What is Shadow IT? And what are the risks and opportunities for small businesses?

By Ryan Klund - Business Development Associate


Shadow IT Defined:

Shadow IT refers to IT devices, software and technology outside the ownership or control of IT. Sometimes called stealth IT, fake IT or rogue IT – shadow IT is when an employee at an organization bypasses IT tools and systems to use outside technology to do their job.

According to recent Gartner studies, shadow IT is 30% to 40% of IT spending in large enterprises and some estimates go even higher.

Example of Shadow IT

An example of shadow IT in the workplace is, let’s say a marketing employee works at an organization with Microsoft tools but shares her files with a co-worker using Google Drive. It’s not to say that Google Drive isn’t able to adequately share the file – but the employee is using tools outside of the systems overseen by the IT department.

Why Employees Turn to Shadow IT?

One of factors that employees turn to shadow IT is efficiency. A 2012 RSA study reported that 35 percent of employees feel like they need to work around their company’s security policies just to get their job done. It has been a long time since 2012, and exact numbers are difficult to measure, but shadow IT is likely more prevalent now with the explosion of cloud-based tools and the cultural work-from-home changes in 2020.

The Risks of Shadow IT

There are inherent risks to organizations when employees use tools unknown to an IT department. Simply put, if an application isn’t known – there are no guarantees it’s safe or secure. Also, company data shared using shadow IT can be leaked, lost or stolen with little-to-no remediation options.  

Opportunities from Shadow IT

While there are certainly risks, if managed properly – employee use of shadow IT can create opportunities for an organization as well.  Disruption is happening in every vertical and the traditional IT department is not safe from changes. Rather than shy away completely from shadow IT, a company can encourage shallow use of new software and applications, in order to find the best solutions for the future.

Staying Ahead of Shadow IT

It may go without saying, but the best way to mitigate dangerous shadow IT, is by supporting and offering the most up-to-date and efficient software and tools to your employees. As technology advances, it becomes more difficult to stay ahead of the curve. Find an IT Consultant or IT Services Partner to engage with to ensure your company is providing the best tools for employee success.

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