What Is Shadow IT?

5 min. read

Shadow IT refers to situations where individuals in an organization use IT-related hardware, software, applications, or services without the knowledge or authorization of the IT teams responsible for these tools. Shadow IT has grown prevalent with the rise of cloud-based services. As users become more accustomed to downloading and using cloud-based apps and services to support their work, the organization’s shadow IT landscape broadens. This, however, presents serious risks, such as security gaps, compliance violations, data leaks, and application sprawl.

Shadow IT Explained

Shadow IT emerges as a consequence of the rapid evolution of technology and the increasing demand for user-friendly, efficient solutions to meet business needs. To support their work, employees within an organization independently download and deploy software as a service (SaaS) applications, cloud storage solutions, and collaboration tools not officially sanctioned or approved by the IT department.

Ease of access, coupled with the familiarity and convenience of consumer technologies, drives the adoption of unsanctioned IT resources. The desire for increased productivity encourages teams to bypass IT-approval processes. They may perceive the official channels as cumbersome, slow, or inadequate for fulfilling specific tasks or goals.

Shadow IT can be broken down into three major categories.

  • Cloud-based applications accessed directly from the corporate network
  • Cloud-based connected applications accessed with an OAuth token
  • Off-the-shelf (packaged) software

Each of these categories has its risks and associated benefits, and organizations must develop strategies to address security while still allowing employees to use the tools that make them the most productive.

Shadow IT and Security

The IT department loses visibility and control over data and resources when employees use unauthorized tools. Many shadow IT tools and services don’t adhere to the organization's security standards and can introduce vulnerabilities leading to data breaches, malware infections, or ransomware attacks. As employees store and share sensitive information using unsanctioned cloud services, the risk of data leakage increases due to weak access controls or insufficient encryption measures.

Shadow IT can also result in costly compliance violations of industry regulations. What’s more, in the event of a security breach or incident, the IT department's ability to respond and remediate issues is hampered due to the lack of knowledge about the existence and usage of unsanctioned tools.

Technically speaking, security risks in shadow IT arise due to the absence of proper security controls, monitoring, and management.

  • Shadow IT applications might not be regularly updated, leaving them exposed to known security vulnerabilities.
  • Unauthorized tools might lack strong authentication mechanisms, such as multifactor authentication, leading to a higher risk of unauthorized access to sensitive information.
  • The use of shadow IT may involve insecure data transmission methods, such as unencrypted connections, which can be intercepted by malicious actors to gain access to sensitive data.
  • Unauthorized tools often lack granular access controls, allowing users with varying privileges to access sensitive data without proper authorization.
  • Shadow IT applications and services may not provide adequate logging and monitoring capabilities, making it difficult to detect and investigate security incidents.
  • The integration of shadow IT tools with other systems via insecure APIs can expose the organization's data and infrastructure to additional risks.
  • Employees using shadow IT tools may not have the expertise to configure them securely, leading to misconfigurations that expose the organization to potential attacks.

Mitigating Shadow IT Risks

Organizations can address security issues associated with shadow IT while still permitting employees to use productivity-enhancing tools by adopting a balanced approach.

Increase Awareness and Communication

Educate employees about the potential risks of shadow IT and encourage them to share their needs and concerns with the IT department. Establish open communication channels to facilitate collaboration between IT and other departments.

Implement a Comprehensive It Policy

Develop a clear and comprehensive IT policy that outlines acceptable use of technologies, required approvals, and security protocols. Make sure employees understand the policy and the rationale behind it.

Embrace User-Friendly, Approved Solutions

Identify and adopt officially sanctioned tools that meet employees' needs while adhering to security and compliance requirements. Strive to provide user-friendly solutions that match or exceed the features and functionality of unsanctioned tools.

Regularly Audit and Monitor It Usage

Conduct periodic assessments of software, hardware, and cloud services in use across the organization to identify any instances of shadow IT. Implement monitoring systems to detect unauthorized access or usage of IT resources.

Offer Training and Support

Provide training and support for approved tools to ensure employees understand their benefits and can use them effectively. Encourage employees to seek assistance from the IT department if they encounter challenges or require additional tools.

Establish a Responsive Approval Process

Streamline the process for evaluating and approving new tools and technologies to minimize delays and ensure employees have access to the resources they need in a timely manner.

Leverage Security Solutions

Deploy security solutions such as cloud access security brokers (CASBs), which offer visibility and control over SaaS applications, helping IT departments to manage and secure their usage within the organization. Additionally, a data loss prevention (DLP) solution is essential for monitoring the usage of cloud services and protecting sensitive information.

By implementing these strategies, organizations can mitigate the risks of shadow IT while fostering a productive work environment that empowers employees with the tools they need to succeed.

Shadow IT FAQs

Network-accessed shadow IT applications refer to unauthorized tools and services that employees access through an organization's network, circumventing IT department oversight and established security protocols. These applications may include unsanctioned cloud storage, collaboration platforms, or software-as-a-service solutions.

The use of network-accessed shadow IT applications poses security risks via potential unpatched vulnerabilities, inadequate access controls, and insecure data transmission.

OAuth-enabled shadow IT applications are unsanctioned tools that leverage the OAuth protocol to gain access to users' accounts on other services, without the need to share credentials directly. The potential risks associated with these applications include unauthorized access to sensitive data, insecure API integrations, and scope creep due to excessive OAuth permissions.

To mitigate risks, organizations should establish secure OAuth implementation practices, including strict access control policies, periodic permission reviews, and employee education on OAuth-related risks.

A cloud access security broker (CASB) is a security solution that acts as an intermediary between an organization's on-premises infrastructure and cloud service providers. CASBs provide visibility and control over the usage of cloud-based applications and services, helping organizations enforce security policies, manage access, and protect sensitive data. Key features of CASBs include monitoring user activity, enforcing access controls, detecting and preventing data leakage, and ensuring compliance with regulations like GDPR.
Scope creep refers to the gradual expansion of a project or task's objectives, requirements, or features beyond its original goals, often leading to increased complexity, delays, and resource consumption. In the context of cloud security and GDPR, scope creep may occur when unauthorized applications gain excessive OAuth permissions, broadening their access to sensitive data or systems. This expansion can inadvertently expose the organization to security risks, non-compliance issues, and potential data breaches.
Application sprawl describes the uncontrolled proliferation of software applications within an organization, often resulting from the adoption of numerous tools to accomplish similar tasks. This phenomenon can lead to inefficiencies, increased costs, and security vulnerabilities. In the context of shadow IT, application sprawl occurs when employees independently adopt multiple unauthorized applications, creating a complex landscape that is difficult to manage, secure, and maintain in accordance with data protection regulations like GDPR.