Understanding and Managing Shadow IT: A Comprehensive Guide

Think about it—these unapproved tools might not have the same level of cloud security solutions as the ones your IT department carefully chose. This means a higher chance of cybersecurity risks, potentially exposing sensitive data and costing your company time and money to fix. But before you start banning every app that isn't company-issued, let's dig deeper into what shadow IT is, why it happens, and most importantly, how to approach it in a way that keeps your company data safe but doesn't stifle your employees’ productivity. 

What Is Shadow IT?

Shadow IT refers to any technology—from software applications and online services to physical devices—used within your company that is outside the control or even awareness of your IT team.

Examples of shadow IT include:

• Using personal email accounts for work communication.
• Downloading unauthorized software applications.
• Storing company data on personal cloud storage services.
• Connecting personal devices to the company network.
• Utilizing unsanctioned project management tools.

Why Does Shadow IT Happen?

It's easy to label shadow IT as a problem created by employees disregarding the rules, but that isn't always the case. There are legitimate reasons why employees turn to unauthorized tech tools:

• To Boost Productivity: Employees may turn to applications or tools that make their jobs simpler if their company-provided resources are cumbersome, outdated, or difficult to use. 38% of employees admit that slow IT response times drive them toward shadow IT.
• To Embrace New Ways of Working: Remote work has caused a surge in shadow IT. In 2023, 41% of employees used technology outside IT's knowledge. This surge was fueled by a need for remote workers to find quick solutions to collaboration and communication challenges.
• Departmental Needs: A marketing team might find they need a specific social media analytics tool not provided by IT, leading them to seek out their solution.

The Risks Associated with Shadow IT

While those motivations are understandable, it's critical to be aware of the risks associated with shadow IT. The potential consequences of shadow IT can affect your company in several ways:

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Security Nightmares

Think about it this way—every unapproved app or service represents a potential entry point for hackers. Using them means leaving your company's sensitive data vulnerable, with no guarantee of data encryption or secure storage practices. In fact, nearly 1 in 2 cyber attacks come from shadow IT.

A McAfee report found that an average company uses around 108 known cloud services and a staggering 975 unknown services—creating a huge, hidden attack surface.

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‍Compliance Chaos

Do all the applications used within your company comply with data privacy regulations such as GDPR? What about industry-specific requirements like HIPAA for healthcare? Using shadow IT increases the risk of inadvertently violating these regulations.

This can result in significant fines or legal action—a risk no company wants to take. Even Tesla learned this the hard way, facing a potential fine of $3.3 billion due to security issues. Tesla, with its vast resources, is not immune. Imagine the impact on smaller companies with fewer resources.

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‍Data Silos and Lost Productivity

It might sound counterintuitive since employees often turn to shadow IT to boost productivity. However, if data is scattered across various unauthorized platforms, it makes it difficult to collaborate effectively. In a world where collaboration and access to information are critical for agile decision-making, this fragmented approach can hinder productivity. Imagine a scenario where different departments are using incompatible project management tools. The headache of trying to integrate that information is a productivity killer.

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How to Manage Shadow IT

Let’s be real—you’re not going to completely eliminate shadow IT. It’s about finding the right balance between enabling employee flexibility and ensuring your company’s data and systems remain secure.

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‍Promote Open Communication

Create an environment where employees feel comfortable approaching IT with their technology needs and challenges. If they know they won’t be judged or reprimanded for suggesting new tools, it encourages transparency and helps prevent shadow IT from flourishing in secrecy. Instead of implementing strict rules with no room for discussion, encourage employees to engage in open dialogue with the IT team.

Instead of being the department of "no," work on becoming a collaborative partner. If you listen and make a genuine effort to understand their needs, it helps build a more trusting and transparent IT environment.

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‍Offer Training and Education

Ignorance is not bliss when it comes to shadow IT. Empower your employees to make smarter decisions about the tech tools they use. Offer engaging and informative training on cybersecurity best practices. Highlight the risks associated with shadow IT in a way that resonates with their daily tasks, showing them how to spot potential risks. When your team sees the tangible impact on their work, they're more likely to be receptive to change.

A 2012 study by RSA showed that a surprising 35% of employees believed they had to circumvent their company's security protocols to get their work done. It highlights a gap in communication and training. Make cybersecurity awareness a part of your company culture. It’s not about instilling fear; it’s about equipping employees with the knowledge they need to protect themselves and the business.

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‍Embrace the Power of Policy (With a Twist)

Policies aren’t about being restrictive; they’re about providing a framework that balances flexibility with security. Having a clear, easy-to-understand shadow IT policy is essential. However, ensure it goes beyond just listing forbidden apps. Include guidelines for employees to request new tools, along with criteria that IT will use for approval. This way, the policy empowers decision-making without hindering innovation or creating unnecessary roadblocks.

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‍Implement Strong Security Solutions

Invest in comprehensive security solutions that give your IT team visibility into what's happening on your network, including potential shadow IT activities. Swyt developed an applications management section on the Swyt App to offer full visibility of the apps running on company devices at the employee level. This includes a whitelisting and blacklisting feature, allowing the company to approve or block certain applications based on the level of threat. Furthermore, Swyt offers network monitoring and analytics solutions that provide full visibility into logs, login activity (velocity, location), and audit logs.

These features allow IT to have a holistic view of potential risks, making it easier to address them proactively. By using solutions like a Cloud Access Security Broker (CASB), IT can see which unsanctioned cloud services employees are using, identify potential risks, and enforce granular controls.

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‍Continuous Monitoring

Cyber threats evolve constantly. It is crucial to embrace proactive monitoring to identify and mitigate potential vulnerabilities in real-time. Technologies like a Managed Threat Detection and Response (MTDR) solution can help significantly.

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Conclusion

In today’s fast-paced digital world, shadow IT can feel inevitable with so many tech solutions just a click away. However, building a secure yet collaborative work environment is within reach. The key lies in striking the right balance. By fostering a company-wide culture of cybersecurity awareness and leveraging powerful tools like Swyt’s cybersecurity and application monitoring solutions, you can protect your data without sacrificing efficiency or innovation.

Ready to secure your workplace and empower your teams? Get started with Swyt today!