Shadow IT: A hidden enemy or a business opportunity?

Shadow IT is a source of risk, but also much more than that – it is symptom that IT is not in sync with business needs. The problem of using non-corporate devices and technology should not be viewed solely from the perspective of potential data breaches or theft, but also as an opportunity to unleash innovation across the company.

Shadow IT: causes and risks

If employees are not provided with corporate services for faster and simpler work, they will implement them independently. For example, many employees use file-sharing tools such as Drobox, creating major security risks. According to Gartner, large companies spend between 30% and 40% of their technology budget on shadow IT.

Research shows that IT teams don’t have accurate insights into the services used in their companies. According to the State of SaaSOps survey, the number of SaaS applications on corporate networks is three times higher than IT’s estimates. This situation, called Shadow IT, poses several challenges including increased costs and potential data breaches.

Employees who are not educated about security risks can compromise confidential information by exposing it to malware and other cyber threats. Already tight IT budgets are further reduced by the cost of applications that are not necessary to use or can be replaced with more cost-effective alternatives. In addition, having different versions of software creates a lack of control and standardisation.

While eliminating risk is certainly a priority, shadow IT is also an opportunity to improve collaboration and transform the ways technology is requested and used across your organisation.

New perspective: Shadow IT has strategic value

When employees install a non-corporate app, they are sending an indirect message: “We are lacking the tools to solve our challenges and work better.” IT managers should listen to these messages and carefully weigh the benefits of the tools used against their potential risks. In order to minimise risk, shadow applications should be provided with a legal “IT citizenship”. Below are some of the key steps along the way:

• Visibility is the number 1 priority, and that means discovering and listing all applications on the corporate network.
• To improve visibility in an environment where many different applications, software and tools are used, automation is key.
• Once the administrative steps are defined and implemented, IT can focus on breaking down data silos. Unauthorised applications are not integrated with each other and do not exchange information. By integrating this information, companies can create a centralised database that enables faster access to relevant information. For example, an application used by marketing potentially generates data that can be used by the sales department. That said, integrating data from different shadow applications can be a challenge. Not only do you need to combine both structured and unstructured data, but also to have the right technologies and expertise for data transformation, as well as to ensure that integration is done in a controlled way, in line with regulatory requirements.

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Don’t forget data regulations

Strategic use of shadow IT is not the path to anarchy.. When it comes to data, companies should not neglect regulations such as the GDPR and the Personal Data Protection Act. In order to meet the requirements of these regulations, it is necessary to establish adequate data governance, which means setting various internal procedures, standards and policies about gathering, using and ensuring the integrity and security of organisational data.

Raising awareness about the importance of business data

Any technological initiative, including the transformation of shadow IT, must be focused primarily on business. And since business involves people, their preferences and need, employees should be motivated to educate themselves about the importance of data and security.  

Experience has taught that when it comes to data transformation, management support is one of the pillars of success. In order for company leaders to recognize the importance of effective data management, they need to present the risks and small victories achieved on the path to transformation. Other important goals on this journey are to eliminate internal friction and provide strategic, experienced leadership for implementing data governance. If you need support in any of these areas, our consultants are here to help.