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The Dangers of Shadow IT: How Unapproved Apps and Devices Put Your Business at Risk

What Is Shadow IT?

Shadow IT refers to the use of unauthorized software, applications, devices, or cloud services within a company’s network without the knowledge or approval of the IT department. This can include anything from file-sharing platforms, messaging apps, and personal devices like smartphones and tablets, to cloud storage services and collaboration tools.

The rise of remote work, along with the proliferation of software-as-a-service (SaaS) applications, has made it easier than ever for employees to download and use applications that they believe will boost their productivity. However, this behavior, while often well-intentioned, can introduce serious risks to the security and integrity of your business’s data.
Why Do Employees Engage in Shadow IT?

The reasons employees turn to unapproved apps and devices vary, but some common motivations include:

Convenience and Efficiency

Employees may find certain tools easier to use or more efficient for their workflow than the tools provided by their company. For example, a project manager might prefer using a cloud-based task management app instead of the company’s internal project management system.

Lack of Awareness

Employees may not be fully aware of the security risks or corporate policies surrounding the use of third-party apps. In many cases, they don't realize they are engaging in shadow IT.

Need for Flexibility

In industries that require quick decision-making and adaptability, employees may feel the need to bypass traditional approval processes to get the job done quickly.

Remote Work and BYOD

The increase in remote work and bring-your-own-device (BYOD) policies means employees are often using personal devices or software to access work-related data. Without proper oversight, this can expand the company's attack surface significantly.

While these actions are often taken to improve productivity, the security risks they introduce can far outweigh the benefits.
The Dangers of Shadow IT

Increased Vulnerability to Cyberattacks

The most significant risk posed by shadow IT is the increased vulnerability to cyberattacks. Unapproved apps and devices often lack the rigorous security measures that the IT department puts in place for company-approved software. This makes them prime targets for hackers and malware.

For example:

Employees using unvetted file-sharing services may inadvertently expose sensitive company data to the public.
A personal smartphone connected to the company’s network could be running outdated software, leaving it vulnerable to exploits or malware that can spread to the company’s systems.

When IT teams are unaware of these apps and devices, they cannot monitor them or ensure that they comply with the company’s security protocols.

Data Leaks and Loss of Confidential Information

Shadow IT can result in data leaks or unauthorized access to confidential information. Many employees use apps like cloud storage or messaging platforms to share work-related files, unaware that these tools may not encrypt data properly or comply with company security standards.

If sensitive customer or financial data is uploaded to an unsecured app, it could easily be exposed, either through a data breach or accidental sharing. This not only puts the company’s reputation at risk but can also lead to legal issues, especially if the leak involves personal data covered under regulations like the General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA).

Compliance and Regulatory Issues

Many industries are governed by strict compliance regulations that dictate how sensitive data must be stored, processed, and protected. Shadow IT can make it difficult for businesses to comply with these regulations because unauthorized apps may not meet the necessary security or data protection requirements.

For instance, if employees are using unapproved cloud services to store customer information, your business could be in violation of data privacy laws, potentially resulting in heavy fines and penalties.

Loss of Control and Visibility

When employees use unauthorized apps or devices, the IT department loses visibility and control over the network. Without a clear understanding of what apps are being used or how data is being shared, IT teams cannot effectively manage security risks or respond to incidents.

This lack of control also makes it harder to conduct regular security audits or ensure that data is being backed up properly. If an unapproved app crashes or is breached, valuable company data could be lost with no way to recover it.

Increased Costs and IT Complexity

Shadow IT can create a fragmented IT environment, where multiple apps and tools are being used without central oversight. This can increase operational complexity, leading to higher IT costs in the long run. When IT teams eventually discover these unauthorized apps, they may have to spend significant time and resources addressing security gaps, managing integrations, or migrating data to approved platforms.
How to Reduce the Risks of Shadow IT

While shadow IT cannot always be eliminated completely, there are steps you can take to mitigate its risks and protect your business.

1. Establish Clear IT Policies

One of the most effective ways to combat shadow IT is by establishing and communicating clear IT policies. Employees need to understand which apps and devices are approved for use, and the reasons why certain tools are restricted.

Tips:

Create a list of pre-approved apps and services that employees can use for specific tasks.
Develop guidelines for the use of personal devices, and outline the steps employees must follow before using new apps or tools.

2. Educate Employees on Security Risks

Often, employees engage in shadow IT simply because they’re unaware of the risks. Regularly educate your team on the dangers of using unapproved apps and the potential consequences of data breaches or non-compliance.

Tips:

Conduct regular cybersecurity training that explains why shadow IT is risky and how employees can stay within company guidelines.
Share real-world examples of data breaches or attacks that resulted from the use of unauthorized software.

3. Enable Secure Alternatives

Provide employees with approved, secure alternatives to the tools they need. For example, if employees are using unapproved cloud storage platforms, offer a company-sanctioned cloud solution with robust security features and easy usability.

Tips:

Make sure the tools you provide are user-friendly and flexible so that employees aren’t tempted to seek out unauthorized alternatives.
Ensure employees can request new apps or services through a formal process that allows IT to review security implications before approval.

4. Implement Endpoint Security and Monitoring

To gain better visibility into your network and devices, implement endpoint security solutions and monitoring tools. This allows the IT department to track device usage, detect unauthorized applications, and manage security patches across all endpoints.

Tips:

Use network monitoring software to flag unapproved apps or services as soon as they are detected.
Ensure that all endpoints—whether personal or company-owned—are protected with firewalls, antivirus software, and encryption.

5. Enforce Access Control and Data Protection

Deploy access control measures like multi-factor authentication (MFA) and role-based access control (RBAC) to limit who can access sensitive data, even if shadow IT apps are used. This way, even if a rogue app or device is compromised, the potential damage is minimized.

Tips:

Implement data loss prevention (DLP) tools to monitor data transfers and block unauthorized sharing of sensitive information.
Set up security alerts for any unusual activity, such as large file transfers or access to sensitive data from unrecognized devices.

Conclusion

While shadow IT is often driven by good intentions—such as employees wanting to work more efficiently or communicate better—it creates significant security risks for businesses. Without proper oversight, unauthorized apps and devices can lead to data breaches, compliance violations, and increased vulnerability to cyberattacks.

By developing clear IT policies, educating your employees, and implementing strong security measures, your business can reduce the risks associated with shadow IT while still allowing your team to stay productive and flexible in their work.