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IT management

Shadow IT: How to Understand the Risks and Protect Your Data

May 20, 2020

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There once was a time when the IT department of a company had total control over the technology being used by the organization.

Before an employee could purchase software, or before one clicked download, they needed the blessing of the IT director.

That time is long gone, and no matter how hard your IT department works to stop this from happening, shadow IT is something that every company has to deal with at some point or another.

Shadow IT can include many information technology systems from hardware to software, web services, and cloud applications that employees use across varying departments to accomplish tasks and projects without the authorization of the IT department.

As long as an employee has a credit card, a browser, and a login, anyone can purchase a low-cost subscription license right under the nose of the IT department, and have it up and running in no time.

Doing so can have detrimental repercussions on a business. Not only does it reduce the IT team’s efficiency by introducing products and tools they’re not trained to troubleshoot, but it can also create vulnerabilities and entry points for criminals, and threaten your organization's compliance standing.

And, perhaps most importantly, shadow IT makes it practically impossible for your business to track IT spending and manage SaaS renewals.

Examples of shadow IT

While shadow IT does encompass physical hardware devices like laptops and smartphones, the main source of Shadow IT stems from various software tools.

Some popular software that often becomes part of shadow IT include:

  • Productivity apps: Slack, Asana, Microsoft Office 360
  • Messaging software on corporate devices: Skype, WhatsApp
  • Cloud storage: Google Drive, Dropbox

Security risks and challenges of shadow IT

No matter which industry your business falls in, shadow IT is becoming increasingly popular and easier than ever before. Because of this, it poses serious security risks and challenges for your industry that you need to be made aware of.

Data loss/data breach

If an unapproved software tool runs within a network, there’s always going to be a risk of losing critical data, without the chance of restoring it.

Since many shadow IT applications have features for file sharing, file storage, and collaboration, this can result in sensitive data leaks. Typically, the systems and applications that are running within shadow IT aren’t within the backup strategy put in place by the IT department. Because of this, critical data has a high risk of being lost in a data breach, causing substantial damage within the company.

Inefficient collaboration

For each department to have peak collaboration, everyone needs to be using the same software. Few things are as frustrating as asking a team member in another department to update a Google Doc only to be met with the reply, “We use Pages for document creation.”

This slows down cross-team collaboration and only causes confusion amongst employees.

Bandwidth limitations

While it may seem that software and applications used by employees don’t take up a lot of space, the truth is that bandwidth within your company isn’t infinite.

If a shadow IT application breaks down or crashes, your IT department will lack the knowledge and documentation on how to provide a solution. If a time-sensitive project relies on shadow IT software, the implications can be severe. 

Compliance concerns

No matter the organization, regulatory compliance is critical. There are numerous standards that businesses need to comply with, and the use of shadow IT can potentially lead to fines for violating these compliance requirements.

One of the benefits of syncing with a tool like G2 Track is that it automatically ensures that every app a company uses meets industry standards, so you never have to worry about staying compliant. This happens by tracking Privacy Shield self-certifications, data processing addendums, and complying GDPR statements.

When you double down on software compliance, you can be sure that all tools meet professional and government standards. 

Wasted budget spend 

If various departments within your organization are purchasing duplicate software solutions without IT knowing, this could potentially lead to a significant loss in your business’s budget. 

A state-of-the-art tool like G2 Track can help eliminate as much wasted spend as possible, especially during a financial crisis or recession. When the world’s largest product category database is put to work, your business will be able to clearly see the tools its teams are using and consolidate those they aren’t.

Unused apps will be eliminated and opportunities to reduce spending are identified, which helps to ensure the budget isn’t wasted.

Did you know? Products that don’t have a clear owner, contract, or approval make up between 10-15% of a company’s tech stack.

Redundant apps

When various teams use different software tools from one another, it not only is a waste of money, but it creates redundancy and confusion.

For instance, reimbursing your employees for business-approved purchases becomes difficult when your sales team uses Expensify and your management team uses Zoho Expense. When all departments are using the same approved software, teamwork is simply easier and more streamlined.

Lapsed subscriptions

Every time a new device or application is used without the knowledge of a company’s IT department, the risk for a security gap increases. Because of this, a subscription that has expired only broadens that gap due to the fact that an employee may start using different tools without the knowledge of the IT department.

When using G2 Track, staying up to date on subscriptions is made simple. Since all of your vendor data is easy to see in one single view, a contract will never expire… unless you want it to.

G2 Track allows you to set alerts for contract dates, create a timeline of your contracts and the upcoming costs, and go back in time on contracts for a comprehensive view of everyone you’ve worked with. 

Benefits of shadow IT

Before you become fully convinced that shadow IT is all bad and it needs to be completely prohibited at your company, consider some of the benefits it has to offer.

