Shadow IT and its silent threats lurk in most organizations

Shadow IT may be putting your organization at more risk than you may realize. In a survey conducted by Randori and ESG in 2022, seven in 10 organizations reported they had been compromised by shadow IT in the past year alone.

Not only is shadow IT a significant threat to an organization’s cybersecurity, but it is also shockingly common. And with the rise of remote work, shadow IT’s prevalence is more relevant than ever before. According to G2, 80 percent of users admit to using software that hasn’t been cleared by the information technology (IT) team of their company.

If you have poor visibility into your network, lack comprehensive security solutions, and aren’t innovating quickly enough to support your employees, your company may be at significant risk. So, what exactly is shadow IT, and how can organizations address its risks? In this blog, we’ll dive into the risks and benefits of shadow IT, how to identify and address it, and how doing so can not only help you protect your business but also improve decision-making and data analysis.

What is shadow IT?

Shadow IT is the use of IT software, hardware, systems, and services without awareness and IT approval from an organization’s security group. Examples of shadow IT include starting a group chat in an unsanctioned Slack workspace; saving files to a personal Google Drive, Google Docs, or Dropbox; communicating through messaging apps like WhatsApp instead of approved channels; and file sharing with a personal thumb drive. Bring-your-own-device (BYOD) policies are a common cause of shadow IT.

While the use of unsanctioned tools usually comes from a well-intentioned place and does not include malware or other malicious assets from hackers, it can still pose serious security risks to your organization. Many employees use shadow IT for convenience and productivity—many of them use the assets in their everyday lives and prefer to use something they’re comfortable with. However, because the IT department doesn’t know about these tools, they cannot monitor them or address possible vulnerabilities.

What are the risks of shadow IT?

Shadow IT is an excellent example of how security threats don’t all originate from malicious activity. At times, your organization can be put at risk when your employees have the best of intentions—like productivity. The following are a few ways shadow IT risks put your organization in a vulnerable position:

• Visibility and monitoring gap: A key characteristic of shadow IT is that it operates “in the shadows” of the IT department’s oversight. Since these tools are not officially recognized, IT teams lack visibility into their usage, security vulnerabilities, and potential risks.
• Operational inefficiencies: While your team may be using shadow IT in the hope of becoming more efficient, it may result in the opposite outcome. Shadow IT applications might not integrate well into your infrastructure, which will block workflows that were otherwise seamless. Additionally, the IT department won’t be able to identify opportunities for improvement, as they won’t know about potential roadblocks.
• Increased support costs: Shadow IT’s operational inefficiencies can significantly escalate support costs within organizations. The adoption of unauthorized tools disrupts workflows, leads to collaboration hurdles due to lack of standardization, and creates knowledge gaps that generate a higher volume of user queries. The absence of official documentation and adherence to security protocols adds to the burden on IT support teams. Moreover, as support resources are diverted toward troubleshooting shadow-IT-related issues, critical tasks such as proactive security measures and strategic initiatives take a back seat. The resulting delayed issue resolution not only hampers employee productivity but also magnifies frustrations, underscoring the urgent need to mitigate the impact of shadow IT to contain support costs.
• Compliance issues: In highly regulated industries, you must follow strict requirements and security policies for processing data. In shadow IT solutions, your compliance experts won’t have the insights needed to review processes or data, preventing them from ensuring that data security standards are met. At the very least, this could result in fines. Even worse, it could lead to legal action.
• Lack of data and cloud security: Perhaps the most significant risk posed by shadow IT is that it leaves your endpoints and sensitive data exposed to breaches or leaks. Because the data stored on and sent through unsecured shadow IT devices and apps isn’t regulated, it’s easy for data loss to occur, leading to information that is inconsistent, invalid, lost, or outdated. Whether the data is stored on personal laptops and smartphones or sent through unapproved, new technologies, it’s not nearly as secure as it could be with properly maintained IT applications.

When your IT security team can’t protect all of your organization’s data, you’re exposed to security threats and data breaches that are not only difficult to spot but also impossible to address as quickly as possible. What usually starts as a quick fix can quickly turn into a long-term security problem.

Are there benefits of shadow IT?

While shadow IT exposes your organization to several significant risks, simply banning it may not be the best solution. That’s because shadow IT offers perceived business benefits for end users. For example, shadow IT empowers employees to feel agile and in control of their processes and technological advancements. Similarly, it can reduce IT costs and resources by enabling employees to use the tools that work best for them.

Leaving shadow IT alone isn’t the answer either, as it will subject your company to significant security risks. Luckily, it’s possible to achieve the best of both worlds: Organizations can mitigate the risks of shadow IT without sacrificing its perceived benefits by aligning shadow IT with traditional and approved IT policy instead of outright banning it.

How can my company reduce the risks of shadow IT?

Every organization is subject to the risks presented by shadow IT, which makes addressing it essential to growth and long-term success. Managing shadow IT starts with developing an effective strategy involving cybersecurity technologies and cloud services that can help identify and classify rogue or unauthorized devices. These systems should also create metrics that inform future management decisions.

For example, ServiceNow Vulnerability Response, CMDB, and IT Asset Management (ITAM)—especially Software Asset Management (SAM)—can help organizations protect their environments and cut software expenses by pinpointing shadow IT and reducing overlap.

ServiceNow ITAM and SAM

ServiceNow ITAM provides organizations with a secure framework for driving insights into organizations’ IT tools and systems. From asset discovery and inventory to license management, ITAM can track everything across an organization. This visibility empowers IT departments to identify unauthorized devices that could be shadow IT.

More specifically, ServiceNow SAM helps organizations overcome shadow IT risks by empowering IT teams to do the following:

• Determine whether they’re maximizing the value of their cloud software solutions
• Discover overlapping software spend
• Optimize software use with visibility into on-premise and cloud performance

With ServiceNow SAM, organizations can drive shadow IT discovery by utilizing software spend detection that analyzes their software footprint and empowers them to gain a full-picture view of their SaaS landscape. SAM extracts data from sources like credit card purchases for detailed insights into purchase data. Then, the data is run through a normalization process that detects and shows software across the company.

ServiceNow CMDB

ServiceNow CMDBs offer an extra opportunity for organizations to mature their asset management. For example, companies can use ServiceNow CMDB with ITAM to identify unauthorized tools that should be the core of their IT operations. Not only will this offer a company the ability to manage diverse data in one place, but it will also provide a holistic view of your corporate network.

With a centralized repository of configuration items, CMDBs allow teams to scan virtualized services, software, and hardware to create a complete and up-to-date inventory of technology assets, empowering IT to understand the relationship between assets to identify shadow IT tools.

ServiceNow Vulnerability Response

In addition to asset management tools, organizations can also protect their enterprise with ServiceNow Vulnerability Response (VR). This system is a valuable component in mitigating the risks associated with shadow IT through vulnerability scanning and detection, real-time incident tracking, and automated workflows.

Because VR can complete regular scans of an IT infrastructure, it can help IT teams identify weaknesses introduced by both authorized and unauthorized software and hardware. Additionally, when integrated with CMDB and ITAM, it can provide an even more comprehensive view of assets and associated vulnerabilities.

Don’t let your organization sit still while it’s exposed to dangerous security threats. With ServiceNow and a great provider by your side, you can implement tools that empower you to eliminate the risk of shadow IT while continuing to support your employees.