Everywhere teams use unsanctioned cloud software without the knowledge of the IT department there are potential negative aspects or even risks to an organization’s compliance that need to be considered. These can range from inefficiencies in collaboration and hidden costs due to a lack of SaaS visibility to more severe issues concerning data protection and IT security.
Without a centralized system of records to keep track of new SaaS licenses, visibility of an organization’s software landscape quickly diminishes. However, proper insights into spend and usage of applications are crucial to identify possible inefficiencies. There could be two teams using the same software but being on individual plans or a team independently subscribing to a tool that the company is already paying for. Other times money is being wasted on active subscriptions no member of the organization is using any longer. If the IT team is not made aware of the inconsistencies caused by Shadow IT, more and more money is wasted as the inefficiencies accumulate. On average organizations are missing out on a savings potential of 20% of their total SaaS spend caused by Shadow IT.
Apart from cost inefficiencies Shadow IT can also become a challenge for communication & collaboration between siloed teams that have implemented different solutions to solve the same task. Let’s take an example where one team is using Google Drive to host their data and manage access permissions, while another team stores its files in Dropbox. Besides the communicative issues and lack of oversight this would cause, data will inevitably get lost on the way with the IT team not being able to restore anything saved on the Shadow IT app due to missing security backups. Teams that rely on shadow IT for business critical tasks can’t expect that an IT team is going to be able to help them.
When Shadow IT undermines certain standards the IT team has come up with in terms of company wide compliance and regulations it will be a security risk in the long run.
This includes sharing sensitive data like passwords or customer information with unapproved apps, that were never audited as to where this data might stored, if it is being shared with 3rd parties or even sold. In a time when companies need to adhere to standard regulations like the GDPR ensuring data privacy is a must. Shadow IT could to lead to companies not passing related audits because of the way their customer data is being stored and processed.
The existence of Shadow IT also makes an organization more vulnerable to potential cyber attacks. Everywhere employees make use of software that is not constantly audited by the IT department they might expose critical systems and data to hackers giving them a larger surface to attack. The risk only increases with the degree to which Shadow IT apps provide access to key assets like APIs or databases. IT Administrators can only monitor software they know about and in case of a breach won’t be aware of the full potential scope of the attack leaving them unsure of what data has been compromised and when.
Even without cybercriminals being after your confidential data, gaps in the security infrastructure will open where IT is not able to revoke software access when employees change jobs. Individual Shadow IT will not be deprovisioned as part of the the official offboarding protocol leaving IT admins with no chance to properly prevent unauthorized access.
In the end Shadow IT inarguably poses a serious risk to confidential data and the general efficiency of processes within a growing organization if it is not identified and treated in the right way. However, it is hard to neglect the fact that giving your employees the freedom to choose and implement tools that make them more productive is a vital part in an organizations ability to act in a lean and flexible way.