Shadow IT: What is it & Why Should you Care?

Most organizations have adopted cloud computing capabilities across their business. Unfortunately, this is a double-edged sword. Employees have started to access various pieces of software that are not under the direct control of the relevant IT department. Although these new software resources can improve productivity, it also comes with a range of risks from security breaches to data loss.

What Is Shadow IT?

Shadow IT can be seriously damaging or utterly harmless to your organization. The term “shadow” is used, because just like a shadow, you don’t know what it is until it’s exposed.

An example of shadow IT is when employees of your organization use new software without permission or personal devices to access business data, without the knowledge or approval from your IT department. 

Employees are typically unlikely to use shadow IT with malicious intent, rather they are trying to increase productivity without understanding the potential implications of the associated risks. The risks of shadow IT are explored in more detail later in this blog. Shadow IT can be a source of innovation if it is identified and regulated in a timely manner by the IT department.

Types Of Shadow IT

1.  Software Applications

SaaS applications implemented without authorization from the IT department can pose a significant risk due to exposure of critical data, unauthorized access to corporate data through integrations and may create an exposure to vendors with poor data security practices.

2. Physical Devices

Physical devices include any smart connected devices such as security cameras, office management systems, and even webcams. This is often overlooked by employees, causing a greater risk to individuals or groups that intentionally attack cyber systems, otherwise known as threat actors.

3. Local Applications

Local software applications which are installed on a user's machine such as KVM software solutions, printer drivers and desktop shortcuts. These applications pose significant internal risk, potentially acting as a backdoor to obtain user credentials. 

4. Subnets

Subnets are internal networks that enhance network efficiency. Business growth from acquisitions and new offices can create unknown routable subnets that are unmanaged.

5. Virtual Machines

Virtual machines are computer systems that use software on one physical computer to emulate its functionality onto another physical computer. If these assets are unmanaged they can introduce vulnerabilities and security risks.

6. Network Hardware

Network hardware (such as WiFi access points, network switches, routers and hubs) enables communication between operational devices on a computer network. Without systematic management, shadow network hardware poses significant risks such as inappropriate access from external parties.

Risk Implications From Shadow IT?

There are many associated risks with shadow IT when it is not identified and managed within an organization. We can split these risks into 3 key areas:

1. Data leakages

Some applications require a higher level of security. If these are not controlled appropriately, the organization is left vulnerable to a number of data breach scenarios. Namely, potential avenues for hackers to gain access to sensitive information and data. Without practices in place to manage shadow IT, unsecured data can be leaked from the business, leading to a range of catastrophic outcomes for the organization.

2. Attack surface enlargement

The attack surface of a company is the amount of software and network environment that is exposed to hackers. This means the more app subscriptions and physical devices your business has, the higher chance a business will be attacked due to the increased number of vulnerable entry points. Without management of shadow IT that uncovers vulnerable entry points, an organization is at risk of sensitive information and data getting stolen by third parties.

3. Non-compliance

All businesses are required to maintain a certain level of legal compliances to operate lawfully. If mandatory regulations aren’t followed then you could be subject to lawsuits and brand damage. Shadow IT makes it increasingly difficult for businesses to comply with all necessary regulations.

How To Manage These Risks?

1. Technology Management

First and foremost it is a priority to check if your employees have the hardware and software necessary for them to undertake their roles effectively and productively. The primary reason individuals engage in shadow IT is because they don’t have the required technology already in place. By keeping up to date with your employees’ needs, you can mitigate the chances of shadow IT occurring in the first place.

2. Education

One of the easiest and best ways to manage the risks of shadow IT is to educate your staff about the potential dangers of using undeclared and unauthorized software subscriptions. This will ensure that employees are deterred from using shadow IT and understand that it needs to be reported to IT immediately.

3. Guidelines

Introduce strict guidelines that outline what is approved software and what is shadow IT. By implementing specific guidelines, you can prevent employees from using unapproved software and devices. These guidelines must be communicated clearly to all employees and we recommend creating a digital resource of the IT regulations within your organization that is easily accessible. 

4. Risk Management

To mitigate the risks associated with shadow IT it is necessary to prioritize which assets are most vulnerable. Assets directly exposed to the internet should be prioritized first when undertaking risk management for the business, opposed to assets behind a firewall or VPN service that are more secure.

5. Defensive Application Deployment

To gain total visibility of your organization's IT usage, a reliable solution is to use a tool that automatically monitors the network to identify anomalous behavior and activity. This will uncover the entire attack surface of your organization, meaning your IT department can prevent any potential data breaches.

Do You Have a Shadow IT Policy?

In order to minimize the risks associated with shadow IT a business needs to implement a policy which provides key guidance and defines the different responsibilities for employees and the dedicated IT department. 

Usually, a rise in shadow IT can be traced to an under-resourced IT department, leading to a rise in company data leakages and increase in damaging third party attacks. 

A shadow IT policy enables you to establish protocols for buying hardware or implementing software into the organization. It is important for the IT department to create these policies and then implement them into the organization.

Today employees have more IT choices than ever before meaning it is more essential than ever to take your whole organization out of the shadows and into the light.

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