The risks of Shadow IT: how to discover and eliminate hidden threats

What is Shadow IT?

Shadow IT refers to software, apps, or cloud services used by employees without the knowledge or approval of the IT Team. It often goes unnoticed because people download tools to solve a quick problem, such as project management apps or cloud storage solutions. But even seemingly harmless tools can cause real damage if they’re not properly managed.

The risks of Shadow IT 

Security threats 

The biggest danger posed by Shadow IT is security. When employees use unapproved software, the IT Team can’t monitor or control it, leaving the organization vulnerable to cyber attacks. Many of these tools are not configured with strong security features, meaning sensitive data can be exposed or stolen.

For instance, a team might use an unauthorized file-sharing app to send sensitive documents, bypassing the secure channels that are in place. Without IT’s oversight, these tools are left unpatched, increasing the risk of vulnerabilities.

Compliance risks

Another major issue is compliance. Many industries are heavily regulated, with strict rules about data management and privacy (think GDPR). When employees use unauthorized software, it’s almost impossible to ensure that the organization complies with these regulations, putting your business at risk of fines and legal trouble.

Operational inefficiency

Shadow IT can also disrupt workflows and create inefficiencies. When different departments use their own tools for the same tasks, it can lead to data silos and lack of collaboration, ultimately harming productivity. Imagine one team using one project management tool, while your other team uses another—there’s no shared access to information, which creates bottlenecks.

Financial waste 

Finally, there’s a cost issue. Shadow IT will lead to overspending on software that isn’t necessary. Employees may sign up for multiple licenses of similar tools, often with ongoing subscription costs. Without visibility into these purchases, organizations often find they’re wasting money on duplicated software and services.

How to discover Shadow IT

The first step in mitigating the risks of Shadow IT is identifying it. Here are a few practical ways to discover these hidden software and services in your organization:

1. Conduct a software audit: regular software audits are essential to get a clear picture of the apps and services being used across your organization. Use inventory management tools, like License Dashboard License Manager, to scan the network for unapproved tools
2. Monitor network traffic: keeping an eye on network traffic will reveal a lot about how to discover Shadow IT. If you notice data being sent to unknown or unauthorized cloud services, that’s a red flag. IT monitoring solutions can track and alert you to unusual activity, helping you uncover rogue software before it causes serious harm
3. Employee surveys and reporting: encourage employees to report any software they’re using that hasn’t been approved by IT. Often, people turn to Shadow IT because they feel the existing tools aren’t sufficient. By maintaining open communication, you will address their needs without compromising security

Identifying and mitigating the risks

Once you’ve discovered Shadow IT, the next step is managing and mitigating its risks. Here’s how:

Software asset management (SAM): SAM is your best tool for controlling Shadow IT. By implementing a centralized system for managing software assets, you’ll ensure that all tools used in the organization are approved, secure, and licensed. SAM helps you track software from purchase to disposal, ensuring you’re not using unapproved tools and aren’t overpaying for licenses

Strengthen IT policies: implement clear and enforceable IT policies around software procurement and usage. Make sure employees know how to request new software and ensure there’s an easy-to-use approval process. The more difficult it is for staff to get access to the tools they need, the more likely they are to bypass IT

Education and awareness: sometimes, employees don’t realize the risks of Shadow IT. Educate them on the potential security, compliance, and financial risks that unauthorized tools present. By making them part of the solution, you create a culture where Shadow IT is less likely to flourish

For a deeper dive into effectively managing the risks posed by Shadow IT, check out our blog on how to develop a foolproof risk mitigation strategy.

Managing Shadow IT with SAM

Ultimately, managing Shadow IT requires vigilance and the right tools. Software asset management provides visibility into software usage, while network monitoring solutions help discover hidden tools. Combining these strategies ensures your organization can identify and mitigate the risks posed by unauthorized software, keeping your organization safe from hidden threats.

By taking steps to discover and eliminate Shadow IT, you will reduce business risks and keep your software environment secure, compliant, and cost-effective.

Ready to take control of shadow IT?

Get in touch with our specialist to discover how our software asset management solutions will help you identify and eliminate hidden risks.