Shadow IT - Risks, Rewards, and How to Manage it - Part 01

Introduction

As digital transformation accelerates, many employees are using their own tools and applications to get work done. This practice, known as "Shadow IT", occurs when employees utilize unapproved software or devices to solve workplace challenges. While it can foster innovation and boost productivity, Shadow IT also presents risks, including a common pitfall: leaving test accounts or temporary access active after systems go live. These risks underscore the need for careful management by IT departments.

What is Shadow IT?

Shadow IT includes any technology employees use outside the company’s approved IT environment. Examples range from using unapproved cloud storage for file sharing to using unofficial project management tools. These tools are often adopted for their convenience, but they introduce security, compliance, and operational challenges that can be hard to manage. In a nutshell, Shadow IT refers to any IT-related activities happening inside the organization but outside the purview of the official department.

The Risks of Shadow IT

1. Data Security Risks: Unauthorized applications often lack the security protocols needed to protect sensitive company data. A significant yet overlooked risk is failing to remove test accounts after a system goes live. These accounts can become backdoors for unauthorized access, leaving the organization vulnerable to breaches.

2. Compliance Challenges: Many industries are bound by strict regulations, like GDPR or HIPAA. Shadow IT can lead to compliance violations if employees use unapproved software that doesn’t meet regulatory standards. Leaving test accounts or temporary access active further complicates compliance, as they often go unmonitored and unreviewed.

3. Operational Inefficiencies: When data is stored or shared across multiple, unapproved platforms, it creates data silos, making collaboration more difficult and leading to fragmented workflows.

4. Increased Costs: Shadow IT can also lead to duplicate expenses. If a department subscribes to an unauthorized tool, the organization may end up paying twice for similar services. Additionally, maintaining unused test accounts may result in hidden costs.

The Benefits of Shadow IT

Despite its risks, Shadow IT can have positives. When employees seek out tools independently, it often signals that current systems don’t fully meet their needs. Shadow IT can highlight productivity tools that may benefit the broader organization. Employees using tools they’re comfortable with can also experience boosts in productivity and creativity.

How to Manage Shadow IT Effectively

1. Encourage Open Communication: Foster an environment where employees feel comfortable

discussing their technology needs with IT. Understanding why employees turn to outside tools can help IT departments identify gaps in the existing systems.

2. Implement a Clear Policy: Define clear policies on the acceptable use of outside tools and outline the importance of removing temporary accounts after testing phases. This proactive approach can reduce vulnerabilities associated with test accounts.

3. Provide Secure Alternatives: Work with departments to provide secure, IT-approved alternatives that fulfill their requirements. This reduces the need for Shadow IT in the first place.

4. Regular Audits and Monitoring: Conducting routine audits helps identify unauthorized tools and lingering test accounts, allowing IT to assess and address risks proactively.

Conclusion

Shadow IT can be a double-edged sword, offering employees new ways to enhance productivity while exposing companies to significant security risks. By addressing common pitfalls, such as failing to deactivate test accounts after go-live, and managing Shadow IT effectively, organizations can turn a potential challenge into an opportunity for innovation and productivity.

Key Takeaways

ARC ONE provide visibility and control over shadow IT usage within organizations.

Partnering with ARC ONE enables a balanced approach to security and productivity.

ARC ONE offers expertise in implementing effective shadow IT control strategies.

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