What is Shadow IT? Examples and Risks

According to a survey by McAfee, 80% of employees admit to using non-approved SaaS applications at work. (Source: McAfee, “Shadow IT: Understanding and Mitigating Risk”). In an organization, the IT department plays a crucial role in maintaining the Security of the IT infrastructure and data stored in it. They follow specific guidelines, develop a cybersecurity plan, and ensure the organization has proper backup and recovery solutions to tackle potential threats. However, the complete protection of the IT infrastructure requires the cooperation of all organization members. If some members fail to comply with the guidelines or ignore the data security recommendations of the IT department, they expose the organization to significant security risks.

In this article, you will learn what Shadow IT is, how it can look in practice, and what potential security risks it exposes your organization to.

What is Shadow IT?

In short terms, Shadow IT refers to any software or hardware your IT department has not authorized for safe usage. Since many workers in various organizations have shifted to a fully remote work mode, your team needs help to control what the other users utilize. While Shadow IT has been a problem in the past, there was a sharp increase in notable Shadow IT incidents, which led to security risks with the influx of the COVID-19 pandemic.

Employees resort to shadow IT because they believe that the approved tools by the IT department are insufficient or they can perform their work more efficiently with other tools. This includes connecting to the organization’s database through unauthorized endpoints (personal phones or computers) or using unauthorized software to work or communicate with other organization members. In most cases, Shadow IT is not a malicious act intended to harm the IT infrastructure and create security risks.

Although employees who engage in Shadow IT may be unaware of the potential consequences for the company’s security, it is crucial to understand that the security measures put in place by the IT department are there for a reason. Connecting to the database through an unsecured endpoint or sharing critical company information through an unauthorized communicator exposes the data to severe security risks and makes it easier for potential attackers to access.

Shadow IT Examples

Although Shadow IT is a broad term used to describe all of the unauthorized usages of software or hardware, which can occur within your organization, it is possible to single out some of the most common examples of Shadow IT used in various industries at the time.

Generally, the software or hardware used in Shadow IT most likely fails to meet some essential criteria your IT team delineates. These most commonly include:

• Exposed Endpoints: One of the most common security risks involving Shadow IT is organization members using unauthorized endpoints to access important data. In many cases, members who need to access a database with crucial information are given special hardware intended for work, which has an increased level of Security and allows for safe access to important data. However, there are many situations in which a person might decide to use a different endpoint. For example, if they are on the go, they might want to use their phone to check out if they have any new tasks, or they might want to use their personal computer since this is what they are used to. If something like this occurs, they are engaging in Shadow IT, and the longer they do so, the more security risks your IT structures incur.
• Unauthorized Off-the-shelf Software — Unauthorized SaaS usage generally applies to software used within your organization’s boundaries. Very often, it is difficult (if not impossible) to obtain a subscription license for a SaaS with the individual’s resources. Most of the time, SaaS shadow IT is combined with unauthorized purchases by the organization’s members. Things are slightly different regarding a more usual off-the-shelf software, which is more widely available and easier to access from a personal device. While it is easier to access than a SaaS, off-the-shelf software creates more severe Shadow security risks. Its usage is much more difficult to control and detect than any unauthorized SaaS. This applies in particular to organizations that utilize mostly remote work. Employees working from the comfort of their homes might find it more enticing to use unauthorized off-the-shelf software to connect to your database, exposing it to various dangers.

• Compliance — If your organization is handling sensitive data, such as banking information or healthcare records, you will most likely be required to meet specific data retention policies and other essential regulations concerning compliance. While your IT team will always try to work in a way that will adhere to all of the important regulations, if your workers engage in Shadow IT and use software that does not comply with the legal requirements, you and your organization might face legal repercussions.

• Reliability — When your IT team selects software or hardware, which can be used to access your organization’s database, it is mainly chosen based on being both the most secure and most reliable. If an essential part of your work is done via Shadow IT and unauthorized software, you can not be sure how reliable it will be. While unreliable software does not pose a security risk to your IT structures, it can easily interrupt workflow in the future.
• Documentation — One of the points of producing documentation is to easily control all of the processes in the background. At the same time, your team works and provides the appropriate documentation when necessary. However, if your workers engage in Shadow IT, this can cause issues with documentation, which become visible only when you try to produce the documentation itself.

How To Reduce The Risk Of Shadow IT?

In a survey conducted by Frost & Sullivan, 50% of organizations reported experiencing a data breach due to Shadow IT. (Source: Frost & Sullivan, “The Hidden Truth Behind Shadow IT”). As you can see, shadow IT comes in many shapes and forms and can easily lead to severe consequences for your organization. If you want to lower the risk of your employees engaging in Shadow IT behind your back, there are some easy steps that you can use to reduce this threat. It will not come as a surprise to say that most of it concerns communication and employee awareness.

• Communicate with your employees regarding their needs – Suppose a member of your organization is engaging in Shadow IT. In that case, chances are they are not doing it out of convenience and simply require some additional technical capabilities that unauthorized software or hardware can provide. To reduce the security risk of Shadow IT within your company, communicate with your team regarding their needs and try to provide them with the tools they find necessary.

• Educate your team on possible security risks – Most members of your organization who engage in Shadow IT and create security risks are doing so unaware. Many of them might not realize just how exposed their endpoints are. Educating your employees on the possible dangers of Shadow IT will significantly help reduce the chances of your team members engaging in it.

• Enforce stricter security policies – Although many people who use Shadow IT are unaware of the possible dangers involved, some of them are doing so consciously for various reasons. They might not like the software authorized by your IT department or simply find that the one they prefer is more convenient. To stop this, your organization might have to introduce stricter security policies to reduce the risks related to Shadow IT.

How can backup and recovery solutions fight against Shadow IT?

A report by Gartner predicts that by 2022, one-third of successful attacks experienced by enterprises will be on their shadow IT resources. (Source: Gartner, “Predicts 2019: Security and Risk Management Programs”). Backup and recovery solutions can help mitigate the risks associated with Shadow IT in several ways:

• Data protection: Shadow IT can create data security risks if the unauthorized applications or services being used are not secure or compliant with company policies. Backup and recovery solutions can protect data by regularly backing it up and ensuring that it can be quickly and easily restored in case of data loss or corruption.
• Visibility: Backup and recovery solutions can provide IT administrators with visibility into what data is being stored, where it is being stored, and who is accessing it. This can help identify any unauthorized applications or services being used and take necessary actions to bring them under control.
• Compliance: Backup and recovery solutions can help ensure compliance with data retention policies and regulations. This can help prevent employees from using unauthorized applications or services to store data that is not in compliance with company policies or regulations.
• Rapid recovery: In the event of a data loss or corruption, backup and recovery solutions can provide rapid recovery, minimizing the impact of any potential data loss or damage. This can help reduce the risk associated with Shadow IT by providing a reliable and fast way to recover lost or damaged data.

Overall, a robust backup and recovery solution can help IT teams take a proactive approach to managing Shadow IT and protecting company data. In any situation where the security of company data is at stake, a reliable backup solution comes in handy. That what Storware Backup and Recovery is all about. Get the free Trial or contact us if you are interested in a one-on-one demo. By ensuring that data is protected, visible, compliant, and quickly recoverable, organizations can reduce the risk associated with Shadow IT and ensure that their data is always available and secure.

Conclusion

Shadow IT poses significant risks to various aspects of an organization’s functioning and should be avoided whenever possible. The IT department’s security measures and guidelines exist to ensure the safe and secure usage of software and hardware within the organization. Employees should follow the guidelines and avoid engaging in Shadow IT to protect the organization from potential security risks.