Shadow IT is the term used to describe the use of unauthorized and unapproved technology within an organization. It can refer to everything from the use of unsanctioned cloud services to the installation of unauthorized software on corporate devices. While shadow IT can offer a number of benefits, it also poses a number of risks that must be managed carefully. In this comprehensive guide, we will explore what shadow IT is, why it exists, and how you can manage the risks it poses. 

What is Shadow IT? 

Shadow IT is the use of unauthorized software, hardware, or other systems and services within an organization. The corporate IT department typically has little or no control over these unauthorized systems and services, which may enter an organization in different ways. Common examples of shadow IT include using unapproved tools for accessing, storing, or sharing corporate data, as well as accessing approved tools in unauthorized ways.  

Two common methods of introducing shadow IT into an organization are through the use of personal accounts to access sanctioned corporate IT tools and the unauthorized use of unsanctioned tools. 

Why do people use shadow IT? 

There are several reasons why people may use shadow IT within an organization. Some of the most common drivers include frustration with existing IT infrastructure and tools, a desire for greater efficiency or convenience, or concerns about security.  

For example, employees may turn to shadow IT as a way of bypassing slow or unreliable corporate networks in order to access or share data more quickly. Similarly, they may use unauthorized tools to increase collaboration across teams, streamline workflows, or improve productivity. At the same time, some employees may turn to shadow IT as a way of circumventing security protocols that they perceive as overly restrictive or overly burdensome. 

In 2012, the RSA study revealed that around 35% of employees feel as though they need to circumnavigate their company’s security policies just to do their job.  

As a result, many organizations have started to implement user compliance programs to reduce the prevalence of shadow IT. However, these programs may also be met with resistance from employees who are frustrated by restrictive policies or desire greater autonomy and flexibility in their workflows.

What are the benefits of Shadow IT?

There are several potential benefits of using shadow IT within an organization: 

1.Increase in collaboration and productivity: By using shadow IT tools, employees may be able to more easily share information, access resources, and collaborate with each other. This can lead to increased efficiency and productivity across teams and departments. 

2. Reduced IT costs: Some shadow IT tools are free or low-cost alternatives to sanctioned corporate systems. For example, many employees use personal accounts or unauthorized tools to store and share files rather than relying on costly enterprise content management platforms. 

 3.Greater flexibility and autonomy: Some employees may turn to shadow IT as a way of having more control over their daily workflows. For example, they may prefer using personal devices or unsanctioned software in order to access data from home or while on the go.  

4.Streamlined workflows and greater efficiency: By using shadow IT tools, employees may be able to reduce the number of steps in their workflows and automate previously manual processes. For example, they may use software that automatically generates reports or alerts them to important changes in real-time. 

In addition, proponents of shadow IT may argue that these unauthorized systems and services can actually improve security by making it easier to identify potential gaps or vulnerabilities in organizational security protocols. 

What are the risks of shadow IT? 

While no one wants to stop employees from using the best tools of the trade to do their jobs, shadow IT can be detrimental to the security of an organization. Shadow IT can present multiple risks:

1. Data breaches: If sensitive data is stored or shared using unapproved tools, it can be exposed and stolen by unauthorized users. This increases the risk of data breaches and other cyber-attacks like phishing scams, which can have serious consequences for both companies and their customers. 

According to a 2019 Forbes Insights and IBM survey, nearly half of IT leaders feel that allowing employees to buy unapproved software makes it difficult to safeguard all company data. In fact, the survey goes on to say that over 20% of organizations have dealt with a cyber incident caused by shadow IT. 

2. Malicious activities: Some employees may adopt shadow IT in order to carry out malicious activities such as data theft, corporate espionage, and sabotage. This can lead to legal trouble for the organization, as well as financial losses and damage to its reputation. 

3. Inability to monitor and control: When employees use tools without approval or oversight from IT teams, those teams are unable to monitor or manage their activities. This limits the ability of IT departments to protect sensitive data and respond quickly to potential threats. 

