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Implications of Shadow IT

May 3, 2022 / by Frederid Palacios

Interoperability and cohesion between tools, applications, and platforms within an organization are necessary. Achieving this ensures that data can be exchanged as efficiently and accurately as possible, in addition to reducing security risks. 

Unfortunately, many organizations are struggling with the implications of shadow IT, which drastically limits the effectiveness of their system. For companies to minimize costs, mitigate security threats, and optimize operations, they must recognize the risks and eliminate the presence of shadow IT. 

Security concept Lock on digital screen, illustration

What is Shadow IT?


Shadow IT is the exact opposite of interoperability and cohesion within an organization. This occurs when employees within an organization use tools, applications, and platforms without the approval and knowledge of their internal IT department. Typically, this happens when employees use their own applications in lieu of unified company ones, and it is usually when employees do not see value in the system that their company has in place. 

In the best-case scenario, shadow IT can cause inconsistencies in data and serve as an inconvenience within an organization. Unfortunately, most companies experience the worst-case scenario: losing control of important information, driving IT costs, and introducing major security risks. Should shadow IT go unnoticed in an organization for too long, it opens the door to many significant risks. 

For this reason, it is crucial that companies be aware of the tools and applications that their employees are using. As the IT department is trained to understand which tools are beneficial to the organization and which can be harmful, they should know all tools and technologies being used under the umbrella of the organization. To ensure that your organization doesn’t face these problems, we will discuss five significant risks of shadow IT and how they can impact your organization. 


Implications and Risks


1. Opening Security Gaps

One of the most pressing risks concerning shadow IT is security. If employees are using tools and systems that the IT department hasn’t vetted, they will likely introduce a new security threat to the organization. While some systems may seem harmless, others could inadvertently share sensitive data. 

Not only will the platform likely not use the same security procedures as other supported technologies, but it could also be more vulnerable to security breaches, essentially creating an open window for hackers. For this reason, IT staff must know what applications and tools are in use so they understand what risks the organization is being exposed to. 


Cyber Security as a Competitive Advantage


2. Compliance and Regulations

Compliance is another significant risk of shadow IT for many of the same reasons as security. Businesses are often held responsible for meeting certain regulations and standards to ensure that they operate ethically and protect consumer information. If organizations are unable to maintain the security of sensitive data, they are likely to fail to comply with not only industry, but government regulations. 

When IT is aware of an organization’s systems and platforms, they can ensure that they are in compliance. But, when shadow IT occurs, the IT department doesn’t have the information they need to remain compliant, like making proper documentation or getting licenses approved. As such, companies are susceptible to audits, fines, and potentially jail time should the regulation breach be extreme. 


3. Reduced Interoperability and Configuration Management

Beyond security and compliance, there are many operational risks that shadow IT poses. As mentioned above, interoperability is crucial to a modern organization. With so many tools and technologies being used within an organization, it is vital that they are compatible with one another. If not, data can easily be lost or damaged, in addition to drastically slowing down the speed of sharing. In an industry where speed is everything - these losses can be detrimental to an organization. 

When shadow IT occurs, technologies and systems within an organization can not operate as efficiently as they should. When the IT department implements new tools, they use their knowledge and experience to ensure that the systems are compatible and can work together efficiently. When IT is not aware of certain tools being used, they cannot do this, resulting in overall slower operations. 


4. Inefficient Collaboration

Similar to its effect on interoperability, shadow IT can also drastically reduce collaboration within an organization. If employees are using incompatible platforms or systems, collaboration and data sharing can be significantly impaired. 

For example, if one employee uses Microsoft Word for a project and their collaborator uses Google Docs, it may be more challenging to collaborate and share data. The same goes for clients using video conferencing platforms and data storage tools. 

If all employees use the same platforms, it makes collaboration significantly easier - and more accurate, reducing data loss or damage. For this reason, the IT department must determine a unified platform for employees, and employees stick to it. 


Lack of IT Visibility 

A lot goes on beyond the scenes in the IT department. While it may only seem as though they are conducting bug fixes and technical errors, they monitor and manage the network for the entire organization - including every device and system within. If there are systems running within the organization’s network that IT is unaware of, it could negatively impact the company’s bandwidth and network efficiency - and IT won’t know why. 

Such a disruption could significantly disrupt an organization's operations, not to mention increase costs. Most third-party applications weren’t meant to be a part of your organization's infrastructure - which is why the IT department didn’t implement them! For IT to do their job most efficiently, they must have clear and thorough visibility of the company’s entire technical infrastructure, which isn’t possible if shadow IT is present. 


How to Avoid Shadow IT


Shadow IT is a widespread problem in companies worldwide. Whether employees prefer a third-party application to the company’s, or they simply aren’t aware of the risks, they are damaging their organization’s network and efficiency. For this reason, it is crucial that businesses educate their workforce on the implications of shadow IT and implement the right practices to avoid it. 

A simple but effective way to mitigate the risks of shadow IT is by educating your workforce. Many employees may not know that they are engaging in shadow IT and introducing their organization to risks. By making them aware, they may change their behaviors on their own. 

It can also be helpful to embrace technologies that help your employees. If your employees are engaging in shadow IT, it’s likely because they need a resource that your organization doesn’t offer. Consider asking your employees to request new applications to get approved by IT before use. In doing so, employees may not need to resort to shadow IT. Shadow IT poses a serious risk to organizations, but by supporting your workforce, a simple solution can be found.


Intertec Managed Services

Tags: Cyber Security

Frederid Palacios

Written by Frederid Palacios

Fred Palacios is a seasoned software architect with more than 20 years of experience participating in the entire software development cycle across a host of different industries--from automotive and services to petroleum, financial, and supply chain. In that time, his experience working closely with high-level stakeholders has provided him with a strategic vision for developing the right solutions to flexibly meet critical business needs. As CTO of Intertec, he's continuing to focus on the creation of business-critical applications for large enterprise projects, particularly those that handle high concurrency and large datasets. He is passionate about using technology as a tool to solve real-world problems and also mentoring technical teams to achieve their maximum potential and deliver quality software.

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