Introduction
In today’s rapidly evolving digital landscape, employees are becoming increasingly tech-savvy (or at least they think that they are). Some attempt to turn to unauthorized tools, devices, and applications to get their work done more efficiently.
Taking away authentication, for example, may certainly increase productivity in the short-term, but organisations use this for good reasons (including legal ones!) Employee use of authorised software may have similar implications. Shadow IT (as it is called) refers to the use of IT systems, devices, software, or services without explicit organizational approval. Any well-run organisation will only allow authorised software on its systems.
The short-term benefits for employees and their organisation should be weighed up against the dangers it poses to business security. It could easily lead to data breaches, loss of control, and regulatory non-compliance. In this post, we’ll explore the risks of Shadow IT, why businesses should be concerned, and how they can implement effective management strategies to mitigate its impact.

What is Shadow IT?
When employees or departments use technology solutions outside the organization’s official IT infrastructure, most likely contrary to IT policy. Examples:
· Unauthorized cloud storage (e.g., Dropbox, Google Drive)
· Unapproved software (e.g., project management tools, communication apps)
· Personal devices (e.g., smartphones, laptops, tablets) connected to the corporate network
· Third-party applications (e.g., apps used to share documents or collaborate)
What are the Dangers?
The use of such unauthorised tools means they will lack the required security measures, proper monitoring, and be a threat to the organisation in a number of ways…
1. Increased Risk of Data Breaches
Sensitive company data stored on third-party platforms may bring about weak encryption, poor access control, and vulnerabilities that cybercriminals can exploit.
Unauthorised personal devices used for work purposes (BYOD) might not be adequately secured with the same rigorous protections enforced on company-approved devices. Without proper security protocols, a compromised device or application could lead to a breach of confidential information.
2. Loss of Control Over IT Assets
When employees use unauthorized applications or devices, the IT department loses visibility into the tools accessing the network. This can lead to an overall lack of control over the organization’s digital assets, complicating the ability to monitor security threats and enforce compliance with internal policies. This could result in system failure.
This lack of control also means that the IT team cannot ensure that security patches, updates, and configurations are applied across all devices and software in use. This creates vulnerabilities in the network that are difficult to detect and mitigate.
3. Compliance Risks
With the increasing focus on data privacy laws like the GDPR and PCI-DSS, companies are required to ensure strict control over where and how sensitive data is stored, processed, and transmitted. Shadow IT through inappropriate uploading may circumvent such regulatory frameworks putting the company at risk from regulators.
4. Increased Vulnerability to Malware and Ransomware
Many unauthorized applications or devices lack the necessary security features to prevent malware or ransomware attacks. Employees may unknowingly download malicious software onto personal devices or use untrusted cloud services, which can become entry points for attackers. If a compromised device or application is connected to the corporate network, the entire organization becomes vulnerable to cyberattacks.
5. Fragmentation of Tools and Processes
The use of various unapproved applications can also lead to fragmentation in business processes. Employees may use different tools for the same tasks, creating inefficiencies, version control issues, and difficulties in collaboration. This fragmented approach not only hinders productivity but also complicates the ability to enforce security standards across the organization.
How to Manage Shadow IT
While completely eradicating Shadow IT may not be feasible in some organizations, businesses can take steps to manage and reduce its risks. Here are some strategies for managing Shadow IT effectively:
· Increase Awareness and Education
Many employees may not be aware of the security risks they are introducing by using unauthorized tools. Regular training sessions and cybersecurity awareness programs can educate employees on the importance of using approved tools and adhering to security protocols.
Encourage employees to come forward with any tools or applications they use that are not on the approved list. By promoting an open dialogue, businesses can reduce the chances of employees secretly using risky applications.
· Implement a Clear IT Policy
Businesses should establish clear and comprehensive IT policies outlining which devices, software, and applications are approved for use. This policy should specify the criteria for approving third-party tools and the processes for requesting new tools. Employees should understand that using unauthorized technology can put the organization at risk.
· Monitor and Identify Unauthorized Tools
Use network monitoring and discovery tools to identify unauthorized applications and devices that are connected to the company’s network. Many modern security solutions have built-in Shadow IT detection features that can alert the IT team when a new tool or device is introduced. These tools can also provide insights into which employees are using unauthorized services, helping IT take corrective action.
· Investigate Alternative tools (carrot as well as stick!)
In many cases, employees turn to Shadow IT because they feel that the tools provided by the organization are inadequate or inefficient. Offering employees a range of approved tools that meet their needs can reduce the temptation to use unapproved services. For example, if employees are using personal cloud storage services for file sharing, the organization can offer a more secure, company-approved cloud storage solution.
· Enforce Strong Security Measures for All Devices
Ensure that all devices accessing company resources, whether they are company-owned or personal devices (BYOD), are properly secured. Implementing mobile device management (MDM) solutions can help manage these devices, ensuring that they have the latest security patches, encryption, and remote wipe capabilities in case of theft or compromise.
· Adopt a Risk-Based Approach
Rather than attempting to block all Shadow IT, businesses can take a risk-based approach to assess the severity of potential risks introduced by unauthorized tools. For example, tools that store or process sensitive data should be subject to stricter scrutiny and security controls than those used for less critical functions. A risk-based approach allows businesses to focus resources on the most significant threats without stifling productivity.
· Regularly Review and Update Policies
Finally, businesses should regularly review and update their IT policies to keep up with changing technology and new threats. As new tools and platforms emerge, organizations should evaluate their security and compliance risks, ensuring they adapt their policies accordingly.
Conclusion
Shadow IT can offer immediate productivity benefits, which makes it attractive to users and some managers. However, it introduces significant risks that can jeopardize a company’s security and regulatory compliance.
By understanding the dangers of Shadow IT and implementing a comprehensive management strategy, businesses can mitigate these risks while still fostering innovation and efficiency. Education, monitoring, and the use of approved alternatives are critical components of an effective Shadow IT management plan.
By taking appropriate mitigation steps promptly, organizations can safeguard their data and ensure that they maintain control over their IT ecosystem.
Useful links
NCSC Guidance on Shadow IT:
CISCO Article on Shadow IT:
IBM Article on Shadow IT:
TechTarget Article on Shadow IT:
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