Shadow IT: What are the risks and how can you mitigate them?

Shadow IT is one of the most common problems companies face today. With the increasing number of people bringing their devices to work and the constant appearance of new software solutions and cloud services, employees are using more and more technologies without notifying the corporate IT team about them. And usually, they don’t even realize how dangerous their actions are.

What is shadow IT?

First, let’s clarify what shadow IT is. Generally speaking, shadow IT refers to any IT system, solution, or technology that’s used within an organization without the knowledge and approval of the corporate IT department.

The most common examples of shadow IT are SaaS products and cloud services like Salesforce and Dropbox. However, people hired by your company to perform PC or application support or to develop new products may also be considered part of shadow IT if they weren’t added to the corporate IT system.

Why do people use shadow IT?

In order to at least try to solve the problem of shadow IT, we need to first figure out what causes it. Employees turn to unapproved IT solutions for many reasons, but in most cases it’s because an organization’s IT solutions aren’t serving business needs well enough.

Some people find new technologies and solutions that help them do their job faster and get better results. Others simply have their own set of software and services they feel comfortable working with.

Below, we list the most common reasons why people choose unapproved IT solutions over the standard software packages offered by their companies:

Approved software and services are (or seem to be) less effective than alternative products
Approved software is more complicated and uncomfortable to work with than alternative IT solutions
Approved software is incompatible with the employees’ mobile devices
Employees don’t know about or don’t understand the security risks posed by shadow IT

As you can see, usually the main problem is that corporate IT infrastructure operates at a much slower speed than the business and doesn’t always meet its needs. Plus, regular users often don’t know about the risks of shadow IT. So instead of turning to the corporate IT department for help and assistance, employees start using unapproved software and services to build their own functionalities.

But why is shadow IT so dangerous? Next, we focus on the main risks and threats of using unapproved software and cloud solutions.

Why is shadow IT so dangerous?

The presence of unknown and unapproved software within enterprise networks creates a lot of problems for IT departments. Here are the three most important reasons why shadow IT is so dangerous for your company:

Lack of security – Your IT team is unable to ensure the security of software that it doesn’t know exists within the corporate network.
Uncontrolled and unmanageable – With no knowledge that shadow IT products are present, IT can’t manage them effectively and run updates.
Potentially expensive – Many unapproved software and services duplicate the functionality of approved ones, meaning your company spends money inefficiently.

Now let’s take a closer look at the particular risks posed by shadow IT.

Security risks of shadow IT

There are three kinds of cybersecurity risks of using shadow IT:

  • Data loss
  • Unpatched vulnerabilities and errors
  • Compliance issues

Data loss  When unapproved software runs within the network, there’s always a risk of losing data that’s critical for the company. On the one hand, there’s a reasonable chance that there are no backups of these applications and that employees who use them haven’t thought about creating a proper recovery strategy. Thus, if something happens, important data may be lost and there will be little to no chance of restoring it.

On the other hand, software that’s uncontrolled by the IT department poses an increased risk of illegitimate access to data because the administrator has no control over who is accessing these applications. When using unapproved solutions, some employees may be able to see or modify data they aren’t supposed to have access to. As long as you don’t have full control over what’s going on within your network, all these possibilities exist.

Unpatched vulnerabilities and errors Software vendors constantly release new patches to resolve vulnerabilities and fix errors found in their products. Usually, it’s up to the company’s IT team to keep an eye on such updates and to apply them in a timely manner. But when it comes to shadow IT, administrators can’t keep all these products and devices up-to-date simply because they’re unaware of their existence.

Compliance issues Regulatory compliance is critical for many organizations. There are lots of standards that organizations have to comply with, from Software Asset Management (SAM) to the General Data Protection Regulation (GDPR). For regulated businesses, the use of shadow IT can lead to large fines for violating compliance requirements.

Business risks of shadow IT

Aside from critical cybersecurity risks, unmanaged and uncontrolled software poses serious business risks, including inefficiencies and financial risks.

Inefficiencies. Even though boosting efficiency is one of the reasons why many people start using shadow IT in the first place, chances are high that the result will be the complete opposite.