Increased flexibility

One of the main reasons employees turn to shadow IT is for the added flexibility it provides.

When someone chooses to use an “unapproved” app, it’s most likely because they find it to be more efficient and effective than whichever software solution is approved within the company. When this happens, employees simply take matters into their own hands and find the tools that better meet their needs.

Exploration of new technologies and services

It’s easy for companies to get in the mindset of “this is how we’ve always done it” when it comes to the software they use. When new software tools are implemented by employees, they can sometimes turn out to be more efficient than the standard tools that have been integrated within the company’s infrastructure.

Potential for an increase in productivity and efficiency

More often than not, employees use unapproved applications because they have specific needs that the approved IT solutions just don't cover. When employees can use their preferred tools, these new products can boost productivity and efficiency -- giving your company a competitive edge that it didn't have before. 

Additionally, for many employees, trying to get IT to approve a specific tool or application can be a bottleneck to productivity, especially when they can get their preferred tool up and running in a manner of minutes. 

How to manage and detect shadow IT

Regardless of whether you deem shadow IT as beneficial or harmful to your organization, there are ways to detect the telltale signs that it’s occurring within your business and to manage it before it becomes out of control.

Deploy SaaS management to monitor the network for shadow IT applications

This is easier said than done, especially if your business has hundreds of employees. However, when your IT department utilizes G2 Track, they’ll easily be able to uncover every app and tool that uses employee and company data, as well as flag apps that have yet to be provisioned.  

Ask employees to come forward regarding various programs 

This will create an open-door policy by acknowledging shadow IT is present at your company and urging employees to be open regarding the software programs they’re utilizing. This also promotes employees giving the IT department advice on which programs can assist with new projects that may arise in the future.

When an open door policy is adopted on both sides, the barriers that create traditional roadblocks dissolve. 

Create a list of approved BYOD use

You can’t stop your employees from using their own devices, whether it be their smartphone to check internal communication apps or their home computers to keep up on email.

However, just because you can’t stop it doesn’t mean you can’t provide a list of “bring your own devices” that are approved for use within the company. This way, you can be sure that your employees are using secure devices to access company data.

Prohibit devices that have experienced a “jailbreak”

When a device is “jailbroken” it means that all restrictions imposed on the device have been removed. Jailbreaking allows access to system files that can be manipulated to enable the installation of apps, themes, and extensions that are not supported by the device’s app store.

When this occurs on a device that’s being used to access company data, it opens up this information to a greater risk of being affected by malware that can cause damage to system files. Hackers can also easily install a tracking program to a jailbroken device to steal various files from a user.

Block dangerous applications

It’s always better to put a plan in place to stop something detrimental from happening before it has the chance to occur. A good way for your IT department to get ahead of shadow IT is to create a list of dangerous applications that employees aren’t able to use.

Once the list is created, take the necessary steps to block each tool, which makes it impossible for employees to purchase, download, and use these tools on company devices. This preventative measure can go a long way in the fight against shadow IT.

Create an internal app store of approved tools

Shadow IT can sometimes occur when an employee isn’t sure which software has been given the green light to use. When your company creates an internal app store of software applications that have been approved and evaluated by the IT department, it clears up any confusion as to which apps are safe for employee use. 

Embrace the cloud

If you have employers or business partners who want to leverage the cloud as a part of the business, don't stand in their way. Instead, ensure the IT department makes this easier than ever before. Doing so allows for enhanced cooperation while also giving IT some say into which cloud applications are being used. 

Prioritize the end-user

Many times, the reason why shadow IT occurs is that employees believe that the apps and solutions they’re being asked to use are too difficult or time-consuming. For example, an employee may prefer Microsoft Excel over Google Sheets.

When this occurs, talk to your employees regarding their software preference and see if their preferred tool would be better for your company to invest in for the long term.

Create a company policy for IT approval 

While some may think it’s only new hires who are downloading their favorite software for use, it can also be the well-meaning department head who assumes they don’t need IT approval.

Regardless of who does it, if it’s written as part of your company policy, it ensures that the IT department has more control, in addition to greater visibility into what technology is being purchased.

Don’t live in the shadow

The more that is known about shadow IT, the better your company can prepare for some of the ramifications that come with it.

To be the utmost prepared, and to fully understand which apps are in use and how much is being spent, G2 Track is the go-to solution. The time is now to bring your company’s shadow IT situation into the light and find out how G2 Track can help.

Have you heard the news? You can now take advantage of everything G2 Track has to offer with a 90-day free trial.

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Manage Software Costs

Ensure your business isn’t wasting spend on unused tools and licenses.

Manage your software costs with G2 Track.