What is Shadow IT? How to Shed Light on It

One of the last things you'd think about when you go on vacation is whether your employer's network will still be intact upon your return. But this is a concern for IT staff: when non-IT users install an unapproved app or service, the potential risks are not under their control. 

They can't ensure security mechanisms are in place, and they can't provide technical support. If Shadow IT goes south, the blame will fall on IT regardless. Whether the use of Shadow IT is intentional or not, it accompanies increased risks of data breaches, theft, potential compliance violations, and remediation costs. 

This article will help you understand the definition of Shadow IT, risks that come with it, and how you can avoid it.

What does Shadow IT mean?

Shadow IT refers to the use of software, services, applications, and devices not formally approved by the IT or security department within an organization. It can encompass hardware, software as well as cloud-based applications. 

Shadow IT can happen for several reasons—from the fact that some employees don't feel like they have any control over their work environment to the fact that some employees just don't know how to get what they need from the system they're using.

But whatever the reason may be, shadow IT has both risks and benefits: risks like data loss, security breaches, attack surface expansion, and benefits like access to more features than what's available through sanctioned technology. We'll dive deeper into risks in the following parts. 

Shadow IT Examples

Examples of Shadow IT include:

• Using productivity or workflow applications like Asana or Trello 
• Using messaging or communication platforms like WhatsApp, Zoom, or similar apps for work-related conversations
• Creating cloud workloads with personal accounts or credentials
• Purchasing SaaS tools or other cloud services without the acknowledgment of the IT team
• Flash drives and HDDs
• Apple AirDrop and other Bluetooth services

While Shadow IT can increase employee productivity, it can also cause serious comebacks with security risks in data leaks, compliance violations, and more.

What is shadow IT in cybersecurity?

If you think about your favorite horror movie, you may guess that shadows are not rays of sunshine and rainbows. In fact, it often resonates with something evil lurking. That's the case with Shadow IT. Unapproved applications or services always pose security threats to organizations. 

Shadow IT can lurk in an organization's IT systems in many ways, but typically it occurs in two ways:

• Using unapproved tools, applications, or services to access, store, or share corporate data: For example, if an organization has approved Google Workspace for file sharing, but an employee chooses to share a corporate file using Dropbox, that employee can introduce Shadow IT into the company.
• Accessing approved tools, applications, or services in an unauthorized manner: For instance, if a company has exclusively approved the use of Google Workspace with a work email, an employee using a personal account to access the company workspace can cause shadow IT. 

Whether intentional or unintentional, Shadow IT may lead to serious security incidents and costs, including data breaches and theft. On top of that, employees adopting Shadow IT, knowingly or not, prevent IT teams from detecting vulnerabilities and minimizing the damage.

Suggested reading: Why Cybersecurity Asset Management Matters

Why do employees use shadow IT?

The most prominent reason employees adopt shadow IT is to work more efficiently. Today's workforce is mostly remote. With the increased number of businesses transforming into remote work, more employees turned towards using Shadow IT.

According to a study, one or more services get exposed on the internet in 91% of devices in remote office networks.

For example, an employee can find a better application to share files than the IT-approved one and start using it without permission. Rapid growth and spread of cloud-based applications have also contributed to the increase in Shadow IT adoption. Gone are the days of the packaged software installed by the IT on employee devices; popular applications like Slack, Figma, and Dropbox are within a click's reach.

To sum it up, there are several reasons why Shadow IT happens:

• Employees don't know how to get access to the software they need.
• The software they want is blocked by security policies or other barriers.
• Employees don't want to use the approved software because it doesn't work well with their devices or processes.
• They just really like using those services better than what their company offers!

What are the risks of Shadow IT?

The primary risk of Shadow IT is that if IT staff isn't aware of a service or application, they can't check if it's secure. IT teams cannot track how services and tools in Shadow IT are used across their company, so they may have no idea how corporate data is being stored, accessed, or shared. Therefore, no matter how easier Shadow IT makes an employee's job, the potential drawback outweighs the convenience. 

Shadow IT causes a lack of visibility and control over sensitive data in addition to the following risks:

• Sensitive data compromise or theft: Threat actors can exploit misconfigurations and vulnerabilities in cloud services and applications. Unapproved tools can bypass an organization's security defenses without the knowledge of an IT department, causing data leaks and other security incidents. And remediation process after an attack can become extremely costly for an organization. 

In fact, an IBM report estimates that the global average total cost of data breaches is $4.35M.

• Unintentional violation of compliance laws: For organizations that need to comply with data protection regulations like GDPR, being unable to track and control how their data is stored or processed may lead to compliance violations and heavy fines.

60% of organizations don't cover Shadow IT in their threat assessment, according to the Forbes and IBM's report. 

How to manage Shadow IT

The best way to avoid Shadow IT risks is to educate users on how Shadow IT affects them and what the risks are. It's also important for IT staff to understand why this happens and how they can work with non-IT users in order to provide an acceptable solution.

Unfortunately, employee training on the risks of Shadow IT can only do so much. There will always be employees using unapproved applications. That's why the best way to prevent Shadow IT is to help your IT team continuously monitor it.

You can't protect what you can't see. Resmo helps you gain visibility across your cyber assets and reduce your cyber asset attack surface.

• Track users and user permissions
• Monitor which apps they use
• Set up notification rules for security violations
• See devices used for access

Ready to unveil the Shadow? Start your free trial.

How to prevent Shadow IT

Apart from monitoring the users in your cloud and SaaS environments, there are several other ways to minimize the adoption of Shadow IT in your organization. These include the following:

• Encourage employees to be open about what software they use.
• Educate them about the potential consequences of Shadow IT.
• Ensure that your IT staff considers the conveniency of tools as well as their security.
• Identify major risks posed by Shadow IT and address them with a proper strategy.

You might also like Best Practices to Follow for Continuous Compliance.

Bottom line

We hope this blog has given you a better idea of what Shadow IT is, why it happens, and how to prevent Shadow IT, if possible. While some forms of Shadow IT can hurt your company's security and cause problems with your policies, successful implementations of Shadow IT can have some benefits for the people using it. 

To put this in perspective, know that a substantial portion of all successful software solutions is products of Shadow IT. Ultimately, you will still need to be able to trust your users. But by being aware of Shadow IT and its risks as well as keeping employees educated on it, you can see it for what it is and take action to prevent it from causing technical problems for your company.

Shadow IT FAQ 

How does Shadow IT work?

Shadow IT increases the risks of data compromise by leaving your IT team unaware and without control. For example, an employee with access to your company Drive file can download and store it on their own cloud storage. This, in return, may lead to a data leak and serious security breaches depending on the compromised data.

What is an example of Shadow IT?

Some common examples of Shadow IT include the non-official use of cloud-based tools like Drive, Google Docs, Gmail, and Dropbox, as well as Bluetooth sharing tools like Apple Airdrop. For instance, a personal email account used to access a company file falls under shadow IT.

Why do people use shadow IT?

People typically use Shadow IT to boost their productivity and efficiency during work. With the growth of SaaS tools, there is a tool for any small task they might have. Since the official approval process of an IT department can take too long, employees turn towards Shadow IT.