4. Cyber-attacks: By adopting shadow IT tools and services, employees may inadvertently introduce dangerous vulnerabilities into their organizations’ networks. These can be exploited by cybercriminals and other malicious actors to gain access to sensitive data or launch denial-of-service (DoS) attacks against the organization. 

5. Compromised user privacy: Unapproved tools and services may not have adequate security or privacy safeguards, which can lead to unauthorized access to employee data. This can violate employee privacy rights and compromise sensitive information that is vital to the success of an organization. 

6. Increased compliance risks: As organizations adopt more and more tools and services, they may become less compliant with legal regulations like the GDPR, HIPAA, PCI DSS, and others. This can result in costly fines and other legal repercussions for companies that do not manage their information effectively.

These risks can have significant consequences for companies, including loss of customer trust and financial losses due to regulatory fines or penalties.  

IT Service Management (ITSM): What are your ways to fix the "Shadow IT" phenomenon?  

While it is not always possible to prevent employees from using unauthorized tools and services, organizations can take steps to minimize the risks associated with shadow IT. Some of these include:

  • Educating employees about the potential risks of unapproved tools, and reinforcing security best practices like strong password management. 
  • Monitoring network activity for suspicious or unauthorized activities, and investing in security solutions like firewalls and Intrusion Detection Systems (IDS). 
  • Implementing processes for detection and reporting, including regularly scanning networks for unauthorized tools and services. 
  • Creating clear guidelines and policies regarding the use of internal tools and external services, with appropriate approval procedures for any new tools or services. 
  • Creating incentives and rewards for employees who report unauthorized activities, and implementing strict consequences for those who engage in such activities without appropriate approval. 
  • Partnering with trusted vendors to identify and mitigate security risks associated with unapproved tools and services.

What is a shadow IT policy? 

A shadow IT policy is a set of guidelines and procedures that organizations use to manage the use of unauthorized or unapproved tools and services within their networks. Typically, this includes measures for detecting and reporting suspicious activity, as well as restrictions on which tools and services employees are allowed to use.  

Other key components may include incentives for employees who report incidents of shadow IT, as well as consequences for those who engage in such activities without appropriate approval. In order to be effective, a shadow IT policy should work in conjunction with other security measures, such as firewalls, Intrusion Detection Systems (IDS), and regular network scanning. 


Is “Shadow IT” responsible for more security problems than conventional corporate IT? 

There is no definitive answer to this question, as its causes and effects can vary significantly depending on the organization and its use of technology. Some experts suggest it may result in increased security risks due to the lack of oversight or monitoring that typically accompanies traditional corporate IT.  

However, other factors, such as employee behavior and network vulnerabilities, may also play a role in increasing security problems. Ultimately, the best way for organizations to manage the risks associated with shadow IT is through a combination of education, monitoring, and other security measures

What are the different aspects of shadow IT? 

Shadow IT refers to any appliances, software, or other purchases related to IT that the department doesn’t know about. Some examples of these are: 

  • Hardware: personal laptops, mobile phones, external hard drives 
  • Software: unauthorized programs or apps downloaded onto personal devices 
  • Other purchases: subscriptions to cloud services or other software-as-a-service tools that are not approved by the organization. 

What is the most prevalent form of shadow IT

There is no definitive answer to this question, as the use and prevalence of shadow IT can vary significantly depending on different organizations. However, Cloud services and other software-as-a-service tools are often cited as some of the most common types, as they offer employees easy and convenient access to a wide range of technologies while bypassing organizational policies and controls. 

How do I root out shadow IT and maximize SaaS investments?

 There is no one definitive approach to rooting out shadow IT and maximizing SaaS investments. However, some key steps that may help include taking a proactive approach to identifying and addressing potential security risks, partnering with trusted vendors or experts to explore tools and services, and educating employees on best practices for using technology within the organization.  

Additionally, it may be helpful to set clear policies and procedures around technology use, monitor network activity for suspicious behavior, and conduct regular assessments of SaaS investments to ensure that they are optimized for security and productivity. Ultimately, the key is to be proactive in addressing potential challenges related to shadow IT and maximizing the value of your SaaS investments.