In every industry, employees often use software and applications that aren’t necessarily provisioned or approved by their IT department. Whether it’s tools to streamline communication or improve their day-to-day efficiency, employees are taking matters into their own hands to find tools and applications independently without corporate oversight. This practice is known as Shadow IT. With the growth of cloud-based applications and remote work, Shadow IT has become more widespread.
At first glance, Shadow IT may not seem like such a big issue. Isn’t it a good thing for employees to find more effective and efficient ways to complete their tasks? While it’s admirable in nature, it could lead to disastrous outcomes. The issue comes from the security gaps that may emerge with the use of tools that IT teams aren’t aware of. Without IT oversight, confidential data may be left in unprotected locations, or accounts could become vulnerable to unauthorized access as the proper protocols aren’t being followed. Worse yet, Trojan horses can be introduced to the corporate network. Even if done innocuously, sensitive information being shared outside of the approved networks could be a compliance violation in addition to security risks.
For most organizations, Shadow IT presents a daunting challenge. On the one hand, ignoring it completely brings the risk of data breaches, increased risk, and compliance concerns. But on the other hand, overly regulating employee access can slow down productivity and frustrate them, lowering employee engagement. Finding the balance between the two is key. This article will go into how unmanaged access affects security, outline practical steps to detect Shadow IT, and discuss ways to control it without disrupting workflow.
Also read: Traditional Security Fails to Protect SAP
How does Shadow IT impact your business?
For most companies, Shadow IT isn’t just a one-off issue, it’s a constant challenge. With tools and apps operating outside of established security protocols without regulation and corporate oversight, there are significant security risks (explored in more detail in the next section).
Though it goes against the whole reason why employees do it, Shadow IT can also cause operational inefficiencies. Different teams may use separate tools for the same purpose, causing data silos and miscommunication. IT teams would also struggle to provide support for applications they didn’t approve or are unfamiliar with.
What are the security risks of Shadow IT?
Shadow IT often introduces major blind spots and concerns for IT security teams. Employees may create accounts on third-party tools using weak or reused passwords. These credentials can be compromised in data breaches. On top of this, as these tools are unregulated, things such as multi-factor authentication (MFA) may not be implemented. Without it, a single stolen password could be enough for attackers to steal sensitive data and potentially give bad actors access to corporate systems.
Access control
These unauthorized apps are likely to not adhere to an organization’s access control policies. With many tools having invite/sharing capabilities, individuals like colleagues or external partners may end up having more permissions than they should as there are no restrictions preventing them from doing so. A former employee or an external vendor could even have access to company data long after they should. Without centralized IT oversight, it becomes harder to track and revoke these permissions when needed.
Data security
Another main risk associated with Shadow IT is data security. Employees may keep company information in personal or public cloud storage accounts. They may even grant too many permissions to third-party services or individuals not authorized to access the data. Even if this is done without ill intention, if just one of these applications becomes compromised, sensitive business information could be exposed—and the company wouldn’t even know.
Compliance
Compliance is also an issue. Many industries such as healthcare and finance have strict data protection regulations, such as GDPR, HIPAA, or SOX. If unapproved tools are used to handle confidential customer or financial data, there could be legal and financial repercussions. Without proper documentation and access control, proving compliance during audits also becomes difficult.
Internal threats
Shadow IT doesn’t just create external threats—it also increases the possibility of accidental data leaks within an organization. Employees may accidentally share confidential information by using non-secure file-sharing services or misconfiguring access settings. Worse yet, employees may download applications and services with inherent vulnerabilities or malicious code that could siphon data move laterally across servers.
How can businesses detect and control unmanaged access?
Managing Shadow IT starts with identifying where it exists. Most businesses are unaware of how many of these tools and applications their employees are using. Organizations need a structured approach that combines visibility, access management, and policy enforcement.
Follow the money
Regular audits of corporate credit cards and expense reimbursements are essential to detect applications and services that are procured as a one-time or ongoing expense.
Cloud security tools
One of the most effective ways to detect Shadow IT is through cloud security tools. Cloud Access Security Brokers (CASBs) can support IT teams in analyzing network traffic and identifying suspicious activity. These activities could be file transfers to unapproved cloud storage platforms or unusual login attempts from different locations.
IAM solutions
Identity and access management (IAM) solutions can also help improve an organization’s security. Things such as role-based access control and MFA can add a layer of protection, reducing the risk of unauthorized access. Single Sign-On (SSO) solutions are also another option. Not only do they streamline the login process for employees, but they also help IT have better oversight of approved applications.
Audits
Frequent audits also help businesses regulate Shadow IT. IT departments should regularly conduct audits to ensure that their access logs and applications list are in order. Over time, the number of unauthorized applications being used will only grow. So, it’s important to make sure that this is monitored closely, and that appropriate action is taken as soon as possible.
Policies
Policies also need to be clear and enforceable. Employees should understand the risks of using unauthorized applications and be encouraged to request IT-approved alternatives. Training sessions can also help reinforce best practices.
Even if Shadow IT can’t be entirely eliminated, businesses can greatly reduce its risks by improving visibility, strengthening access controls, and enabling better communication between IT and employees.
Also Read: CIO Influence Interview with Jason Merrick, Senior VP of Product at Tenable
IT security vs. productivity
While security measures can prevent employees from using these unapproved tools and apps, they can also have the negative effect of impacting productivity if not implemented carefully. There’s a range of reasons as to why employees may use unauthorized tools. It could be because they find the approved ones difficult to use, or perhaps they found other tools that had more features and capabilities. Instead of just focusing on how to get rid of all the unauthorized tools, organizations should also consider how the business’ security can be balanced with the employee’s productivity.
One way is to give employees alternate tools and applications that meet their needs. If a specific app is commonly used, for example, it may be worth evaluating whether it should be formally integrated into the organization’s operations. If it meets security and compliance standards, adopting the application may be a better solution than banning it.
This process can also be done from the employee side by creating/improving the approval workflow. Employees often sidestep IT policies as they are tedious and time-consuming, e.g. getting a new tool approved for use may take too long or require too many forms. Streamlining this process can help reduce employee frustration and improve compliance.
Security policies should be flexible enough to allow for positive adjustments while still protecting sensitive data. Instead of reacting to Shadow IT with strict bans, organizations should focus on understanding why employees turn to these tools and address those needs with secure, IT-approved solutions.
How can enterprises control Shadow IT and identity risks?
It’s clear that Shadow IT brings security risks, but eliminating it entirely isn’t realistic or feasible. Instead of focusing solely on restrictions, a more proactive approach should be taken by improving visibility, strengthening access controls, and providing employees with secure alternatives.
Organizations that approach Shadow IT with flexibility rather than strict enforcement will see better results. By understanding employee needs and addressing them with secure solutions, businesses can maintain security without limiting productivity.
Managing Shadow IT is an ongoing process, but with the right strategy, companies can reduce risks while keeping operations efficient and secure.
