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Shadow IT and Its Impact on Your Organization

A recent report highlighted that 68% of the organizations analyzed had exposed shadow APIs.

Shadow IT, the unsanctioned use of technology within an organization, is more than just a buzzword—it's a critical challenge to effective cybersecurity. By definition, it refers to the array of technology—hardware, software, applications, and services—utilized within an organization without explicit approval from a centralized IT department. This could range from something as simple as an employee using a personal device for work to more complex scenarios such as subscribing to cloud services or downloading software without the IT department's knowledge or consent.

While this trend stems from a desire for convenience or efficiency, the resultant risks are far from benign. As employees circumvent IT protocols to access and use unauthorized software, apps, and services, they unknowingly expose their organizations to a host of potential threats. In this blog post, we will delve into the realities of Shadow IT, discussing the cybersecurity implications and how organizations can address this growing issue without hindering innovation or productivity.

The Sprawl of Shadow IT

One of the biggest challenges when it comes to Shadow IT is that, by its nature, the extent of the problem is hidden and continuously expanding. Most leaders underestimate the number of shadow IT applications being used in their organization. According to Gartner, in 2022, 41% of employees acquired, modified, or created technology outside of IT’s visibility. By 2027, this number is expected to increase by 75%. Yet, one study found that 53% of CIOs and IT Directors surveyed were unable to confirm exactly how many applications were running across the organization.

Once considered a niche issue, Shadow IT is no longer lurking in the peripheries—it has infiltrated the mainstream, becoming an integral part of our everyday work environments. The digital revolution, coupled with the recent shift towards remote work, has amplified its prevalence. Now, individual employees are creating, acquiring, and adapting technology for work. But why would employees choose to bypass the established IT protocols and take matters into their own hands? The primary driving forces behind the use of Shadow IT are efficiency and convenience. Often, employees find that approved tools don't meet their specific needs or are too cumbersome or slow. As a result, they seek out alternatives that can help them perform their tasks more effectively or conveniently.

Gartner Research VP Chris Mixter compares the Shadow IT to 10,000 flowers blooming. “And you can’t stop it. You can’t say to the employees, ‘Stop doing that,’ because you as security don’t even know what they’re doing.”

The rise of consumer-friendly, cloud-based services has made it easier than ever for employees to find and use these unauthorized tools. For instance, an employee might prefer to use Google Drive or Dropbox for file sharing instead of the company-approved software because they are familiar with the interface, or they might find it more user-friendly. Similarly, undocumented, non-tracked third-party application programming interfaces (APIs) have also become common, with a recent report highlighting that 68% of the organizations analyzed had exposed shadow APIs.

A Labyrinth of Security Risks 

Shadow IT, by its very nature, exists outside the boundaries of an organization's approved and monitored IT infrastructure. This means that the normal security measures and protocols set up by the IT department might not apply to the systems and software being used under the umbrella of Shadow IT. As a result, a wide range of security risks can emerge. Some are obvious, straightforward threats, while others are less apparent, but no less significant.

  1. Data Breaches: Without oversight from IT, users may unwittingly expose sensitive data. This could be due to weak security settings, use of non-secure networks, or simply because the software or app they're using doesn't have robust security measures in place.
  2. Non-compliance: Many industries have strict regulations about how data is managed and protected. The use of non-approved software can easily lead to non-compliance with these rules, which can result in hefty fines and a damaged reputation.
  3. Malware: Unvetted software and applications may not have the same level of security as approved tools, making them prime targets for malware. An infected system can then serve as a gateway for the malware to spread throughout the organization.
  4. Lack of Updates and Patch Management: IT departments usually manage software updates and patches to address security vulnerabilities. With Shadow IT, these updates may not be applied regularly, leaving systems exposed to known security risks for extended periods.
  5. Data Loss: If employees are storing data in non-approved cloud services or on their personal devices, that data could be lost if the service shuts down or if the device is lost or stolen. This data loss could be critical if the information is not backed up elsewhere.
  6. Unrelenting Sprawl: As more employees adopt Shadow IT solutions, the overall IT environment can become increasingly complex and hard to manage. This can make it difficult to identify and address security issues, especially since IT may not even be aware of all the systems in use.

Notably, Shadow IT has resulted in high-profile data breaches. In 2021, a research engineer used “basic exfiltration techniques” to steal valuable intellectual property from Coca-Cola, exploiting commercial cloud services – specifically, Google Drive, to steal valuable intellectual property. In a more recent case, Samsung employees were found using ChatGPT without IT authorization, which resulted in a data leak of confidential source code. This case serves as a poignant reminder of how the unauthorized use of common tools can lead to substantial losses for a company​.

Strategies for Mitigating Shadow IT Risks

While the risks associated with Shadow IT are significant, they are not insurmountable. There are several strategies that organizations can employ to mitigate these risks, and they go beyond simply implementing new tools.

  1. Comprehensive IT Policies: An effective strategy starts with creating comprehensive IT policies. These policies should clearly define what constitutes acceptable use of technology within the organization. They should cover the use of hardware, software, applications, and services, and clearly outline the processes for requesting and approving new technology. IT policies should also be regularly updated to keep pace with the rapidly evolving technological landscape.
  2. Employee Education: Education plays a crucial role in managing Shadow IT. Employees often resort to unauthorized technology because they are not aware of the risks, or they believe that the IT department's policies are unnecessary or overly restrictive. Regular training sessions can help to dispel these misconceptions and ensure that all employees understand the importance of adhering to IT policies.
  3. Promoting a Culture of Security: Building a security-conscious culture is a long-term strategy that can yield significant dividends. When security becomes a shared responsibility rather than just the domain of the IT department, employees are more likely to take proactive steps to protect the organization's data and IT infrastructure. This includes using approved tools, reporting suspicious activity, and following best practices for data security
  4. Regular Audits and Monitoring: Regular audits and monitoring can help to identify instances of Shadow IT and assess their potential risks. This allows the IT department to take timely action, such as removing unauthorized applications or closing unsecured network connections.

Evren: Shedding Light on the Shadow

While mitigation strategies can go a long way towards minimizing the risks of Shadow IT, the only way to truly weed out Shadow IT from your organization is to gain complete visibility into your IT infrastructure. This is where Evren comes in. As a fully centrally managed OS, Evren empowers admin and security teams to manage all users, devices, browsers, and application policies all from a single, browser-based interface​. This centralization ensures that only approved apps are used across the organization​. 

With real-time tracking and monitoring of the entire IT infrastructure through Log Management and Monitoring & Reporting features, IT can identify unauthorized technology use and take swift corrective action. Other features are URL Filtering to limit users' internet access to specific websites and prevent the download and use of unapproved software and tools​; Advanced User & Device Management for better enforcement of security policies and complete admin control over what apps are installed on which end devices; and more.

Shadow IT is a byproduct of technological evolution, and has now become rooted in organizational culture. With Evren, organizations have a powerful ally in tackling this challenge. 

If unsanctioned technology lurks in your organization, take the first step towards eliminating it with a detailed audit of the existing IT infrastructure. Our security experts will help you gain a clear understanding of your current assets and guide you through Evren’s capabilities that keep the problem of Shadow IT at bay. Contact us to get started.