What is shadow IT? | Risks and mitigation

What is shadow IT?

Shadow IT refers to the use of any application, device, or cloud service in an organisation without explicit approval from the IT department.

This usually happens when employees find more efficient tools in the market than the approved solutions. Rapid cloud adoption has facilitated the growth of shadow IT from the times when employees used to buy off-the-shelf software, to make it easier for them to signup with many cloud services at once based on their needs.

An example of shadow IT is an employee using a cloud storage application, such as Google Drive and Dropbox, to store official files when the organisation doesn’t approve its use.

You may think, how can using secured applications like Skype, Slack, Dropbox, and others turn into a threat? While shadow IT tools might help employees work more comfortably, they come with a raft of concerns around security and compliance management. Shadow IT applications, especially SaaS applications, extend the platform where confidential data can be stored and processed. This becomes a serious security threat when the security operations centre doesn’t know about it and leaves the application out of their monitoring radar.

Negative implications of shadow IT

Shadow IT adversely impacts your network when unapproved applications are introduced. A few of these negative impacts include:

1. Security risks due to reduced visibility: Organisations need to track the applications used in the network. According to Cisco’s research, 80% of end users install software not cleared by IT, and 83% of the IT staff admit to using unsanctioned software or services. This introduces newer security vulnerabilities into the network since these applications are not reviewed through the necessary security assessments.

Because the use of cloud apps grow as the organisation expands, managing shadow IT becomes even more critical.

What is shadow IT? | Risks and mitigation 1

1. Compliance management: Employees not aware of strict compliance regulations may introduce shadow IT applications into their workflow without proper research. When they use those applications to transfer confidential information, they are unknowingly exposing sensitive information to potential cyberattacks.

Organisations unaware of shadow IT use may incur hefty fines and face lawsuits that damage their brand reputation.

2. Increased costs: A Gartner study states that shadow IT contributes 30-40% of IT spending in large enterprises. Employees usually sign up with services that share a similar purpose with the approved applications. This can lead to unnecessary subscriptions costs if the software accomplishes a similar or overlapping purpose, and there is no process to track the software and licenses used in the network.

4 steps to manage shadow IT

The prevalence of shadow IT cannot be eliminated. But here are some steps that can be taken to monitor and control it:

1. Gain visibility into the network: Organisations can implement shadow IT discovery solutions to detect the presence of unapproved applications in the network. These solutions increase the visibility of the apps being used on your on-premises and cloud environments and will detect any risky cloud service and software installations.

Shadow IT discovery helps you make quick decisions on whether to allow or ban use of the application to avoid security mishaps. To further reduce the security risk, we recommend you combine shadow IT discovery with user and entity behaviour analytics to spot and block the malicious use of unapproved tools.

2. Streamline shadow IT management: Once you gain visibility into what applications are used in your organisation, the next step is to classify them as approved, sanctioned, or banned. An effective way to classify the applications is to use external threat feeds that provide information on malicious URLs and domains. Correlating external threat feed details with the shadow IT application list helps determine malicious apps that should be banned. You can also control the use of banned applications by enforcing policies using cloud access security broker tools that block traffic to banned applications.

3. Assess the current shadow IT risk levels: Next, analyse the usage trends, level of impact, and risk profiles. With the help of shadow IT discovery and management solutions, identify the users who often access unapproved applications, the top unapproved applications being used in your network, its bandwidth consumption, and more.

4. Take control: The final step is to take total control of the data transmitted from and to the endpoint devices. Gaining total visibility over the data stored in cloud apps allows you to identify if they contain any confidential data, and determine the owner of the file, location, and the access level of the information. Centralising access controls help you prevent data loss or breaches, ensuring productivity while providing security for your data in transit.

As organisations globally continue to encourage remote work, shadow IT is likely to remain prevalent. Implementing the guidance provided above can help you minimise the security risks, financial penalties, and the IT spending for software that accomplishes the same as the organisation’s approved software.

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