Understanding shadow IT: Examples, risks and management strategies

The lines between sanctioned and unsanctioned IT resources can often blur. While IT departments strive to provide robust and secure solutions, employees, in pursuit of efficiency and productivity, sometimes adopt tools and services outside official channels. This phenomenon, known as shadow IT, has become an inevitable reality in modern workplaces.

Far from being inherently malicious, shadow IT often arises from a genuine need to get work done. However, its unsanctioned nature introduces significant risks that can compromise an organization’s security, data integrity, compliance and financial health. This comprehensive guide will explore what shadow IT is, delve into its various examples, highlight its critical risks and outline effective strategies for its management.

What is shadow IT?

Shadow IT refers to any software, hardware or IT resource used within a company that has not been explicitly sanctioned, approved or overseen by the official IT department. It does not imply malicious intent from its users; rather, employees typically adopt shadow IT because they perceive it as a more functional, convenient, or efficient solution for their immediate needs than the resources officially provided by IT. This can range from using personal cloud storage for work documents to deploying unsanctioned collaboration tools or connecting personal devices to the corporate network.

Risks of shadow IT

Because shadow IT operates outside the purview of the IT department, it inherently creates blind spots and vulnerabilities that can pose substantial risks to an organization. The inability of IT teams to monitor and manage these assets puts the entire organization at risk of potential threats. Some of the top risks associated with shadow IT include:

• Loss of visibility and control: IT teams lose crucial visibility into and control over the assets being used. This lack of oversight means they cannot properly secure, update or manage these resources, creating significant security gaps.
• Increased costs: The proliferation of unsanctioned applications and services can lead to redundant software purchases. Different teams might subscribe to similar services, resulting in unnecessary expenditures on tools that serve the same purpose as already provisioned and paid-for software.
• Data insecurity: Sensitive corporate data may be stored, accessed or shared on platforms not monitored or secured by IT. This increases the risk of data breaches, unauthorized access and inconsistencies in data, making it difficult to maintain data integrity and confidentiality.
• Security gaps: Unsanctioned use of devices or data can leave the company vulnerable to cybersecurity attacks. Without proper security configurations, patching and monitoring, shadow IT assets can become easy entry points for malware, ransomware and other cyber threats.
• Compliance issues: Many data privacy regulations (e.g., GDPR, HIPAA) and industry standards require strict control over data handling and IT assets. Shadow IT can lead to violations of these regulations, resulting in hefty fines, legal sanctions and reputational damage.
• Operational inefficiencies: Shadow IT solutions may not integrate properly with the company’s existing IT infrastructure, leading to fragmented workflows, data silos and disruptions to user productivity and overall operational efficiency.

Examples of shadow IT

Shadow IT manifests in various forms, often driven by convenience or perceived necessity. Understanding these common examples is the first step toward effective management:

Devices

Personal devices are a common form of shadow IT. Employees often use their own laptops, smartphones, tablets and even storage devices (like USB drives and external hard drives) to access, store or transmit company data, especially when working remotely. IT departments often find it challenging to discover and monitor these resources with traditional asset management systems. Beyond personal computing devices, other smart devices that may connect to the company’s network, such as fitness trackers, smart TVs, wireless printers and cameras, can also be considered shadow IT if they are not managed or secured by the IT department.

Cloud services and SaaS applications

Cloud services and Software-as-a-Service (SaaS) applications are among the most prevalent forms of shadow IT. These are often adopted by individual employees or departments because they offer immediate solutions to specific problems, are easy to sign up for and require no IT involvement. Users typically utilize these services with local accounts that are not managed by IT, meaning they often bypass corporate security procedures. For instance, they may lack access limitations, multi-factor authentication or proper data encryption, making them dangerous for the network. Examples include:

• Productivity apps: Tools like Trello, Asana or Monday.com are used for project management or task tracking.
• Cloud storage, file-sharing and document-editing applications: Services such as Dropbox, Google Drive, Microsoft OneDrive or Box are used for storing and sharing work-related files.
• Communication apps: Platforms like Skype, Slack, WhatsApp, Zoom, Signal or Telegram are used for internal or external communication.
• Personal email accounts: Using personal email for business communications can also fall under shadow IT, as it bypasses corporate email security and archiving policies.

Local applications

Similarly, local applications installed on individual workstations or departmental servers without IT approval can also be seen as shadow IT. These one-off applications are commonly deployed to manage specific tasks or resources locally, often because an official solution is perceived as too slow, complex or unavailable. While seemingly innocuous, these applications can introduce vulnerabilities, create compatibility issues and complicate software licensing and patching efforts.

Managing shadow IT with Flexera One

Mitigating the risks associated with shadow IT is not a one-size-fits-all solution, but it fundamentally requires visibility and control. Effective strategies become significantly more successful when complemented with robust IT asset management software. Flexera One is designed to help organizations better manage their IT resources for a more seamless, secure and compliant infrastructure. Our platform provides the comprehensive visibility needed to:

• Discover all IT assets: Automatically identify and inventory all software, hardware and cloud assets across your entire IT estate, including those operating in the shadows.
• Gain centralized control: Bring unsanctioned assets under management, allowing IT to assess risks, apply security policies and ensure compliance.
• Optimize software spend: Identify redundant applications and services, helping to eliminate unnecessary costs associated with duplicate shadow IT purchases.
• Enhance security posture: Reduce the attack surface by gaining visibility into and securing all devices and applications connected to your network.
• Ensure compliance: Maintain a clear audit trail of all IT assets and their usage, helping to meet regulatory requirements and avoid penalties.

With Flexera One, you can transform the challenge of shadow IT into an opportunity for improved IT governance, enhanced security and optimized resource utilization.

Solve for shadow IT

Shadow IT is a pervasive challenge in modern enterprises, driven by the rapid pace of technological innovation and employees’ desire for efficiency. While it often arises from good intentions, its unmanaged nature introduces significant risks to an organization’s security, data integrity, compliance and financial health. Effective management of shadow IT is not about outright prohibition, but rather about gaining comprehensive visibility, understanding its drivers and implementing strategies that bring these assets under appropriate governance. By leveraging advanced IT asset management solutions like Flexera One, organizations can proactively identify, assess and mitigate the risks of shadow IT, transforming potential liabilities into managed, productive resources.

Ready to gain control over your shadow IT?

Contact Flexera today to learn how Flexera One can help you discover, manage and secure all your IT assets, both visible and hidden.