Every new technology needs to be checked and tested by the IT team before being implemented in the corporate infrastructure. This is necessary to ensure that new software works correctly and that there are no software and hardware conflicts or serious failures.

Financial risks. In many cases, shadow IT solutions duplicate the functionality of standard products approved by the IT department. As a result, the company wastes money.

But while posing obvious security and business risks, shadow IT may also be rather useful.

Possible benefits of shadow IT

There are several ways in which shadow IT may be beneficial for your company. First, new technologies implemented by employees may turn out to be more efficient than the standard solutions integrated into your corporate infrastructure.

People use unapproved software and applications because they have certain needs that the solutions offered by the corporate IT department don’t cover. And while posing serious security risks, these new products may also boost efficiency and productivity and give your company a competitive edge.

Your task is to find the right balance between implementing more efficient, innovative solutions and keeping your corporate network secure. But before bringing them out of the shadows, you need to figure out how to detect unapproved SaaS solutions and programs running within your corporate network.

How can you detect shadow IT?

Unapproved software may vary from desktop programs to cloud services, and therefore you may need to use different tools for detecting shadow IT. So how can you find out whether your employees do or don’t use something beyond your company’s standard software packages? Here are several methods that might be of help.

Monitor your network

By monitoring your network, you can learn what devices, both company-issued and personal, are in use within your corporate infrastructure. Check your network for new and unknown devices so that you can identify shadow IT faster.

You can also process log data from MDM and SIEMS products as well as your firewalls to monitor the use of cloud services and identify those that have not been approved by the IT team.

Keep an eye on the cloud

Since cloud services and applications represent a significant part of today’s shadow IT, you need to pay attention to this problem as well. Cloud Access Security Brokers (CASBs) may be helpful in detecting unapproved cloud services used by your employees. CASBs provide better visibility of shadow IT: they let you see what devices are connected to the network, who has access to sensitive information, and which of your employees store such information in the cloud.

Five ways to mitigate shadow IT risks

Now let’s take a look at how exactly you can deal with the problem of shadow IT in your company.

Build a smarter corporate policy

A well-thought-out corporate policy that addresses the most critical problems of your business is a must. For instance, establish effective and comprehensible guidelines around the use of personal devices and the use of third-party applications and cloud services. By doing so, you can prevent unauthorized access to the corporate network.

You can also restrict access to third-party applications altogether or make data exchange between internal applications and cloud products possible only with the IT department’s approval. This will help you minimize the risk of data leaks.

Use shadow IT discovery tools

Detecting unapproved applications may help you take necessary action in a timely manner and minimize possible consequences. Monitor your network to know what’s running and how resources are used and use special solutions to find out whether some of your employees are using unapproved SaaS applications and cloud solutions.

Educate your employees

Perhaps one of the most effective ways to mitigate shadow IT risks is to educate your employees about the true dangers of unapproved software. People often don’t even think about the possible consequences of their actions and don’t realize what the risks are. So by explaining the true reasons behind shadow IT prohibitions, you can lower the number of unsanctioned software installations significantly.

Give your employees the tools they need

Remember why people usually turn to shadow IT in the first place? In most cases, it’s because the standard corporate tools don’t allow them to work effectively or comfortably enough. So make space for open communication, learn what your employees really need, and do your best to meet those needs.

Monitor employee activity

User activity monitoring is an effective way to gather information about the software, applications, and web resources your employees work with. Based on this knowledge, you can understand why people in your company have started using unapproved IT solutions in the first place.

Ekran System is insider threat detection software aimed at both large and small companies. It provides you with full information about user activity, whether users are in-house employees, remote workers, or employees of a third-party vendor.

Ekran System records everything that happens on the user’s screen, including mouse movements, and couples these recordings with a wide range of additional metadata that allows for easy searching.

Conclusion

While shadow IT certainly is a security risk for every enterprise, it may also be viewed as a symptom of an inefficient IT strategy. By understanding the needs of your employees and providing them with more effective tools, you can both eliminate shadow IT and increase the productivity of your employees.

At the same time, you need to build a smart and thoughtful corporate policy around the use of personal devices and third-party applications and services. Network and user activity monitoring tools can help detect unapproved software and mitigate the risks posed by shadow IT.



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