Shadow IT

Navigating the Grey Area of Shadow IT

In today’s fast-paced digital world, technology is constantly evolving, and businesses are always looking for new tools and solutions to improve their operations. However, this quest for innovation often leads to the emergence of unsanctioned technology, commonly referred to as Shadow IT. Shadow IT refers to using unauthorized software, cloud services, and applications by employees for work-related purposes. While these tools may seem harmless, they pose significant security risks and compliance issues for organizations. Navigating the gray area of Shadow IT can be challenging, but with the right strategies and best practices, businesses can manage unsanctioned technology effectively. In this article, we’ll explore the risks of Shadow IT and provide some tips on managing it to ensure your business stays secure and compliant.

Understanding Shadow IT

Shadow IT refers to any technology used within an organization without the IT department’s or management’s approval or knowledge. This can include many tools, such as personal email accounts, file-sharing services, messaging apps, and cloud storage platforms. In some cases, employees may use Shadow IT because it will help them to be more productive or efficient. In contrast, they may simply be unaware that their actions could pose a risk to the organization.

The Dark Side of Shadow IT: How Your Company’s Biggest Threat Might be Coming From Within

The challenges posed by Shadow IT are numerous and complex, and they vary depending on the size and structure of the company. However, some of the most common challenges we see include the following:

Security Risks

Shadow IT can expose companies to significant security risks. For example, when employees use unapproved tools and applications, they may not be subject to the same security protocols and measures as approved tools, leaving the company vulnerable to data breaches, cyber attacks, and other security threats. Gartner estimated that one-third of all successful cyber attacks will be on data stored in shadow IT infrastructure.

Compliance Risks

Shadow IT can also pose compliance risks for companies. For example, if employees use unapproved tools and applications to store or process sensitive data, the company may violate industry regulations and face fines or other penalties.

Integration Challenges

Shadow IT can make it difficult for IT teams to integrate different systems and applications. When employees use various tools and applications, it can be challenging to maintain a cohesive and manageable technology infrastructure.

Data Loss

Shadow IT can also result in data loss or data leakage. For example, when employees use unapproved tools and applications to store or process data, they may not back it up correctly or protect it from accidental deletion or loss.


Shadow IT can create inefficiencies within companies. Tracking and managing unsanctioned tools effectively can be difficult, wasting time and effort.

Increased Costs

Shadow IT can also result in increased costs for companies. The average company wastes $135,000 on unnecessary SaaS tools.

Rebel with a Cause: The Surprising Benefits of Embracing Shadow IT in Your Company

While Shadow IT is generally seen as a challenge for IT teams to manage, some IT teams have chosen to embrace it. Here are some reasons why:


Shadow IT can be a source of innovation for companies. By allowing employees to experiment with new tools and technologies, IT teams can discover new and innovative working methods that can improve productivity and efficiency.


Shadow IT can give companies the agility to respond quickly to changing business needs. By allowing employees to use the tools and applications they need to get their work done, IT teams can avoid the bureaucracy and delays associated with traditional IT procurement processes.

Employee Satisfaction

IT teams can improve employee satisfaction and retention by allowing employees to use the tools and applications they prefer. This can help companies attract and retain top talent in a competitive job market.

Cost Savings

Shadow IT can also help companies save money by reducing the need for IT procurement and management. By allowing employees to use cloud-based solutions and other cost-effective tools, IT teams can reduce the company’s IT budget while maintaining high productivity and efficiency.

Managing Shadow IT: Best Practices for Taming Your Company’s Wild West of Tech

Balancing the challenges of Shadow IT while embracing its opportunities can be a delicate tightrope act for any company. On the one hand, uncontrolled technology can lead to security breaches, data loss, and legal liability. On the other hand, Shadow IT can bring agility, innovation, and competitive advantage to organizations. Therefore, companies need to adopt a pragmatic approach to balance the risks and benefits of Shadow IT. This approach involves creating a clear governance framework to identify, assess, and mitigate risks associated with unapproved technology. At the same time, companies should encourage employees to share their ideas and embrace new technologies that drive business growth. Here are several strategies that IT teams can use to balance the two approaches:

Conduct Regular Audits

IT teams can conduct regular audits to identify unapproved technology systems and applications employees use. These audits can help IT teams understand which applications are being used and why, allowing them to address any inefficiencies or security risks.

Establish Clear Communication Channels

IT teams can establish clear communication channels for employees to request new tools and applications. This can help employees feel more supported by their IT department and reduce the need to seek alternative solutions.

Adopt a Shadow IT Policy

A Shadow IT policy can provide guidelines for employees on which applications and systems are approved for use and the consequences of violating the policy. This can help the IT team control the company’s technology infrastructure and mitigate security risks.

Educate Employees

IT teams can educate employees on the risks of Shadow IT and the benefits of using approved technology systems and applications. By providing employees with the knowledge they need to make informed decisions, IT teams can reduce the likelihood of Shadow IT use.

Implement Cloud-Based Solutions

IT teams can implement cloud-based solutions such as Microsoft 365 to provide employees with comprehensive tools while maintaining control over the company’s technology infrastructure. These solutions can provide employees with the flexibility and agility they need while also providing IT teams with the required visibility and control.

Offer Training and Support

IT teams can offer training and support for employees on the approved technology systems and applications. This can help employees feel more confident using these tools, reducing the need to seek out alternative solutions.

Monitor Network Traffic

IT teams can monitor network traffic to detect unapproved technology systems and applications employees use. This can help IT teams address any security risks or compliance issues.

Address Shadow IT Incidents

Finally, businesses should have a straightforward process for addressing Shadow IT incidents when they occur. This should include a transparent reporting process for employees to report incidents and a plan for how IT teams will respond to incidents and address any potential security risks.

Wrapping Up

Shadow IT can pose significant business risks, including security breaches, compliance issues, and a lack of visibility and control. However, with the right strategies and best practices, businesses can effectively manage unsanctioned technology and ensure their operations are secure and compliant. By creating a Shadow IT policy, educating employees on the risks of Shadow IT, monitoring and detecting unauthorized tools, and addressing incidents when they occur, businesses can navigate the grey area of Shadow IT and stay ahead of potential risks and threats.

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