment

It can be a wonderful feeling to be in control of your own workflow – to choose the apps that help you to be more productive and work more efficiently. But when every team member is choosing their own apps and cloud platforms, it can also be easy for an individual’s goals to veer away from the company’s overall goals. It can be all too easy for team members to go off on a tangent, finding apps that help them to reach their own personal work goals, but taking time away from the goals of your company as a whole.

How Can You Balance The Risks Against The Reward?

Business is all about risk management, and ignoring Shadow IT entirely because of its potential risks would also mean ignoring the benefits that it can offer to your company. This is why it’s important to weigh up the risks and rewards, and if you are considering embracing Shadow IT, consider putting a policy in place to effectively manage the apps and cloud solutions that your teams are using. This way you can minimise the risk, while maximising the benefits to your business.

An effective Shadow IT policy should include:

  •  Thorough Training For Your Teams

This is the number one method of protecting your business from Shadow IT risks. By making sure that your humans understand the risks that they are taking by using apps that your IT department isn’t aware of, they can be better prepared for managing those apps themselves. Make sure that you stress the importance of regularly installing updates and patches, reading terms and conditions, and checking the permissions that an app is asking for rather than just clicking accept, for example. If every one of your team members understands the risk of sharing data across a wide range of apps, this can see each of your team members adding to your security, rather than adding to your risk.

  • Using A Cloud Access Security Broker

Keeping track of every app that your teams are using can be a difficult process to manage. But using a Cloud Access Security Broker (CASB) can help your business to detect apps that are being accessed through your network, and better manage their use.

We look at 4 reasons why your business needs a CASB in this blog.

  • Focusing On Transparency

By ensuring that your team members know that they are not going to be reprimanded for using Shadow IT apps and unsanctioned cloud services, they are more likely to come forward and let you know which apps and services they find useful in their daily lives. This will not only help your IT team in understanding the apps that are being used, but may also help other team members to adopt the services as well, resulting in further boosts to production and efficiency.

On top of transparency from those who are using the apps, if there is transparency in your business from the top down, you can provide your team members with a better understanding of why Shadow IT is discouraged (if it is), and the risk that it poses to your operations.

  • Ensuring Data Protection

While Shadow IT apps do pose a threat to data security, there are ways that you can minimise that threat and ensure your data’s protection.

Solutions like a Cloud Access Security Broker will help you to put policies in place for transferring data to and from cloud services, and can encrypt information while it’s being transferred, which reduces the risk of data being intercepted while it is going from an authorised app to a Shadow IT one. Ensuring that you have backups available for your data will also help to protect it from corruption and minimise the potential impact that a data breach could cause.

  • Managing Access Permissions

When dealing with sensitive or confidential information, it’s important that the right people, and only the right people, have access to it. If you’re concerned that your teams may be transferring confidential information outside of your business, then you need to look more carefully at the permissions and access that you have provided. Part of remaining compliant with regulations like GDPR and POPIA is ensuring that personal data is only available to those employees who need access to it. Putting stricter permissions in place for who can access, view, edit and transfer information will see your business protecting itself more thoroughly, while still allowing for your humans to use the apps that they need without compromising your data.

How Can Solid Systems Help?

I’ve been talking a lot about IT teams in this blog, but not every business has their own internal IT team to manage their networks, systems and cloud services. This is why SMEs turn to Managed IT Services Providers like Solid Systems. Businesses need a team of IT professionals that they can trust to have their best interests at heart, to protect their companies from cyberthreats, and to help them make the most of the technology solutions that they put in place.

At Solid Systems, we’re all about helping your teams to work more productively and efficiently, and putting solutions in place that will see your company growing and ultimately making more money. We also understand the importance of adoption when it comes to the cloud services and apps that you implement, and provide training to ensure that your humans are adding as much value to your business as possible.

When it comes to Shadow IT, Solid Systems is here to keep your data protected and your business safe. If you’re interested in learning more about the impact that Shadow IT can have for your company, both in terms of the rewards and risks that it presents, book a consult with us today.

Frequently Asked Questions (FAQs)

How can an organisation identify and prevent the use of Shadow IT in the cloud?

Shadow IT is difficult to prevent altogether, but with the right policies and tools in place, you can manage the apps that your teams are using. Cloud Access Security Brokers are a useful tool for detecting cloud services that your humans are using, even if they haven’t been approved by your IT department. It also allows you to restrict access to those apps if they pose a threat to your business’ IT security.

What are some best practices for managing and securing shadow IT in the cloud?

Effectively managing the apps that your team members are using through a Shadow IT policy will help you to take advantage of the benefits shadow IT offers to businesses, while still protecting against the risks involved. An effective Shadow IT policy will include:

  • Thorough training for your teams
  • Using a Cloud Access Security Broker
  • Focusing on transparency
  • Ensuring data protection
  • Managing access permissions
How can an organisation effectively communicate the risks associated with shadow IT to employees and encourage them to use approved IT solutions?

Focusing on transparency and training your humans in IT security are two effective ways of making sure that they understand the risk involved in using apps outside of your IT department’s knowledge.

Transparency from the top down will see them understanding why shadow IT poses such a risk, and help them to minimise that risk to your business. If there is a policy of transparency within your business, and an understanding that using shadow IT apps won’t result in a reprimand, your teams are more likely to come forward and provide details about the tools that they are using and why they need them, providing you with the opportunity to integrate them into your tech stack.

Training will provide your teams with insight into how they can protect your business by being careful about the apps that they use, checking the permissions that apps require, reading the fine print when it comes to accepting terms and conditions, and effectively managing their own updates.

Why do people use shadow IT?

Shadow IT can have benefits for both individuals and businesses when it’s managed correctly. For individuals, it can help to streamline their workflows without the red tape of needing to get an app approved by the IT department, helping them to work smarter rather than harder. This boost to productivity can in turn benefit your company, lower costs, give your IT department more time to focus on other areas of your business, and more.

Benefits of Shadow IT include:

  • Increased productivity
  • Enhanced efficiency
  • Reduced overheads
  • Improved collaboration
  • Reduced IT workload
  • Improved employee satisfaction
Daniel Avinir

Daniel Avinir

Head of Client Success at Solid Systems | Virtual CIO I have a love and passion for people, their minds, technology, and nature.I believe in empowering people to work in increasingly flexible and productive ways, helping them unlock the collaboration potential and leading the cultural & technological change of our time.

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