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Shadow IT within organizations has grown tremendously in the last two years. A whopping 4 in 5 employees say they have used unapproved SaaS apps on the job. While this could be attributable to changes brought about by working from home, more than 1/3 of employees say the reason they "go stealth" is because they feel organizational security policies make it impossible to get work done.  

Unfortunately for those employees, shadow IT can lead to security breaches and compliance failures. This can result in crippling fines and regulatory penalties for the organization, as well as potentially devastating impacts on brand reputation, increased insurance premiums, and even outright refusal to pay claims related to unauthorized SaaS apps. This is in addition to the intangible costs: fragmented, decentralized data and lowered productivity; poor integrations and lost information; missed opportunities for effective and informed collaboration. Many enterprises are running blind when it comes to shadow IT; more than half fail to include it as part of their threat assessments.

The fact that employees choose to use shadow IT means that it is offering them some value. This might be project management software with more agility, editing software with grammar tips, or tools for real-time communication. To limit the presence of shadow IT and mitigate its risks requires identifying the "whys" behind it, understanding the needs it is filling, and finding ways to solve what's lacking in the current tech stack.

Unseen expenses and unexpected risks

When a team that has implemented unapproved apps encounters a problem with their third-party tech, they have little choice but to solve it themselves. Individual employees might be tech-savvy enough to troubleshoot these issues, but that means time spent not preforming their primary job functions. It also creates a potentially frustrating situation in which IT teams are blamed for issues caused by rogue software that was never under their control. Those IT teams are left scrambling, forced to solve problems with potentially invisible causes, leaving users frustrated and incorrectly blaming IT support.

If teams can't resolve issues with their shadow IT on their own, or if critical operations become impacted, organizational IT is forced to intervene. At that point, resolving the disruption and restoring secure operations becomes significantly more complicated. In the best-case scenario, this might mean hours spent rerouting and reconfiguring networks. The worst-case scenarios include replacing compromised core assets like servers and power systems, lengthy downtimes, and potentially very costly data losses.

The mere presence of shadow IT increases the risk of data loss. Lack of centralization can create the need for continuous migrations; apps may not have backups enabled, or employees may not know the recovery processes; when the employees who procured and deployed software depart, the knowledge to maintain it is often lost as well.

The high costs of downtime

Shadow IT doesn't always result in downtime, but it always increases the risk of it. And that threat is significantly bigger than organizations imagine: 67% of employees or teams have introduced unsanctioned tech to their orgs, and 40% use such software as part of their daily routines. Ultimately, nearly 1 in 2 cyberattacks are the result of shadow IT, and the costs to fix them now averages more than $4.2 million.

The actual number of unknown apps used in an organization is usually exponentially larger than the known ones. In fact, large orgs spend more than 40% of their IT budgets either fixing the problems these apps cause or paying for approved software licenses that nobody is using. The latter is a massive resource drain; enterprises spend an average of $2.78 million every year on software licenses for applications they don't even use.

Cutting off collaboration

Employee productivity and the ability to make data-driven decisions also take a hit due to the lost or fragmented data caused by shadow IT. When organizational IT teams don't know about an app's existence, they can't integrate its data into the centralized pool.

Knowledge workers switch apps more than 1,000 times a day, and spend about 30% of their time searching different software products and platforms for the information they need. Because shadow integrations generally fail to communicate with the organization's authorized apps as well as other unauthorized ones, their presence multiplies time spent on data entry as well as retrieval.

The need for better and faster collaboration is often what drives the introduction of Shadow IT, but the long-term result is often the opposite, with different teams using disparate tools that allow information to fall between the cracks. This means that cross-team collaborations can quickly become exercises in futility and frustration.  

A way out of the shadows

Eliminating rogue tech gives organizations a path to improving the accuracy of their auditing, modeling, and preparations for future risks.

There are a number of ways to root out shadow IT. Organizations can provide remote monitoring and endpoint protection software that gives IT teams real-time insight about unauthorized installations on company devices. Data loss protection (DLP) tools can also help spot (and stop) instances of sensitive data being moved into third-party storage.

Another essential part of eliminating stealth tech is educating employees. Ongoing training should focus on both the potential security risks of shadow IT and ways to use authorized software to greater effect. Shadow IT isn't a sign of a bad workforce; it's a sign of highly engaged employees working with insufficient tools or training.

Shadow IT can start in many ways, but the most direct route to solving it is through improving communication. This doesn't have to mean deploying a slew of new software, but it does mean paying more attention to the tools employees use to get their work done, understanding what's driving their choices, and providing solutions for those needs. It also means ensuring that systems and the data they hold can effectively communicate with other data and systems to maximize their value.

Zoho offers a suite of intelligent enterprise business software, including an award-winning CRM suite, the industry's only comprehensive analytics and BI platform, and a powerful low-code development ecosystem.